For years, we’ve touted two major advantages that advanced tax automation delivers: greater tax compliance assurance and fewer manual processes (which, in turn, enables tax teams to expand their higher-value contributions). There’s another important aspect to consider- recruitment and retention of talent.
Tax groups with the latest tax automation solutions in place also realize recruiting and retention advantages that have growing increasingly valuable as the talent crunch demonstrates stronger staying power.
In an article examining “how America’s talent wars are reshaping business,” The Economist emphasizes that the workforce “has become bosses’ principal concern. Chief executives cite worker shortages as the greatest threat to their businesses in 2022, according to a recent survey by the Conference Board… On January 28th the [U.S. Labor] Department reported that companies had spent 4% more on wages and benefits in the fourth quarter, year on year, a rise not seen in 20 years.”
More recent labor data shows that U.S. companies added far more jobs in February than expected (678,000 jobs). The gains lowered the unemployment rate by a significant .02% while placing the country on track to regain all of the jobs that existed prior to the global pandemic.
While rising labor costs pose a risk to profit margins, companies have few other arrows in their quivers when it comes to competing to attract and retain increasingly scarce workers. Competition for tax professionals – people who tend to have degrees in accounting and other business disciplines – is especially fierce. In late January, one of the Big 4 firms announced a $160 million investment in pay increases for its 30,000-strong workforce. I don’t need to tell you that corporate tax groups are competing for those same (higher paid) workers.
Other factors are also constricting the supply of tax talent. Prior to the pandemic, the number of annual accounting graduates (at both the bachelor’s and master’s level) was trending downward, according to the AICPA. Competition from the high-tech sector – especially for tax and accounting professionals with technology expertise – has also intensified in recent years. The pandemic’s work-from-home shift has given companies able to satisfy remote-work preference an advantage over other hiring organizations. Demographic shifts, including Boomer-generation retirements, are also at play.
All of these talent management challenges make advanced tax automation more valuable from a recruiting and retention perspective. In-demand tax professionals are more likely to accept a role in which they spend less time on repetitive, transactional tasks and more time honing their strategic contributions. The opportunity to develop and sharpen skills and expertise related to current business systems and advanced tools also offers recruiting and retention benefits. The Economist article cites recent research from job market analytics firm Burning Glass showing that the share of job postings offering training this January was more than 30% higher than in January 2020.
Vertex has always advocated that tax groups need to have the best technology in place to handle complex compliance requirements and free up talented tax professionals to deliver more value to the rest of the organization. It turns out that advanced tax automation also gets talented tax professional into your organization and can help keep them there amid intensifying competition for their service.
Please remember that Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in Tax Matters are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.