Hunting for the Elusive Doers – the Skills Gap in the Tax Market

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There is a phrase that no one in recruitment wants to hear; that there is a ‘skills gap’ in the current market. Most accountancy firms and in-house tax teams know that there simply aren’t enough ‘doers’ out in the market – the ‘doers’ is a technical term that my colleague Alison Tait and I coined to explain the types of tax professionals who ‘do the work’ so who prepare the tax computations, or the first draft of a report, or do the research for a meeting which someone else then reviews.  To me a ‘doer’ is someone who is qualified – who knows what they are doing and who can do their job with minimal supervision – in accountancy speak they would be qualified seniors, tax accountants, assistant managers or junior managers.  In law firms it is anything from a newly qualified to someone who is c 4 years’ pqe.   These ‘doers’ have become an increasingly rare breed and there are several reasons for their scarceness.

I believe we are still to some degree feeling the impact of the last recession – which was generally accepted to have been from 2008 to 2013 and which I recently discovered is now called ‘The Great Recession’. When the recession hit - the Big 4 and Top 20 accountancy firms stopped taking on as many graduates and school leavers – as a result there has been only a very small trickle of newly qualifieds coming out these firms and on to the market in the last 10 years. Even though the firms have gradually been building up their graduate and school leaver recruitment again – they have done this very cautiously – again cutting numbers after the result of the Brexit vote in 2016 and holding them at low levels until they see the outcome. The majority of those they have taken on have yet to qualify. A practical example of this is that in ‘corporate tax’ ACA finalists class of 2018 at one of the Big 4 in Leeds there was only one finalist. Back in the early 2000’s there would have been at least 6 in the year in that office in corporate tax alone.  I suspect that they are representative of the market as a whole and that most offices haven’t returned to their pre recession figures for trainee tax folk.  Traditionally it is the Big 4 and the Top 20 who provide the newly qualified ATT’s, CTA’s and ACA’s  for both in-house tax teams firms and smaller accountancy firms (or as we used to describe ourselves ‘cannon fodder’).

Traditionally most tax practices also used to get around half of their tax staff from the Inland Revenue. At tax senior level it tended to be Tax Officers and ‘TOHG’s – Tax Officers Higher Grade’ who made the move to the other side of the fence. TOHG’s were particularly useful, they tended to have undertaken internal Inland Revenue exams and were used to running cases from start to finish. Unfortunately with the merger of the Inland Revenue and Customs the way in which the combined HMRC staff were trained changed and we began to see either clerical staff or Inspectors – neither of which could easily make the transition in to a tax compliance role.  However there is some light at the end of the tunnel as HMRC themselves have felt a skills shortage and there is now a new band of ‘Tax Officers’ coming through who have been put through AAT level 3 or level 4 by HMRC. The first newly qualified candidates  from HMRC have been coming on to the market across the last 2 years and have joined firms who  sponsor them for the next step of their professional exams whether that be ATT, ACCA, CTA, ICAS or ACA.

I also think there has been some impact on the smaller accountancy firms in particular from the mind-set of the ‘millennial’ accountancy trainee. Those of us who trained in accountancy in the 1980’s and 1990’s expected to serve an apprenticeship – in fact to give our pound of flesh working long hours on somewhat repetitive accounts and tax compliance work before being promoted to work on more advisory projects. Many graduate trainees are looking for roles with a consultancy focus, where they can have more responsibility at an earlier stage. They don’t understand why they should be tied to a desk – presenteeism seems daft to a generation which can run a business from their mobile phones.  There is therefore an expectations gap between what employers want and what new graduates expect.

I also think that the rise of computers and AI means that some of the more basic tax compliance functions traditionally performed by tax trainees are no longer done by them – such as loading dividends in to tax returns .As a result the larger firms are training their staff in a different way, getting them involved in technical research and business development at a much early stage in their contract – getting them to do process improvement on compliance rather then the compliance itself.

So what solutions are out there? How can we plug the gap? Well one part of the solution is the Government’s focus on apprenticeships and the Apprentice Levy. The Government recognises that there is a shortage of trained individuals and is aiming to upskill the population as such it has a target of 3 million new apprenticeships by 2020. All the major accountancy bodies are promoting apprenticeships and training providers have packages to run the apprenticeships for accountancy firms. It makes sense if you turnover more than £3 million to use your share of the apprenticeship levy to help fund your firm’s training contracts. For those turning over less than £3million you can do a ‘co-investment’ apprenticeship where you fund 10% of the training costs and the Government funds up to 90% (there is a nice summary at  https://www.icaew.com/learning-and-development/accountancy-trailblazer/apprenticeship-levy  and a great starting point for tax trainees is of course ATT https://www.att.org.uk/att-trailblazer-apprenticeship . For more detailed guidance at https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work).  However, there are a couple of practical things you need to bear in mind; firstly your trainee will then be covered by the apprentice laws which give them increased protection than a normal training contract. For example you can’t claw back from the trainee any fees for exams if they move firm on qualification, you also can’t let them go if they fail the exam at first attempt. In most cases you will also find that to qualify as an apprentice the trainee will have to take an extra paper or case study alongside the ordinary exams for the qualification and they will need to also complete a portfolio of evidence.  Plus the apprentice needs to spend 1 day a week out studying – now this can be done in part in block form to fit round the usual 2 week study courses – but it does need to be adhered to.  So one obvious thing you will need to do is go back to your training contracts and make sure that they are updated to fit the apprenticeship standards.

Another thing to consider rather than bringing in someone to train up from scratch is whether you can attract a candidate who already has the skill set and training that you require. One obvious thing to consider is how flexible you can be in terms of working hours – there is a large chunk of the UK accounting populace who need for a variety of reasons to work part time. Many are of the generation that are trapped between trying to raise families and also look after elderly parents. Some simply have a passion for something other than tax that means they want to work part-time to help support their extra curricular activity. The Big 4 have led the way by offering some of the first home working contracts – KPMG for example now take on some expatriate tax staff on a compressed 8 month contract. The idea being that you work 50 hour weeks during busy season and then have 4 months off. I’ve encouraged clients to consider job shares and whether roles can be done on a part time or part home working basis. I’ve seen some really imaginative solutions with candidates being offered contracts where they work 5 hours from work and 1 from home each day. I’m also seeing a big increase in ‘term time’ contracts to help fit around child care in the holidays, Offering flexibility will allow you to attract more experienced staff who are likely to remain loyal to your firm or business because you have enabled them to balance their home and work responsibilities. 

 Flexibility can also help you capture some of the elusive millennials who are often keen to work reduced hours to fit around other interests or to fit around world travel. Not every hire dreams of being a tax partner in an accountancy firm, lots of accountants want to do a good job but then be able to leave the stress of work at work when they go home.

Interestingly, I’ve also seen the first candidates coming back to the market because they have been homeworking but miss being in an office. These candidates are looking for some flexibility but miss the camaraderie of an office environment.

My personal ‘Bête Noir’ is the impossible job – where clients simply don’t appreciate how the tax market has moved – an example of this would be an in-house client looking for someone who is the mirror image of what they were when they moved into industry 10 years ago so searching for a Big 4 trained tax accountant with a corporate tax background and good degree, to work mainly on compliance and particularly VAT, in a role where there is no obvious scope for progression. Why would someone do that job when they are being wooed by every other Big 4, every Top 20 firm and every other in-house tax team? You can’t expect a bright graduate to want a role where there is no obvious opportunity to develop or get a promotion.  Even if they do take the role its likely they will only use it as a stepping stone to get a more senior in-house role.  Usually these impossible vacancies also come with an unrealistic salary banding!  As a recruiter I have to counsel the client that they would be better off offering flexible and part-time working and getting someone more experienced who isn’t looking for promotion but who wants an interesting role that fits around their family commitments.  I also have to give them the hard truth about salaries in today’s market.

I actually had an interesting conversation recently with someone who really thinks outside the box, they wondered if we could set up our own training house to develop newly qualified for practice and industry. If there are any venture capitalists out there give me a call!

Georgiana Head trained in Tax with Price Waterhouse before moving into recruitment in the late 1990’s. She runs Georgiana Head Recruitment Ltd a taxation recruitment business based in Leeds which specialises in the North of England. She is also a soft skills trainer and a Member of the ATT Members Steering Committee and Business Development Group.