Upgrading to tax talent management 3.0

Businesses are increasingly recognizing that the right technologies can have a profoundly beneficial impact on the human dimension of tax operations. In KPMG’s 2024 CTO Outlook Study, 41% of the 300 tax leaders polled say they are using technology to free up their teams for strategic activities. That’s up sharply from 32% in 2023.

Software and algorithms can take over many “routine, transactional and time-consuming compliance, reporting and risk management workflows,” the study notes. When CTOs were asked what actions they have taken regarding the tax function workforce in the past two years, their most common response was “adopting new technologies or tax software to enhance efficiency and productivity” (38%). When respondents were asked to look ahead to the next three years, adopting new technologies again topped the list, alongside “implementing flexible work arrangements and remote work” and “redesigning job roles and responsibilities” (all at 41%).

In addition to tax technology strategies, the report looks at outsourcing, co-sourcing and managed services models for tax. A 2023 KPMG study found that one-quarter of companies plan to increase their use of these options. Here again, advanced technology is an important consideration – in fact, it is often the most important factor. The survey asked respondents what benefits they expected to see from shifting to a more comprehensive sourcing strategy with third-party providers. The top benefit: greater access to advanced technology (41%).

Digital disruption is changing the skills that tax professionals need to succeed, KPMG points out, and tax technologies can help them thrive in high-level roles with expanded strategic responsibilities. I would only add that advanced tax systems can themselves be an important factor in attracting and retaining the tech-savvy talent that tax departments are looking for.

For more on the current state of play in tax transformation, see my previous post.