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People Services: An Interesting Time

In our Q1 People Services update we discussed some of the interesting features of the Human Capital / People Services sector that have manifested themselves over the past 12 months. These included the increasing size of the ‘in-house’ population of employees in Employment Tax, Expatriate Tax and Global Mobility focused roles and the impact that Audit Rotation, MTD and Technology was having on the Advisory Sector’s workforce.

These trends have continued and look set to carry on in the same vein for some time. In-house hiring is still up across the board (with 60% of new mandates now in Group Tax rather than HR) and the type of hiring is still weighted towards Employment Tax vs Expatriate Taxes, a real reversal of the state of play 4/5 years ago. Technology has continued to impact the market and, indeed, the Reward or Global Mobility Technology practitioner is now one of the most in-demand skill sets across the Top tier advisory firms, whilst ‘core’ Expatriate Tax hiring continues to be relatively subdued.

However, it is also very interesting to see that People Services related issues are increasingly visible and ‘press worthy’. Whether this is via media coverage discussing Executive Pay revolt, the ‘Gig Economy’, or the permanent vs contractor status of some of the largest ‘disruptive’ technology service firms, HR and People Services issues appear to have moved from the business section to the front page. With the cost of casual work or ‘Gig Economy’ working practices estimated to cost HMRC £3.5- £4.0 billion per annum (or £2,000 per person per annum) it was unsurprising that the treasury sought to look at this working practice in the last budget.

In addition to the ‘HOW’ of employment status and pay of ‘employees’ there has also been a continuing focus on ‘WHERE’ those individuals are undertaking their work. This focus has been there for some time in relation to Short Term Business Visitors / Travelers (STBVs), however, the past 12 months have seen a continuing focus on this cross-border employee niche.

Whilst many companies have already established and understood policies regarding long term assignments (from both a policy and tax compliance perspective), STBVs appears to be a less ‘developed’ area; there is much scope for improved tracking, compliance and strategy. Mirroring this fact, we have noticed that STBV experience is increasingly important in both replacement and new ‘greenfield’ roles. Similarly, the rise of alternative service providers within this space perhaps highlights its increasing importance, also allowing People Services professionals with an interest in this area a new career path away from the traditional top tier accountancy path (where investment has also been made to develop specialist STBV focused teams and technology orientated solutions).

Of course, this rise in focus on ‘HOW’ and ‘WHERE’ workers are employed, paid and situated has also coincided with an increase in the visibility of HR as board level influencers (70% of CHROs now sit on Executive Committees or EXCOs) or, interestingly, as NEDs. CHROs within the FTSE 250 & FTSE 100 firms are increasingly HR specialists in their own right rather than professionals parachuted into the position from other disciplines (CFO or Sales etc.). They are also more than ever at the cutting edge of business, with influence over many People Services / Human Capital orientated niches like Executive Compensation, Regulation, Technology and Workforce Management.

Whilst Employment and Expatriate Taxes roles may indeed be continuing to move across within the in-house sector into Group Tax (from an immediate reporting purposes / situational perspective) the old argument over whether these are Tax or HR matters ensures that dotted lines into HR (Reward, Comp & Bens or HRD professionals) remain and, in turn, ensures that People Services issues are surely increasingly visible from an organisation’s perspective.

In essence, whilst mainstream or ‘core’ Expatriate Tax / Global Coordination roles may be fewer and farther between than a few years ago, the number and variety of career paths open to People Services professionals has never seemingly been greater, nor more core to an employer’s business, nor more visible … an interesting time.

If you are keen to know what options are open to you or indeed what compensation package you should command in your current People Services role, please contact one of our specialist tax consultants.