Why in-house tax professionals change jobs every 3-5 yrs…

In the world of tax, professionals often harbor a deep-seated desire to transition to in-house roles. The allure is understandable: no timesheets, a better work-life balance, hands-on practical work, the opportunity to witness the entire lifecycle of a project, the ability to choose an industry of personal interest, depth over breadth, and the absence of business development responsibilities. The reasons why so many tax professionals aspire to move in-house are as plentiful as they are compelling. It has almost become a rite of passage to commence one’s career in professional services, acquire qualifications, and then transition to an in-house role upon reaching managerial ranks.

However, despite the appeal of in-house positions, a puzzling trend remains: why do tax professionals tend to switch jobs every 3-5 years?

A random sweep of LinkedIn profiles belonging to in-house tax professionals swiftly uncovers this pattern of job-hopping. While some of this behavior can no doubt be attributed to the restlessness often associated with Millennials and Gen Zers – compared to the longer tenures typically seen among Gen Xers and Baby Boomers – there is a prevailing push factor that us recruiters so frequently observe…

And what might this reason be, you ask? While I cannot speak definitively for every case, a common underlying factor emerges: progression—or rather, the lack thereof.

The uncertain journey toward career advancement

Despite its virtues, a notable flaw of working in industry is the uncertain journey toward career advancement. Not only is progression harder to attain, but it is also less transparent compared to the structured hierarchy prevalent in professional services. Consider the Big 4 firms, for instance. Here, one can join as a school-leaver or graduate and trace a defined route all the way up to equity partner. While politics and bureaucracy may occasionally rear their heads, progression here is generally more meritocratic and straightforward. Achieve certain milestones as a Tax Assistant Manager, and you’re likely to ascend to Manager in the next promotion cycle. Be successful in your business case as a Director, and you could earn a spot as Partner.

In professional services, recruitment and retention revolve around the notion that people are the most valuable asset. As you climb the ranks, revenue generation speaks volumes. If you bring in enough business, there’s a strong argument for your advancement. However, in the realm of industry, the driving force is the job itself. While exceptions exist, in-house roles tend to be more driven by business needs rather than individual aspirations. As a result, in-house progression so often hinges on the movements of those above you. Your chances of advancement might depend on whether your superior vacates their position, receives a promotion, or retires.

In-house progression can feel akin to a game of chance rather than a meritocracy. While hard work and meeting expectations are crucial, for in-house tax professionals, the road to advancement can often feel like a waiting game.

And thus, the cycle of job-hopping commences. The thirst for advancement paired with the absence of internal opportunities drives tax professionals to leverage that progression through external moves. This issue is particularly acute at senior levels, where a bottleneck forms, with too many candidates vying for too few roles (typically, director and ‘head of’ positions make up only 2-5% of all in-house vacancies).

Lessons to be learned

So there you have it, the crux of why in-house tax professionals seem to be in a perpetual state of motion. While this challenge is likely to persist, there are valuable lessons to be learned:

• Employers: While your hands might be tied in being able to offer promotions, are you doing everything you can to actively foster opportunities for your team to grow? Progression encompasses more than just changes in job titles and salary bumps. The field of tax offers numerous avenues for development.
• Employees: Before considering external opportunities, have you maximised your potential internally? Have you put your hand up to be involved in those additional projects, engaged with training opportunities, and demonstrated readiness for advancement?

Whether you’re an employer or an employee, if the answer to these questions is ‘no’, then there’s work to be done.

If you require guidance navigating these challenges, don’t hesitate to reach out to the Harvey John tax team.