July 2022

Maximising a career in tax and beyond

Contributed by Chris Nelson - Tenet Search Chairman

I’ve spent nearly 40 years in the tax industry, from working with Arthur Andersen in the early 80s as a tax consultant, to 35 years in the search industry – firstly with Michael Page and, from 1999 until 2019, with my own firm, Pure Search. The world of tax has changed dramatically during that time, as have the people, their approach to work, and its impact on business.

Here in the latest article commissioned by Tax Weekly, I speak with some of the ‘leading lights’ of the industry to find out what attracted them to tax in the first place, how it challenged them and fulfilled them in equal measures over their careers, and how and why they developed a career beyond tax.

Talking to Mat Mealey a senior international tax partner at Ernst & Young, he describes what a career in tax has meant to him. A feeling and enthusiasm shared by many others.

Mat says he ‘fell into tax’ after University… ‘But I landed on my feet. My career in tax has been constantly varied, I have done projects all over the world and I have had extraordinary access to the highest quality learning and development – in areas far beyond legal and technical training including leadership, communication, sales, relationship building, and business
strategy. It has been a great privilege and a fun journey and I would recommend it to anyone.’

It’s important to acknowledge that tax today is a big industry. HMRC estimates that there are 43,000 paid tax agent firms in the UK , ranging from sole traders to international corporations generating over £5bn of revenue. The common stereotype of tax professionals often belies the fact that a background in accountancy is increasingly the commercial driver of the boardroom, with qualified accountants now at the helm of one fifth of the UK’s FTSE 100 companies.

Working in tax is dynamic and fast paced, requiring not only analytical ability, but excellent problem solving and commercial skills. It requires a high level of attention to detail, good English and Maths skills, and the ability to communicate. Although many people assume that it is a ‘maths job’, most of the work is law-based.

This is evident when you investigate why people join the tax profession in the first place.

Many started lives studying to be chartered accountants (ACA) and found tax to be more interesting, intellectually challenging, and with clients more engaged and appreciative of the value-added nature of tax as opposed to audit. Others studied law at university and saw the attraction of a career in tax whilet studying revenue law. Big firms targeted law students to hire, finding they possessed the intellectual, commercial, and numerical ability to thrive in the profession.

A career in tax is immensely challenging and fulfilling for the following reasons.

•It is continually evolving and changing and is dynamic and fast-paced. Few industries move as fast as tax. Every time the law changes or there is a new budget, tax advisers need to expand their knowledge and adapt their strategies.

•Tax planning is strategic and international and offers the opportunity to work in high performing teams.

•It evaluates your communication skills as often the most complex concepts need to be explained in terms that the ‘layperson’ can understand and act upon for the benefit of a business.

•It allows you to be part of a business, often at the centre, advising on complex transactions and making judgements on ‘acceptable risk’ that a company should take in pursuing its commercial goals.

All of the above is perfected summarised by Sarah Cooke, Vice Presidenttaxation at OneWeb :

‘I would say that being in tax lets you see the whole business, from legal to finance to operations to procurement from the most junior person all the way up to the Board. You learn from a career in tax, the necessity to be collaborative and that effective business decisions involve bringing the right people together at an early stage. A career in tax is seldom boring and enables you to bring your different perspective to help businesses to make better business decisions.’ All that being said, tax can have its limitations – especially in a commercial business!

This partly revolves around the fact that tax is very niche to many people outside the field, and outsiders will often perceive you as a subject matter specialist only. In fact, it can run deeper than that, with a real risk in getting ‘pigeonholed’ in a smaller, niche area of tax, such as ‘transfer pricing’ or VAT. Although many enjoy this further specialisation, it does narrow the breadth of your future career options in a wider financial, operational, or commercial role.

Tax is undeniably narrow and deep, where the concentration and value-added tends to be below the line, predominantly, in managing earnings per share. As such, it’s harder to get to board level or top table where commercial, strategic, and top-line growth, gross margin and EBIT tend to dominate the agenda. So that’s the dilemma for many in tax. They enjoy the intellectual stimulus of the subject matter, the recognition of the value added, and greater financial rewards that often come from tax over and above a career in mainstream finance. However, there’s a barrier to leadership in a commercial environment. Tanya Richards Group Financial Controller at Sky was one who made the most of her career in Tax, before seeking out a broader Finance role and comments:

‘For me, tax was a great platform for my career – I focussed exclusively on tax until I had a number of years as a Head of Tax under my belt. But then the opportunity to extend my career came along and I decided to be brave and take on the challenge. Once I had successfully taken on Treasury, I could see how the skills I had developed through my tax career could be applied to many other areas, and I then proactively sought them out. I definitely have no regrets!’
In talking to Tanya and some of the other most successful people in tax who have made the move into broader finance, they suggest there are two critical times in your career where it’s optimal to make the move. Firstly, and perhaps most obviously, a move can come relatively early in your career. Soon after qualifying, many move into related areas such as:

•Financial Control or Commercial/Group Finance;
•Corporate Finance;
•Strategy or Consulting;
•Front Office structuring or Investment Management.

The second ‘well-trodden path’ is to wait much later into your career, when you’re established as a Head of Tax or experienced Partner in a firm. David Smith Group Head of Tax and Corporate Finance at Balfour Beatty is one such individual and comments:

‘The skills and experience I learnt from working in the world of tax have served me well in developing my career into a broader portfolio. The ability to think about and solve problems analytically and logically, and the skills to communicate complex issues, have plenty of wider applications’

Despite the perception that tax is ‘narrow’, the reality is that you develop a commercial overview, an eye for detail, analytical and critical thinking, and business partnering skills, all of which can be harnessed and put to valuable use in the wider financial and commercial sphere.

Typically, a Head of Tax or Partner will have gained the trust and respect of a particular organisation, which has witnessed some of these more generic skills listed above and may be willing to offer a wider role incremental to tax for the individual. In practice, especially for a Head of Tax, this involves taking responsibility for something in addition to tax. Typically, we’re talking about one or more of the following:

•trade compliance;
•M&A/corporate development;

In each of these areas, the technical leadership and ability to run teams are just as important and relevant as they are in tax.

Someone who has had a remarkable career inside and out of Tax isI an Brimicombe SVP Group Finance at Burberry . From a leading light in tax, Ian broadened his exposure to include treasury, insurance, pensions and corporate
development while at Astra Zeneca. At Burberry, he’s delivering across all Group Finance areas covering financial and management reporting, specialist finance and finance transformation projects. With typical modesty Ian says:

‘The opportunities to expand my role beyond tax was a great challenge and experience, leading to a fulfilling and extended career.’ Finally, let’s have a look at how tax is changing and what it may mean for the next generation of leaders in our Industry.

Some would say that it’s becoming more compliance and risk-management led, where systems, processes and technology will drive the agenda. This may appeal less to the intellectual who likes ‘puzzles’ and more traditional tax planning requiring ‘out-of-the-box’ thinking and solutions!

That said, with greater regulation and geopolitical tension, tax is moved further up the commercial agenda within a business and into the boardroom. While the tax structures and schemes of the past brought short term EPS benefits, they didn’t add sustainable value to the business.

Now, with the increasing risk of double taxation brought about by the vagaries of transfer pricing and elastic rules over permanent establishment, together with greater disclosure through country-by-country reporting, it’s crucial that your business footprint is taxed once only on the same profit. Dispute resolution and managing tax risk are key skills that the Head of Tax, combined with an ability to communicate potential outcomes effectively at Board and Audit Committee level. Environmental taxes and sustainability are also on the agenda of a modern-day Head of Tax.

So, while tax is becoming more data, systems and technology-based in response to digitalisation, it remains of interest to the boardroom as an increasing risk in the context of the geopolitical and social agenda changes. This makes tax for the next generation different but no less interesting and should facilitate broader careers and opportunities for those who are brave enough to grasp them. Don’t just take my word for it. Listen to what Paul Fox Group VP Tax, Customs & Insurance at Klockner Pentaplast has this to say:

‘If you want to take a broader path outside tax, you need to be bold and not afraid to try something different and off the beaten track. If you’re good and have experience, you can always go back to tax and have a very successful and rewarding career. But take that leap of faith and little bit of risk, as it won’t just come to you.’

Document downloaded on 09-08-2022 from Croner-i Navigate, the UK’s leading online research service for tax, audit and accounting professionals. Find out more at www.croneri.co.uk or call 0800 231 5199.

This article was correct at the date of publication. It is intended as an aid and cannot be expected to replace specific professional advice and judgment. No liability for errors or omissions will be accepted. It is the responsibility of those using the information to ensure it complies with the law at the time of use and that it is used in line with relevant rules and regulations governing the subject matter in question.

Except where otherwise indicated, all content is copyright of Croner-i Ltd. © Croner-i Ltd, 2022
All rights reserved. No part of this publication may be reproduced without prior permission

April 2022

Tax recruitment is booming

Contributed by Chris Nelson - Tenet Search Chairman

It’s hot, hot, hot!

Recruitment has reached a frenetic pace and, as we enter Q2 2020, shows no signs of letting up. Most commentators believe that the ‘war for talent’ has never been so fierce and that the market is at an all-time high. The tax recruitment market is no exception and is following the trend we see across other job markets in the UK and internationally.

There is no doubt that the pandemic and then the subsequent bounce back in economic growth, which started during the last quarter of 2020, has led to a dislocation in the recruitment market the like of which we have never seen before. This dislocation has taken on many forms to produce a perfect storm or utopia, depending on your point of view. What are the main contributing factors to this boom?

  • Economic collapse followed by a record bounce back in activity and growth.
  • The ‘quit rate’ is at an all-time high.
  • People are leaving our cities in record numbers.
  • Changing work patterns and flexible working are here to stay.

Let us look at the numbers that underpin these observations and go some way to explaining the unprecedented demand for talent.

The UK economy shrank by a record 9.9% in 2020. The contraction was more than twice as much as the previous largest annual fall on record according to the Office for National Statistics. Growth rebounded by 7.5% in 2021, which is another record.

Brits are quitting their jobs at the fastest rate in over decade latest studies show. In the US, where governments produce official data on what they like to call the ‘quit rate’; a record 4.5m (3.4%) people resigned in November 2021, by far the highest ever seen. The drift or is it a stampede away from our major cities has also added to the dislocation in the jobs market we see today. A recent survey by Hamptons showed that over 61,000 people living in London bought homes outside the capital city from January to June 2021. This has accelerated a trend which has seen 3.3m people move away from our cities since 2006. Hamptons’s recent survey highlighted that 44% of Brits feel the impact of coronavirus has made living in the city less appealing, while 24% of Brits no longer commute into the city to work.

The exponential increase in options, created by far less location-led restrictions for employers and employees, will continue to drive volatility. The biggest single reason for the unprecedented volatility in the jobs market is the desire for flexible working and a reboot of the work/life balance.

Lockdowns proved that people could work more flexibly and maintain productivity despite not going into the workplace. Managing one’s life and stress reduction due to not commuting were positive by- products of working from home.

PwC have been at the forefront of flexible working both pre- and post-pandemic. Their approach is explained by Donald McFarlane, Head of Tax Recruitment at PwC:

‘PwC’s strong candidate engagement, agility and speed during the recruitment process reflects the current candidate driven market in Tax. The world of work has changed and candidates appreciate our commitment to facilitating hybrid working. Our firm-wide Employee Value Proposition – ‘The Deal’ is built on two-way flexibility and trust, giving our people more freedom to work in a way that works better for them, but also meets the needs of their teams, the wider firm and our clients.’

The cutting of the cultural umbilical cord to one’s employer caused by months/years of working from home has also contributed to the record quit rate.

Candidates are reassessing their priorities and looking for an optimum work life balance.

Employers have been the most squeezed, particularly large employers with the historic brand value to dictate terms to employees. The leverage has shifted to employees, as start-ups are offering more flexibility and agility, and working from home as a result of COVID, for many people, has created lifestyle benefits they do not want to (and no longer must) give up. I suspect larger organizations will have to become more flexible and old-fashioned management/leadership will have to change over the next few years. As Wilf Cleave Founder of Tenet Search comments:

‘The race for top talent has never been fiercer and currently, candidates are most certainly in the driving seat. How long this will last, who knows. To be competitive in today’s market, companies must focus on strong candidate engagement at interview, run efficient hiring campaigns and offer financial packages that are based on what the role is worth, not just on the candidate’s current earnings. Agile working patterns are expected, and candidates look to join more diverse workforces and progressive organisations. People look at the overall offering from a company, which is more than just a competitive base salary and bonus’

Looking specifically at the tax recruitment market, the competition for talent is fierce for both in-house companies and the accounting profession. For both, acknowledging you are selling is the first hurdle and a prerequisite to successful hiring.

Professional service firms saw the quit rate hit record levels as we came out of lockdown and entered a new phase in early 2021. Since then, there has been a focus on retention with pay increases and promotions accelerating and previous ‘glass ceilings’ shattered in the stampede to reward existing employees. Marisa Williams, Head of Tax & Legal Talent Acquisition at KPMG UK, is someone right in the middle of this competitive market and comments:

‘The jobs market in tax is particularly competitive right now, so it is important that employers promote their value proposition to as wide a talent pool as possible.

‘For us, that’s about articulating the career pathways, opportunities, learning and development we can offer new starters and experienced hires to build an impactful and rewarding career.

‘Equally, the diversity of our workforce is one of our greatest strengths as a team and is incredibly valuable to our business. It brings fresh thinking and different perspectives, which are critical to delivering the best results for clients. This view will be shared by others across the industry which is why there is such an important focus on ensuring that the recruitment process and the candidate experience is inclusive.’

Hiring is non-stop at all levels, with the accent on streamlined and bespoke interview processes enabling candidates to determine their own ‘perfect job’ and working conditions.

For commercial enterprises, marketing the team and ensuring the right culture fit are paramount. Selling the breadth of work and opportunity together with the culture of the business are important steps in engaging candidates who have so many attractive options. In-house departments uniquely can develop candidates beyond the tax/technical, as subjects such as process automation and ‘enterprise employee engagement’ drive the broader agenda. Convincing candidates that they will gain from this broader business exposure, while maintaining technical expertise and managerial responsibility is always a delicate balance and key to attracting top talent.

Someone who knows the challenges of recruiting in today’s market is Mark Feldman, Group Head of Tax at Smiths Group:

‘With market and demographic traits changing, it is more important than ever to recognise the two-way dynamic of recruitment. Of course, from an employer’s perspective, it is as crucial as ever to get the right diverse talent for the role; now, in my view, it is as critical to ensure the candidate is comfortable, they are joining the right team for their career.

‘During the recruitment process at Smiths, we take time to really understand candidates’ motivations and career aspirations: team fit and culture, training and development opportunities, the importance of ESG, tax risk appetite and strategy are all areas that top Millennial and Gen Z candidates want to understand better before committing to a company.

‘I often now start interviews with candidates asking the questions, rather than the reverse. This allows me to differentiate Smiths’ tax team upfront – awards we have won, training programs we sponsor, as well as gaining an insight into what is important for the individual concerned.’

However, as we begin Q2 2022 with inflation at a 30-year high and war raging in Europe, a new landscape stretches out before us. Energy prices and inflation are set to be higher for much longer than predicted a year ago. Supply chains that were repairing after the disruption of COVID have been disrupted by the war in Ukraine. Against this background, an economic slowdown or global recession during the latter half of 2022 cannot be discounted. New challenges and questions face both employers and employees.

Will this bring an abrupt halt to the boom in the jobs market?

Should employers take stock now and concentrate on retention or press ahead recruiting in this fiercely competitive market with salaries rising by up to 20%?

Has the peak time passed for employees to seek new opportunities?

The recruitment market could seem quite different by Q3 2022.

Document downloaded on 26-04-2022 from Croner-i Navigate, the UK’s leading online research service for tax, audit and accounting professionals. Find out more at www.croneri.co.uk or call 0800 231 5199.

This article was correct at the date of publication. It is intended as an aid and cannot be expected to replace specific professional advice and judgment. No liability for errors or omissions will be accepted. It is the responsibility of those using the information to ensure it complies with the law at the time of use and that it is used in line with relevant rules and regulations governing the subject matter in question.

Except where otherwise indicated, all content is copyright of Croner-i Ltd.

© Croner-i Ltd, 2022

All rights reserved. No part of this publication may be reproduced without prior permission