It’s been another quarter where much of the media attention and speculation has focused on inflation. This time with a spotlight firmly on pay rises and the prospect in the UK of the Bank of England raising interest rates. So what happened last quarter in indirect tax & customs recruitment?
While the ONS has cited record pay rises as a key driver behind inflation in the UK (and the ECB suggesting similar across the EU), our more microscopic gauge on pay pressures is that this trend is softening. Of course, the economy is facing immense challenges right now, and the topic of remuneration is still high on the agenda, but compared to earlier this year, the frequency is becoming more moderate, and much of this can be related to the downturn we are seeing in candidates and vacancies in the job market.
For many months, the indirect tax recruitment market has been riding a wave where jobs have been flowing, and candidates are being opportunistic. However, as we closed out the first half of 2023, it feels like we are entering a more cautious market. Employers are deliberating excessively on recruits, candidates are sticking tight, and we are subsequently seeing fewer of those outlandish offers being made. Last month, for instance, saw KPMG cut its US workforce by 5%, and while this might seem a distant trans-Atlantic issue, we know for certain that the Big 4 on this side of the Atlantic are watching this and reining in some of the ambitious recruitment plans stated earlier in the year.
Of course, regardless of this, the topic of remuneration was still at the forefront of the last quarter and remains an incredibly divisive one. While employers are being warned to curb pay rises to prevent the rising tide of inflation, employees are questioning whether the pay rises they’ve been seeing are adequate. We zoomed into the indirect tax and direct tax markets to explore this further in our 2023 Tax Salary guides, which you can access here.
The professional services market has become unfamiliar
Professional services has always been a candidate-driven market where those who have the skills hold all the cards. But last quarter, things started to change.
A quick read of the joint KPMG and REC report on the UK employment market highlights that continued uncertainty over the economic outlook has created more caution around hiring, resulting in a move towards temp recruitment over permanent. At the same time, and mirroring what we are seeing in tax, the report identifies how we are moving away from a candidate-driven market towards a vacancy-driven market. Of course, this will always have less of an impact on the indirect tax profession due to the systemic skills shortages, but we have, for the first time in a while, come away with the feeling that accountancy firms are being more picky and selective than they can afford to be.
The data from the last quarter would suggest a continued high demand for VAT advisory expertise across the professional services market, particularly at the early senior manager and manager level. However, while the jobs are there, the pace of recruitment has slowed, and hiring managers appear to only be moving for the candidates they can’t say no to. This contrasts with how we began the quarter, with both top-tier and mid-tier firms actively looking to hire and being opportunistic where possible. Equally, we saw a number of Partner and Associate Partner hires being made, which signals the investment into building indirect tax teams.
The downturn in recruitment across the Big 4 is expected to change come autumn, so we can only wait and see. Admittedly, given how fiercely busy this area of the market has been, certainly from a recruitment perspective, one cannot complain about the breathing space that has allowed us to focus on our in-house opportunities.
The state of the in-house indirect tax market
We saw a 9% increase in the number of in-house indirect tax jobs last quarter, and the lion’s share of this was in the UK&I (50%), followed by DACH (30%) and BENELUX (20%). In contrast, there has been a 5% decrease in customs & global trade roles, which appears to be a more cautious area of the in-house market – as you can see from our Monthly Job Tracker below.
In general, the breakdown across grades appears to mirror much of what we see in previous quarters, with the most active demands being for VAT analysts/accountants and managers, though the former has seen a small downturn while the latter has absorbed this deficit (see Figure 2).
We continue to receive a steady flow of compliance & process and advisory roles, but what has been noticeable was the increasing number of pure tax technology opportunities across both spaces of indirect tax and customs & global trade. Although this is a mixed bag of different technology-oriented roles, the prevailing theme of job descriptions continues to be S4 Hana followed by Alteryx, which more and more tax functions appear to be adopting. Much of this reflects the growing focus on transformation across tax and finance teams over the past and how more specific technology and data skills are required to tackle these projects.
Looking ahead
It certainly feels that businesses
are taking a more measured approach to hiring. And perhaps it is about time. It feels like we have been riding a wave of unprecedented hiring for quite some time now, so any drop in hiring levels was expected. Equally, it is also worth noting that while we may very well be at the start of a downturn, we have recently entered the summer holiday season, a time of the year when recruitment is seasonally much slower than we would like.
For more information on our latest tax job opportunities, you can find our live vacancies here.
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