After thirty years consulting to tax executives of multinationals, I have been fortunate to witness trends emerging behind the scenes long before corporate tax professionals ever see them. Stunning new trends will take corporate tax organizations by surprise in 2015 and beyond. Having built many trusted relationships consulting with tax executives over three decades, my goal is to protect tax professionals now and in the future from these trends with an awareness of what is happening behind the scenes and how to position yourselves in an ever changing market. These days, I find myself in an interesting position having founded two organizations focused on helping tax professionals make better connections with the people searching to find them. Corporate tax professionals I know well, having placed thousands of tax experts over a span of thirty years into corporate tax departments. This article will take you behind the scenes of trends quietly unfolding for corporate tax departments today.
A couple of years ago, I started noticing an increase in the number of HR Departments contacting our search services division http://www.etsearch.com/clients.htm (now www.taxconnections.com) about what tax experience they could get for levels of compensation bands. As companies planned on their tax executives retiring, human resources and corporate management teams were having discussions about replacements being made with much less experienced tax management. Representatives of companies were asking questions about technical qualifications they could acquire at a much lower cost. I thought to myself at the time that these companies were rather short-sighted on how they could save tax dollars with the right leaders and tax strategies in place. In my opinion, there are two types of companies, the ones that pay attention to their tax organization and the ones that do not place high value on their tax organization. The great corporate tax management teams are easy to spot as they have staffed the best tax teams in the market. With the focus now on reducing costs and not on the most experienced in the technical area of corporate taxation, companies are certain to lose millions without the best tax experts they need to survive the tax increases inevitably coming our way.
Another trend unfolding behind the scenes is the number of companies calling with searches that are below the market on compensation. The HR Representatives call with the job descriptions and provide newly issued compensation level for their bands. When I advise the HR Representatives that the compensation they are offering is less than the going market for tax expertise… the struggle begins. HR goes back to management and delivers the news on tax compensation but the companies management increasingly refuses to budge. The result is the company finds themselves wasting time searching for a technically qualified tax professionals for their organization at below market cost. It is not unusual to see a company spend six months to a year searching for a lead or management level tax executive that will fit into their compensation structure and not the reality of the market. It could have been done in less than 90 days if they listened to the market. What is happening is that companies are now hiring less experienced people to fit into the hiring bands they have created simply to cut hiring costs.
Another trend unfolding is the company who is laying off entire executive teams of CEO, CFO, Controller and VP Tax. Although I will not mention the companies that occurred this past month, there are many more executive management teams about to implode this year and next. Why is this happening? There is a great article from Bain & Company http://www.bain.com/publications/articles/streamlining-spans-and-layers.aspx that talks about “Spans and Layers”. You should read this and grasp the implications as it is now being implemented all around corporate organizations. It is about how companies are managing the increased costs of running a business these days. Spans and Layers is about cost cutting, organizational effectiveness, decision effectiveness, holistic organization simplification, and eliminating the fat and waste of management, as they say. This trend is quietly occurring in companies worldwide as Management and HR sharpen their pencils to save money. However, you now have advanced warning this is for real and quietly happening behind the scenes!
Another trend unfolding is the number of companies contacting us to discuss their addition of contract workers. The large consulting firms have already put the word out they are ramping up their part-timers. This is very telling as they must be planning on reducing their overhead costs as well given the increases associated with healthcare and overtime pay. These are real conversations occurring today across all management levels in consulting organizations. Positioning your tax reputation and career for outside consulting projects is a smart move for every tax professional. My prediction is that consulting firms will do very well in a market like the one that is now emerging.
One of the reasons I built TaxConnections was to provide an insurance policy for tax professionals who walked in to work one day only to realize the company they work for has changed management and the new boss in town is cutting costs across the board. Corporate tax professionals are especially vulnerable and they need to protect themselves with a backup plan. Over the years, I have had conversations with thousands of corporate tax professionals who were caught with layoffs by surprise without an income and young kids at home, in school or college. I was able to help many but I could not help everybody until we built www.taxconnections.com.
If you listen to any words of wisdom I have shared with you today, I strongly urge you to protect yourself by building a strong online individual tax identity for your tax career. Invest $.84 (CENTS) a day in building your authority and visibility online in a way that gives you a backup plan, an insurance plan that builds your brand and a clear competitive advantage. You see, corporate tax professionals are unseen tax experts hidden in closed tax communities; hidden on sites that force people to pay fees to send a message; they are hard to find because they work behind the veil of a corporate tax department. Until one day, a new boss arrives and everything changes for the corporate tax professional and they search for help and better connections. We spent the last four years building a platform we know is now helping tax professionals all over the world make better connections! Now is the time for corporate tax professionals to take action and build a visible and accessible online tax identity in TaxConnections Worldwide Directory of Tax Professionals.
Take Control of Your Online Tax Identity And Watch What Happens: https://www.taxconnections.com/membership/tax-professionals
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