IS THE TAX JOB MARKET BRIGHTER? ALLISON PLAGER FINDS OUT
How things have changed in the space of a few months. This time last year, jobs were at a premium, whether you were a tax expert or a window cleaner. Redundancies were the order of the day in many firms and industries, although often employers and employees alike were trying to streamline hours to avoid having to lay people off. At any rate, no one felt really secure.
Life does seem to be looking up however. The finance world, at least, is back on an upward spiral, although manufacturing is still struggling. The hope is that the UK’s economy will, having moved into positive figures at the end of 2009, continue to grow for 2010, albeit at a slow pace.
Likewise, while things are not perfect yet, the tax job market is definitely picking up and, as Georgiana Head of Georgiana Head Recruitment says, ‘while it is not back to the heady days of 2007, there are certainly more vacancies than in mid 2009, and an overall feeling of optimism’.
A year on
How does the current tax jobs market compare with this time last year? Are firms which had to lay off employees beginning to recruit again? Ed Colt, director at Hays Taxation, says that there are certainly ‘some signs of recovery since the start of the year and there is renewed confidence among employers and candidates. Businesses that have implemented recruitment freezes are now beginning to open their doors to new hires once again.
‘Six to 12 months ago if professionals were lost through natural attrition they were unlikely to be replaced; now, it is much more common for employers to start recruiting immediately for a replacement because they have leaner teams. Increasingly, we are seeing more candidates actively looking for new roles whereas previously the candidate pool was largely limited to professionals who had been made redundant or were looking to move from a contract to permanent role’.
Pat Keogh of Pro-Tax feels that one of the ‘key litmus tests for the market is recruitment for the big four and, this time last year, not one of them had more than ten live tax vacancies at any one time. In April 2010 one of the big four had 41 tax vacancies registered with us alone, so it is clear that recruitment is back on their agenda’.
Niche areas
While the tax recruitment market is showing signs of improving, not all areas of tax are the same. Indirect tax is one area where demand seemed to hold up during the recession, and is continuing to do so. As Mike Longman of Longman Tax Recruitment says, demand for ‘indirect tax specialists is strong – and in the case of VAT will presumably remain so if the threatened rise to a 20% rate or an increase in the scope of goods/services being made liable to VAT materialises’.
Ed Colt agrees that there is a call for specialists in VAT and also in expatriate tax. He suggests that one reason for this is that both areas ‘typically suffer from a shortage of strong candidates’. He adds that there is, however, ‘an increasing need within all types of firms for applicants with strong corporate tax and personal tax experience although employers can be very specific about recruiting professionals with relevant experience who are ATT qualified or a chartered tax adviser’.
Candidates who focus on personal tax should definitely not despair as their skills also seem to be in demand. According to Pat Keogh, ‘personal tax has been a key focus for many accountancy firms as the recent 50% tax bracket has increased individuals to call on their professional advisers more so than ever. One other key area of recruitment has been employee issues as employers seek to remunerate employees in a more tax-efficient way so specialists in share schemes and employee benefits trusts have been in high demand’.
Georgiana Head echoes the latter point saying that she also is ‘seeing an increase in demand for share scheme specialists’.
Firms are particularly keen to recruit individuals who have business development experience, that is, says Georgiana ‘people who can cover their own costs quickly’. This tends to benefit those at a more senior level, and indeed Pat Keogh says that ‘there has clearly been a shift recently for more senior hires in both practice and commerce. New hires though at the senior level have been more focused on bringing in new business as opposed to “farming” a client base and, similarly in commerce, senior hires have to demonstrate how they will save the business money through tax structuring or bringing the tax work in-house and avoiding the need for external tax advisers’.
He does, however, expect that junior and mid-level recruitment will accelerate ‘as 2010 progresses as the new senior hires bring in business and create a need for more junior members of staff’.
In the freezer
Last year, salaries remained more or less static across the board, even falling in some cases. ‘It was no secret’, says Pat Keogh, ‘that salary rises hit the brakes in 2008/09 and if you were lucky enough not to have had a pay reduction, a pay freeze was consider a good result!’
He feels that 2010 has turned a corner in this respect with ‘existing employees on average receiving pay increases in January of this year of between 8% and 14%. Candidates moving jobs can expect on average a pay rise of between 13% and 23% which is a marked improvement on 0% and 5% in 2009’. He adds that while it is likely to be some time before firms offer golden hellos, ‘there are some market-breaking packages being offered from FTSE 100 and big four accountancy firms’.
In the north, it seems that it may take longer for salaries to begin to rise. Georgiana Head notes that there was ‘a drop in real terms in salaries over the last 18 months; so newly qualified CTAs in corporate tax in early 2008 were getting salaries of £37,000 in the northern big four offices, while this year newly qualifieds can expect more like £32,000’.
In-house
The recession may have spurred some individuals to consider leaving professional firms and moving to an in-house position. This is another area that is improving this year and, says
Ed Colt, ‘has enjoyed an increase in job flow over the past few months’.
In particular, ‘transfer pricing candidates are sought after, while there is also a need for strong VAT candidates, especially those with financial services or international VAT experience’.
On the other hand, Pat Keogh says that ‘the accountancy and law firms were always going to lead the way with recruitment as they picked up the transactional work that has been created from commercial clients who were reacting to a better economy. There was a trend in the recession for commercial clients to reduce head count in the tax departments as transactions died away so when the market recovered they were under resourced and unable to deal with the tax issues, hence having to look to external advisers. As commercial clients have witnessed continued transactional work in the latter parts of 2009 and throughout 2010, they have come back to the tax recruitment market and we have seen a range of roles from mainstream M&A to more specialist transfer pricing vacancies’.
Georgiana Head agrees that this end of the market is picking up, but mentions that ‘in-house teams are being very cautious, taking longer to make decisions and extending their interview process’.
Sell yourself
The all-important question is how do you make an interviewer decide that it is you who is needed for the job. There is still a long way to go before it becomes a candidate’s market so, says Mike Longman, ‘candidates need to be realistic and understand that, while the market is in a better state than it was last year, it is still extremely competitive.
‘Candidates need to prepare thoroughly and research the potential employer, think in advance how to sell themselves and have thought through real-life situations to demonstrate that they have a track record in the key areas. They must also really go the extra mile in impressing the client with those important areas such as appearance, timeliness and showing enthusiasm for the role’.
Curriculum vitae preparation is always important, says Ed Colt. ‘Never lose sight of what potential employers are looking for: match your CV to their technical and personal competency requirements and you are off to a solid start. This means studying the job description and person specification carefully.’
As always, it is the well-qualified candidates who will have an advantage.
‘First time passes in professional exams are always pretty key in a recession,’ says Georgiana Head, ‘so I would really advise students to give the exams their all this year. For anyone who is currently out of work it helps if you have kept up your technical skills by voluntary work, study or reading.’
Reasons for optimism
The tax recruitment market is undoubtedly becoming more hopeful. Ed Colt feels that a ‘brighter picture’ is emerging and ‘some optimism has pervaded the market, with candidates considering their next move’.
Finally, perhaps the ultimate sign that the market is improving is that, as Pat Keogh wryly says, ‘tax recruiters are once again looking to recruit new people themselves, so this is indicative of the buoyant market’.
So, perhaps, albeit a mite cautiously, candidates can come out into the open and start seeing what they are able to offer potential employers. While the boom-time for candidates has not returned yet, the market is opening up and a feeling of hope is emerging.
