A new resumé: how disruption will change the role of the tax professional
As disruptive trends increasingly place the tax function at the heart of C-suite decision-making, EY’s Jay Nibbe looks at how businesses will demand a far broader skillset from future tax professionals
“Wanted: strategic business advisor, diplomat, analyst and savvy technologist to work in… tax… but maybe for just for a short time?” While it may come as a surprise, these job specs will become increasingly familiar in the world of tax. Where once the skillset of a senior tax executive was centered predominantly on extensive knowledge of how to apply complex rules, disruptive forces including globalization and digitization mean that tax professionals are now undergoing a remarkable evolution in the skills necessary to be successful.
Every year at EY Young Tax Professional of the Year competition, we challenge budding tax talent from around the globe to tell us how they see the tax function of the future. Pioneering university tax programs are now striving to ensure that future tax professionals are equipped to deal with the challenges posed by real-time tax reporting advancements and new transparency requirements, driven by global initiatives such as the OECD’s Base Erosion and Profit Shifting (BEPS) project.
The war for tax talent has never been fiercer. While a strong technical orientation will remain important, the tax professional of the future will need to have a more rounded skill set, including the following key competencies.
1. An understanding of how to apply robotics, AI and automation
Tax function roles typically involve standard processes. Companies that invest in robotics, artificial intelligence (AI) and process automation will be able to make resource-heavy, repetitive tax work far simpler. This will allow companies to quickly dispense with the more mundane tasks that are carried out thousands of times a day. In turn, more challenging work should be the outcome.
Tax professionals will therefore need to develop new skills that require an understanding of how to apply new cutting-edge technologies, while recruiters will be seeking to headhunt individuals from non-traditional backgrounds. Indeed, we will see an increasing number of the next generation of tax professionals coming from science, technology, engineering and mathematics (STEM) disciplines. As the demand for a new wave of talent intensifies, businesses will need to realign the way they think about people displacement and how to deploy their human resource across the world.
2. The capacity to analyze data in real-time
Until recently, tax advisers relied on understanding the rules, and advising the business on the tax consequences in the jurisdictions where business was conducted. As the world has digitized and governments evolve toward an era in which tax collection will be automated to almost “real-time” assessment, companies are investing in technology to digitize their reporting processes.
The changes create real-time data, which businesses need to extract, analyze and validate to ensure the appropriate tax rules are applied to the information it generates. The emergence of the “tax technologist” who understands data analytics as well as the tax rules can support the development of real-time tax dashboards and visualization techniques, to offer game-changing opportunities for tax professionals and to add value in new ways. This is driving a wholesale shift in the competencies required by tax functions the world over, and ultimately will re-shape the talent dynamic across the whole profession.
3. The ability to be a C-suite influencer
Tax directors are increasingly becoming key players at the front-end of business strategy. With the international tax structure undergoing a fundamental overhaul in response to BEPS and other global tax initiatives, the tax department is being further drawn into a broader strategic business role.
Successful tax executives are developing closer relationships beyond finance, partnering more closely with operating business units while broadening their engagement across the C-suite. Increasingly, tax professionals must therefore collaborate with CEOs and CFOs in working through complex business decisions and risk management matrices. As disruptive trends continue to thrust tax professionals into key decision-making positions, they need to be strategic communicators and leaders who are capable of motivating a diverse team of resources in order to meet organizations’ wider business goals.
4. Adaptability as part of a more purposeful, contingent workforce
Companies are increasingly being challenged to leverage a more mobile, “on-demand” global workforce to deal with labour shifts and shortages. Sophisticated recruitment platforms now make it possible for organizations to employ “gig” workers on a temporary basis so they are agile enough to scale resources to demand and cater to a new generation of workers looking for greater flexibility. At the same time, these workers are seeking a higher sense of meaning and purpose in the work they do, and are willing to move to different companies more rapidly to broaden their experiences.
Tax functions will not only need to adapt to emerging gig workforce trends, but they will need to optimize recruitment processes to train, manage and nurture a workforce with a new set of employer expectations. Companies will also need to make provision for a new set of motivators, risks and challenges presented by short-term employees in an increasingly contingent talent pool.
Business-shapers of the future
With so many forces at play – from globalization to the arrival of BEPS – the tax function will continue to evolve toward a more automated business function led by a new generation of tech-savvy professionals. Many of the talent strategies that worked yesterday will no longer work tomorrow and the demand for a more flexible approach to talent management is far greater than before.
As a new breed of tax professional emerges in this digitized world, the tax function will continue to evolve, while its strategic decision-making position will remain as important as ever to an organizations’ success.