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It is undoubtedly true that the strategic importance of the tax function has significantly increased throughout the years, while the days of corporate tax being the only focus are long gone. In 2018 people services continued to be at the forefront, with people related issues regularly making front page news.
Major legislative change drowns the focus of organisations on how they deal with employment related risk, positioning the people services function at the centre of high-profile economic issues. This environment of change and increased complexity continues to shed light on the areas that fall underneath the people services umbrella, highlighting its multifaceted nature and importance to be positioned as a true strategic business partner.
Technology has continued to evolve and emerged as a key enabler of this position, aiming to improve governance, enhance cost reduction and facilitate informed decision making and time spent on strategy development.
In 2018 high profile economic topics such as the gig economy, apprenticeship levy and flexible remuneration cultivated a strong requirement for specialist advice, driving the demand in hiring. The Big 4 and the wider consulting market invested significantly in employment tax and reward functions, hiring across levels.
Driven by a skill shortage and a flexible working era, London remained the central hiring hub with the regions following suit.
The impact of the commoditisation of tax compliance, along with the digitalisation initiative from HMRC, was still evident in expatriate tax compliance roles, driving demand at low levels. Overall, demand across core global mobility/expatriate tax functions was often related to succession planning, portfolio management and employee turnover.
Technology and innovation
Technology remained at the forefront, with the Big 4 investing heavily in automation and data analytics in order to keep providing effective solutions in this new world of work, while compensating for the loss of other traditional service lines.
There was an increased appetite for talent which had been involved with technology and digital innovation, while the Big 4 continued investing in business travellers, global compensation and reward software.
With 1.3 million people in the UK estimated to be gig workers, the gig economy was another key topic that served a dual role – not only did it increase the demand for specialist advice on the topic (especially with organisations planning for 2020) but also shifted the market, not leaving the people services function untouched.
In a market where the need for a contingent workforce was not historically as evident as in other tax jurisdictions, 2018 saw such roles become more apparent. Research suggests that the gig economy is here to stay, predicting that 20% of the EU workforce will be gig workers by 2025.
The Big 4 have already started actively rolling out initiatives to engage with the flexible workforce, aiming to remain relevant and secure talent in a competitive market, but also operate effectively under a constantly changing external environment.
Employee value proposition
While operating in a market where the demand for talent is unequal to the supply, and with many professionals eager to pursue a career within industry – the competition for talent remained strong.
Based on research from the Corporate Leadership Council, a robust Employee Value Proposition, that goes beyond tangible reward, can improve the engagement of new hires by up to 29% and reinforce the prospect of employees acting as advocates from an average of 24% to 47%.
Within this environment, the focus on added value went beyond the earning potential to more intangible pull factors such as wider involvement, elimination of silos, flexible working, access to new initiatives and learning and development.
Following the reskilling era
Flexibility was also evident in the actual approach to hard skills, even for experienced hires, facilitating a move across the various people services functions.
Firms were less reluctant to engage with expatriate tax professionals for employment tax roles and provide the necessary support for the transition, while expatriate tax specialists actively perused these opportunities or a shift to more tax technology-heavy roles.
In a function historically operating in a standalone mode, talent acquisition needs within industry remained strong, with many roles being greenfield and others part of team development initiatives. Roles remained at the mid to senior level and hiring needs were evident across sectors.
One of the most active areas for new hires was financial services, due to both increased talent movement across roles and larger organisational structures. The majority of the roles retained their wide coverage, expanding across the entire people service tax umbrella, but with an employment tax bias.
Hiring managers focused equally on soft skills related to stakeholder engagement, change management and a balance between strategy development and operational excellence. This was driven by the need to manage risks but also capitalise on opportunities and prove the added value of the function, while the importance of solid technical foundations remained. In terms of structure, the majority of the roles were part of the group tax function, working closely with HR.
2019 will undoubtedly continue to be a year of change and the new world of work will continue to evolve. Despite these changes and the challenges, they have bought with them, people services has proven to be a resilient function, and 2019 is likely to be another busy year as its strategic importance continues to grow.