• 02 April 2020
  • Tax

Q1 2020: Market Insights for FS & Insurance Indirect Tax

Each quarter, our specialist Indirect Tax team monitors the number of in-house vacancies released onto the job market across Europe to provide you with a quarterly overview of recruiting trends. The data below provides a digestible snapshot to the in-house market from adverts posted directly from employers.*

#tax

What happened in Q1?

As suspected, the market improved considerably in January and February following the traditional downturn of activity surrounding Christmas. With many hiring managers issuing new budgets at the beginning of the year, it’s not surprising that 75% of Q1’s vacancies were advertised in January and February. 

However, as the world economy - and life as we know it - suffered dramatically from the global spread of COVID-19, the pace of the market began to change. The first half of March saw previously approved roles continue as normal, with 25% of all postings. However, the latter two weeks saw little outside of re-posts and vacancies advertised via external agencies.

If we take a deeper look into the verticals of the financial services world, it’s been the asset management and private equity sectors that have reported the most activity. As highlighted in our Global Indirect Tax & Tax Technology Report, much of the growth has been due to the rising value of 2019’s mergers and acquisitions, naturally leading to increasing workloads for internal tax teams. This momentum will likely be interrupted by a more cautious market due to COVID-19 fears, but we’re confident the demand for specialist indirect tax professionals will continue to rise once we move beyond current hiring freezes.

New Financial Services & Insurance Jobs (In-house)

Figure 1

London is still very much the epicentre of FS and insurance job activity, however, there were promising numbers seen across the BENELUX and DACH regions at the start of the calendar year. Of course, momentum dropped significantly due to mainland Europe being approx. two weeks in front of the UK’s Covid-19 timeline. There have been 36 roles posted across the UK&I, compared with 12 vacancies across the BENELUX and DACH region. 

What were the trends at each grade?

  • Leadership Grades11.1% of roles in the UK&I region were at this level, with an increase in vacancies across insurance and banking sectors. The BENELUX and DACH regions reported no vacancies at this level, although there were unadvertised appointments made.
  • Senior Manager - A double figure increase from the previous quarter at this level (19.4%). As with the leadership grade, senior managers are in fairly high demand across banking and insurance. Whilst many institutions do not have teams large enough to warrant the investment in these profiles, for many multinational businesses, this calibre of candidate is often brought in to spearhead complex projects. The BENELUX and DACH region saw a 8.3% share of senior management vacancies, which reads as a significant portion. 
  • Manager - Statistics don’t lie. For the fourth quarter in a row, the demand for managers has been the highest across all grades. Taking the lion's share of vacancies at 41.7%, businesses regularly compete over these converted candidates. This is largely due to the fact that a ‘manager’ broadly describes varying levels of seniority. One company's ‘manager’ can be another’s ‘head of tax’. However, 33.3% of vacancies were for managers in the BENELUX and DACH region. It’s also worth noting that indirect tax specialisms can often become streamlined at this grade; for example, there are VAT compliance managers, advisory managers, or those coordinating tax technology and transformation projects. This tends to increase the level of vacancies posted.
  • Assistant Manager16.7% of vacancies in the UK&I at the assistant manager level come from the investment banking, insurance, and private equity sectors. Demand at this level has been identical to the demand for managers in the BENELUX and DACH regions, at 33.3%. The majority of recruitment at this level has been in private equity and wealth & asset management.
  • Senior Analyst - There’s been a dramatic decrease in the demand for senior analysts in the UK&I, with only 2.8% of roles accredited to these individuals. Again, differing job titles may account for some of these roles but, with the popularity of outsourcing compliance and reporting, it’s unlikely to rise drastically any time soon. The BENELUX and DACH region is slightly different, as many of the larger companies have compliance tax teams across several countries, resulting in a 25% market share.
  • Analyst - Clearly, junior level appointments haven’t been on the minds of those hiring. Across all monitored jurisdictions, only the UK reported a figure of 8.3%. With European countries seemingly putting junior level hiring on pause, we’ve seen a rise in internships in the UK, particularly in insurance.

UK & Ireland | FS Indirect Tax Vacancies (in-house)

Figure 2

There’s more activity than expected outside of London, with the likes of Nottingham and Norwhich posting positions. Inevitably, London takes the top spot for the majority of recruitment but, looking ahead we’ll be keeping a close eye on how the rise of remote working impacts hiring across all levels.

BENELUX & DACH | FS Indirect Tax vacancies (in-house)

Figure 3

It’s clear that stability and experience are a high priority throughout the BENELUX and DACH regions. The previous incarnation of this report mentioned a rise in vacancies across these regions due to (dare we say it) Brexit. However, with this unofficially put on hold, it’ll be interesting to see whether previous predictions were accurate. 

Conclusion

It’s not all doom and gloom. We’ve seen strong recruitment activity throughout January and February and we can see that the demand for indirect tax professionals is still there, however we just expect a small delay in growth while we ride out hiring freezes. 

The repercussions of COVID-19 will unfortunately affect the in-house market harder than professional services. It’s hard to predict how much but investments, mergers and acquisitions will likely slow down from a year of tremendous growth. The reduction in investment will potentially have an effect on the need for extra indirect tax support. Insurers will also take a blow, particularly ones that specialise in hard hit industries such as aviation, sports, travel & tourism. However, insurance firms will be looking to save money when and where they can, so there’s hope for the cost-cutting role that indirect tax specialists play. Banking is an essential service under government instruction and although there are daily developments such as low equity mortgages and first time borrowing being put on hold, it’s an industry that’s very much seasoned to dealing with turbulent economies.

The in-house market isn’t completely at a stand still and, should you choose to move in-house, the sweet spots are at the assistant manager and manager level.  The likelihood is that professional services will see some growth due to increased outsourcing in times of uncertainty.

On a more optimistic note, we’ve seen from the financial crisis of 2008, that recruitment bounces back. Once the ship is steadied, we’re confident that we’ll be seeing a boom in recruitment to make up for the downturn we’re experiencing now. 

Please also read our Indirect Tax and Customs & Trade Compliance Insights.
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*Note - we omit the number of confidential mandates that HJ are assigned or job adverts posted by other recruitment firms. It should also be highlighted that many vacancies go unadvertised due to confidential or highly sensitive searches.

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Ed Moore is a Senior Consultant in the Tax Division at Harvey John.

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