Why Talent Management is Vital in Your Five-Year Tax Department Plan

What’s your tax department’s five-year plan?

To answer this question, EY polled 1,000 tax and finance executives around the world and then analyzed their responses to identify common mileposts on their tax roadmaps. While respondents work in large companies across 18 industries, most of the survey report’s findings and insights are also pertinent to tax groups in smaller and mid-sized companies. 

Before I get to those strategic roadmaps, here are the survey results that I find most interesting: 

• 96% of respondents report that they are transforming their tax operating model;
• 51% of leaders say they struggle with motivating talent and avoiding burnout;
• 63% say their tax professionals will need to augment their technical skills with new data, process and technology abilities during the coming three years; and 
• 48% identify the lack of a sustainable plan for data and technology as the largest barrier to achieving their vision of a modern tax (or finance) function.

It’s no surprise that talent management challenges figure as prominent roadblocks. My colleague, Vertex Chief Tax Officer Michael Bernard, recently described innovative approaches to address the CPA shortage, and I’ve written about the finance group’s new talent management gameplan. 

Nor is it surprising that EY leads with talent management when laying out actions that should be considered for inclusion in your next five-year tax transformation plans: 

• Treat tax talent management as a strategic priority: Rather than hiring, firing and upskilling in a reactive manner, EY advocates for a strategic view around talent: “The best-prepared businesses need to be able to attract, develop and retain people who know not only tax but also how to use technology to analyze data in a way that complies with the law and helps deliver insights to the full enterprise.”
• Design integrated technology roadmaps: While tax departments should design their own technology road maps, they should also consider working closely with other departments to develop a comprehensive technology strategy, according to EY: “A sound data and technology strategy allows for efficient reuse and will drive efficiencies by helping well-trained people develop predictive analytics. At the same time, achieving more automation also reduces pressure on people.”
• Deepen the tax group’s involvement in business change: EY encourages finance and tax leaders to “get into the room” where strategic decisions are made. This involvement enables tax leaders to address the tax implications of potential business model changes and strategic pivots. These interactions also “will better equip tax executives to be thought leaders and help apply their tax insights, including those derived using advanced analytical tools, to long-term business strategies and decisions,” according to the report. 

If you need help progressing on your own tax technology roadmap, Michael’s insights in this article are a great start.