The High Value Of Corporate Tax Executives

Having the opportunity to work with thousands of corporate tax executives over three decades has provided insightful information many people are unaware of in running a corporate tax function. There are three topics that will be discussed in this article that are important to know. A corporate tax executive may not have the opportunity to communicate this information to top management teams. However, it is important to know this information and what we are privately hearing from corporate tax executives.

Lead tax executives are under more pressure in running a corporate tax function than ever before in history. With multiple tax revenue authorities increasing their activity investigating corporations today to generate revenue, corporate tax organizations are experiencing an increase in audit activity from Federal, State, and Foreign tax revenue authorities. As a result, corporate tax executives have a heavier workload as they manage increased risk for corporate organizations. While many corporate executive teams are searching for ways to cut costs, the tax department needs an increase in its budget to support their growing workload. Note To CFOs and Human Resource EXecutives: Ask your Tax Executives what they need to be more successful for your organization? Then give them the financial support they need.

Over the previous two years, we have experienced the highest amount of turnover in corporate tax departments we have seen in decades. Allow me to share a truth with you most corporate executive teams are unaware of. The impetus of the great exodus and early retirements in the tax profession has a lot to do with the complexity of the tax executive workload. Tax work is a high risk job, demands substantial technical knowledge, has greater complexity nationally and internationally, and many tax organizations are working with understaffed tax teams with an increase in workload. Tax Executives will not tell you they do not know the answer to all your technical questions. However, they know how to find the answers from selected industry experts. Therefor, give them the budgets they need to access industry specialty experts. It is technically very complicated in the world of tax! A tax executives technical knowledge is as sophisticated as a pilot driving a jumbo jet! We are talking about a highly trained and educated group of tax professionals.

Another factor affecting corporate tax organizations today is the difficulty finding staff for their tax departments. In the year 2020, public accounting firms were not hiring staff level tax professionals. The staff who were fortunate enough to be hired were working from home with little mentorship available to them while working alone from home. The pandemic had a devastating effect on training in your children’s schools; it also had an impact on training tax staff. I have personally spoken with corporate tax executives who have looked for over a year for qualified tax staff. Many tax departments are hurting for tax staff support. My recommendation is for corporations to hire and train tax staff themselves as interns and rotate the staff among their tax team so tax staff receive more exposure to how a corporate tax department operates over multiple tax jurisdictions.

The Big Four are burning out their tax staff as many leave due to the stress of extraordinary overtime demands on them in these firms. Unfortunately, the experience has motivated many tax staff to leave the tax profession altogether at the three to five year level. This contributes to the lack of available trained tax staff talent for hire today. In the old days, you knew if a tax staff was trained by Arthur Andersen (who ceased operations August 31, 2002 from the Enron debacle), the tax staff went through a rigorous training program. Nowadays, you put tax staff on zoom call in front of a computer and hope they understand the highly technical concepts.

Another issue privately discussed with tax executives that corporate management teams are likely unaware is the increasing demand of technical expertise required by tax executives today. Tax legislation is changing rapidly across multiple tax jurisdictions. The changes are evolving at a pace impossible for any human to keep up with and take time to identify, assess, and select the best solution for the company. I would certainly not leave the solutions to A.I. as it would likely be favorable to tax revenue authorities. There are often several ways tax planning can be utilized so it is best to have the experience of a tax expert who also understands the issues and corporate business objectives. Give your competent tax executive the support and the budget they need to get the job done properly.

Companies need to understand that many organizations make mistakes which cause them to lose great tax talent. Tax Executives are very valuable to corporations today as they save companies enormous amounts of tax revenue that would otherwise be lost forever. One situation I often see is human resources making the mistake of thinking tax salaries and accounting, and finance salaries are in the same pay range. This is not the case as companies often find out when making offers to new tax executive hires. It is a very sensitive subject and best handled in the hands of a professional who has deep knowledge of the subject matter about tax compensation. Having placed more than one thousand tax executives over three decades and negotiated some of the largest tax executive compensation packages in the tax profession, I know how to help companies get the talent they need that will save companies millions (and sometimes billions in tax revenue over a ten-year period just on the way they structure their IP). Technically talented tax executives are one of the most valuable assets a company has these days. Treat your tax executives with the respect they deserve by supporting them with what they need.

Do you have a need for a tax executive currently or anticipate a need in the future? As an internationally proven expert in completing multiple tax executive searches for corporate clients, please be comfortable contacting me with your questions or needs:

Contact or call 858.999.0053 or text 858.232.4415. Available to speak with you 7 days a week. Call me if you have questions on tax compensation.

Contact me if you would like to participate in our year end 2023 private corporate tax compensation study.

CFOs Hiring A Lead Tax Executive: Real Truths You Need To Know

After thirty-three years, and more than one thousand tax executive searches, I have information of value to share with C Suite Executives responsible for hiring a lead tax executive for their corporate team. Those who pay attention to my tax executive search expertise will benefit greatly, I am happy to share my knowledge with you. This article is written for the C Suite team expecting to hire the very best in the tax profession. When you hire the very best, you gain more financial opportunities for your business organization. Hiring the best in the tax profession is one of the most meaningful hires you will make in your organization. This article will share real life stories of what happens behind the scenes when hiring lead tax executives. Look at our track record of tax executive search experiences as proof we know how to find the very best in the tax profession.

It is helpful to know that every executive search for a tax executive is different and unique. The success of a search is making a match of a good marriage including shared values, the level of respect the organization has for the tax function and leadership, melding of c suite executive personalities and company goals, and short term and long-term compensation package. There are myriad of issues that need to be carefully discussed upfront for a successful search. Placing a tax executive in a corporate organization who has access to a lot of private financial information is one we take seriously. You want to get the search done correctly the first time around and not cut corners anywhere because it can cost a company million (billions) in lost revenue to taxes. I have worked with tax executives who have clawed back billions in what would have been lost revenue to taxes in how they structured their IP and transfer strategies.

Background Tax Executive Search Lesson One
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STAY AWARE: Hiring Trends In Corporate Tax Departments Now And For The Future

About five years ago, when we surveyed thousands of executives on corporate tax departments trends, I recall one tax executive’s comment vividly… “ The Corporate Tax Department of the Future Will Be Very Different From The Tax Department Of Today.” This comment was emailed to me by a prescient corporate tax executive five years ago. This tax executive provided an insightful understanding of trends that were about to take place. The focus of this post is to discuss trends we now see that are happening behind the scenes in the tax community.

With thirty years’ experience being retained by corporate tax clients to find tax executives, I am highly qualified to discuss hiring trends well in advance of the market understanding the trends currently unfolding around them. The last prediction posted in my blogs a couple of years ago was easy in that I stated once tax professionals start working remotely, they would not want to go back to the office. In this post, I will bring to your attention where we see rising activity in hiring trends and the cost to corporations who do not understand the importance of the technology experts they employ.

Recently, I communicated to a senior management tax executive of a private equity firm my advice on the most important person they should have in-house on their acquisition team. Over the years, they have learned the importance of a strong in-house tax team who can assess the challenges they will face while conducting mergers and acquisitions. While in the past the focus has been on highly strategic tax planning, these teams are becoming ever more careful of the challenges they face in the integration of the software of two separate entities. In some cases, hundreds of millions of dollars of software purchases would not work to integrate two separate systems. This is a software trap many companies are walking into these days. It is messy and it is very expensive.
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Looking For A Tax Job? Advice Of An Internationally Recognized Tax Recruiter

While speaking to an accounting firm principal recently, he mentioned layoffs in the firms. What I shared privately surprised him. Last week, several clients called needing to hire more people in their tax organizations. Yes, we are in the middle of a pandemic and corporate tax departments are actively hiring. In the words of one Tax Director, “We are in more than one hundred countries globally and are already set up to work remotely from home any day of the week. We have a lot of experience working remotely so we are getting our work done.”

Another fact you may find interesting, I recently placed a tax executive and they start this coming week working from home. Working remote was not in the job description. The company wired up a computer and sent it to their home. Fortunately, there are corporate decision-makers who take action and get things done no matter what the circumstances. They know tax increases are coming and are hiring trained tax experts in their tax departments now. They know there is a shortage of available trained tax expertise given the current and certainly future demand.

What is happening in the tax job market right now?

1. Baby Boomer tax professional early retirements are increasing the availability of jobs.
2. Tax reform and tax technology requires tax professionals with a new set of tools.
3. Tax professionals with software technology expertise are thriving in this market.
4. The skills and knowledge required are changing for tax professionals every day.
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Kat Jennings, TaxConnections CEO

Over the years, I have called my biggest competitor in tax executive search on occasion. We are both well-known as two of the most experienced tax recruiters for multinational corporations, law firms and accounting firms (probably in the world). We recently discussed the years of experience we have in searching for tax executives for our multinational clients. Our competitiveness disappeared long ago into a mutual respect and admiration for each other with the challenges we faced working on tax executive searches that are some of the toughest encountered.

For the unknowing beginner, it takes years to build the skills required to represent multinational corporate clients. We understand search for tax executives involves a lot of very hard work. You do not just go into your files to find a candidate for a client. The work involves helping clients build a job description that attracts the right candidates, extensive research of tax candidates in the industry, thousands of emails, hundreds of phone, working nights and weekends; it is seven days a week. You need to know what you are talking about when you interview tax executives. They are highly educated and very strategic thinkers. The bottom line is it takes years to acquire the level of expertise a highly skilled tax executive search expert brings to company. It is truly the art of search for tax executives that you learn over many years to master.

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TaxConnections CEO Kat Jennings is hosting a rare conference call on Friday, May 11th 2018 at 1:00PM PDT/2:00PM MT/3:00PM CT/4:00PM EST specifically to teach tax professionals how to be more successful finding a tax job or consulting roles.

Want to stop wasting time submitting your resume to company portals? Want to know why companies never respond to your resume submissions? Want to know why there are more tax jobs out there today but people cannot find you? Want to learn the challenges hiring authorities encounter to find you? It is nearly impossible to succeed until you understand the barriers to success and how to break down the walls preventing you from getting to the decision-makers.

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Corporate Tax Hiring Trends With Tax Reform

For those of us who experienced the impact of the last major tax reform under President Ronald Reagan, I have a prescient message for you “ there will be a lot of new opportunity for tax professionals.” During the TRA 1986  there was a surge of hiring in corporate tax organizations as company executives scrambled to figure out the impact of tax reform legislation on their businesses. Behind  the scenes, we see companies already scrambling to get ahead of the changes about to appear with tax reform. The surge in new jobs and opportunities President Trump talks about is real and it is about to impact the corporate tax profession. The number of tax search experts at the top of our profession who were around at that time you can count on one hand and we all know what is about to happen with tax reform from our previous experiences. There are no computer bots ready to figure out the tax impact for companies as it takes pure human intelligence to research the impact on every tax organization.

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