Indirect Tax & Customs Market Report Q1 2022

As expected, we entered 2022 in a spectacularly busy form with the indirect tax market still very much on a high from last year’s recruitment resurgence.

In fact, this quarter has certainly been one of the stronger first quarters that we can remember.

It has, however, still been a turbulent start to the year. In a space of three months, businesses have had to navigate through the emergence of the Omicron variant, increasing rate of inflation, easing of COVID restrictions, resistance from workers to return to the office, the tragic events that are unfolding in Ukraine and, subsequently, the sanctions on Russia and Belarus.

In spite of this, however, the market has remained buoyant and opportunities continue to flood job boards, though we should note that they gradually have been slowing since January – perhaps a result of the Russian invasion of Ukraine.

Zooming in on recruitment, it’s been a great quarter for candidates and word has got out that the market is extremely buoyant, leading more tax professionals to reassess their market value. But, what is one person’s gain is another person’s loss. As candidates celebrate the market conditions, hiring managers are trying to navigate through an increasingly complex and volatile socio-politico-economic landscape with delayed recruitment processes, a largely remote workforce, and also a period of ‘the great resignation.’

Where have we seen the highest demand?

Although we have seen a huge surge in in-house hiring – and perhaps one of the most bullish first-quarter records we’ve seen – it’s been hiring across professional services that have taken the headlines.

Across professional services, the Harvey John team has seen an increase of 73% in VAT vacancies and 141% in customs duty and global trade vacancies since last quarter.

The extent of competition over the last 6 months has seen the emergence of more firms across Europe who are out-paying the Big 4 in the battle for candidates and really pulling out the stops to win the battle of attraction.

As the Assistant Manager to Manager grade remains at the centre of indirect tax and customs recruitment demands, we’ve been surprised by some of the salaries our candidates have been offered. At the same time, this remains a growing pain point for smaller practices that do not have as deep pockets but still urgently require support at this level.

One of the solutions undertaken by firms to capture the attention of candidates is the reworking of the ‘Assistant Manager’ title. With tax professionals increasingly conscious of their career development, there’s resistance to joining a firm that uses a more undesirable job title for the traditional Assistant Manager grade. BDO UK, for instance, has been the most recent and notable example of this, as they scrap the ‘Senior’ title in Tax & Audit in place of ‘Assistant Manager’. This came into effect on March 28.

How is the in-house market looking?

A fierce professional services market overshadowed in-house hiring, though that’s certainly no reflection of the activity we’ve seen.

In total, there were 208 new jobs across the UK&I, BENELUX, and DACH. While this was a 7.6% decline in roles from last quarter, it’s still a high figure in comparison to what we’ve seen over the years. If you’re interested to see how far the indirect tax market has come, then take a look at our Q1 2019 market report (that’s right, the pre-COVID days!) where we reported just 69 new in-house indirect tax vacancies, plus a further 22 in Financial Services (91 in total).

We saw the familiar spread of roles fall across the grades, with Analyst (30.8%) , Senior Analyst (19.7%), and Manager (33.7%) level hiring still dominating job boards.

In the UK&I, however, we did see a rise in the number of roles pitched at the Senior Manager to Director level (comprising 20.4% of its activity). While senior recruitment is still light across traditional hotspots like Belgium, Netherlands, Germany, and Switzerland, the UK and Ireland are proving themselves to be the new hubs of leadership roles (if the last six months is anything to go by).

Technology companies led the way by hiring indirect tax professionals, comprising 19.7% of the market. This was followed by Financial Services (12%) who have remained buoyant in the last six months and also Manufacturing (12%). Other notable industries were Energy, Pharmaceuticals, Retail, and Food & Beverages.

A spotlight on Customs & Global Trade

The figures above do not include specific customs & trade hires, though we will begin monitoring these numbers in April to bring a more targeted analysis of this market.

With that said, a notable demand within the professional services space has been off the back of firms looking to either bolster their customs & trade practices or backfill positions of exiting employees. Although still a small demographic of the broader indirect tax population, this has become a contested battleground and Harvey John have heard on the grapevine of a couple of high-level senior movements that are underway, which will no doubt have a ripple effect on support teams.

The aforementioned 141% increase in customs mandates at Harvey John is no surprise when you look at the increasingly volatile politico-economic landscape. Navigating through post-Brexit trade agreements has been a key issue this quarter and featured in the ‘must haves’ in many job descriptions of live roles. Our contacts have told us how aligning proof of origins for EU-UK trade has been a real challenge and then, more specifically, the indirect aftershocks that have left businesses desperately reevaluating transnational compliance and internal governance.

On top of this, we then have hyper-inflation with the devaluation of the EUR and USD and, most notably, the sanctions on Russia and Belarus which have trumped all pre-existing challenges!

The life of customs specialists is continuing to become more challenging and, as a result, we expect hiring to increase in this space.

Moving into Q2

Although seemingly a byproduct of a turbulent political and economic climate, the indirect tax and customs market in Q1 has been one of the most active that we can remember. However, as noted, while this has been an opportunistic time for candidates (particularly those at the Assistant Manager to Manager grade), it’s been a troubling period that many hiring managers are looking forward to putting behind them.

The market is, however, appearing to be on the decline. As January boasted 90 in-house jobs, it fell in February to 63 and again in March to 55 vacancies. One can only suspect that the continued uncertainty around the global economy and hyper-inflation is underpinning this.

The reduced competition will bring some welcome breathing space for hiring managers who are craving less competition in the market, but it’s a calling to candidates to take advantage of the market while it’s in your favour.

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Alex Mann is a Director at Harvey John

For expert advice on how to get the best out of your tax career, whether in a professional services firm or in-house, contact us today.