Recruiting and Retaining Corporate Tax Professionals
Hiring specialists discuss changes in how the business works-and in the candidates themselves

print this article

In some ways, the recruitment and retention of corporate tax professionals is the same as it has always been: finding the best candidates for the job and devising ways to keep them at the company. But things have also changed fairly dramatically in recent years. Applicants’ expectations are evolving, job responsibilities are changing, and the competition for top candidates is even stiffer.

No one is more aware of what’s changing and what isn’t in the corporate tax area than the recruiters and recruiting companies themselves. Not surprisingly, they agree on some points and disagree on others.

Tony Santiago is president of the Family of Tax Brands, a privately held group of companies dedicated to recruiting, retaining, and developing the talent of corporate tax professionals for over three decades. “I believe the biggest change in the last ten years is that now tax has a more prominent place at the corporate table,” Santiago says. “Tax is valued much more now by the executive leadership of most companies, and that is a catch-22. Not long ago, tax professionals were hidden underneath the accounting, finance, and treasury functions. Now, there is high demand for tax executives who can effectively communicate on the issues that represent the broader business scale. Also in high demand are tax professionals that can align with the strategic initiatives of the organization.”

Today, top tax professionals need to be able to partner with the cross-functional groups of the organization like treasury, corporate development, and accounting, Santiago notes. “So, the primary skill set demand by our clients are more well-rounded individuals who are not just experts from a technical perspective but are also capable of operating at the C-level at the time of placement or within a future timeframe,” he points out. “The aftermath of Sarbanes-Oxley created significant changes and got everybody’s attention. The pendulum swung aggressively towards risk mitigation staffing and departmental initiatives that were focused on protecting shareholder value. We are now seeing a shift back to a focus on creating shareholder value. This has become evident by the tax positions that we are being asked to fill.”

“I believe the biggest change in the last ten years is that now tax has a more prominent place at the corporate table.” —Tony Santiago

“Obviously,” he explains, “some of the issues from the NGOs and OECD, BEPS, and international tax reform are also impacting the shift in tax strategy focus. Tax professionals are going to have to be developed in a more holistic way much earlier in their careers and with a more balanced approach to the tax technical side. We are making significant strides to facilitate this process in our career development offerings within our TaxTalent community, for example. We are helping tax professionals at all phases of their careers develop the important soft skills that will allow them to interact with other C-level decision-makers.”

John Jung, vice president of tax search at the tax division of Govig & Associates, heads a team of recruiters who specialize in building in-house tax teams from the ground up. He disagrees with Santiago on one point: “Tax professionals want to have a seat at the table, but if I put all of my companies in one of two buckets, the bigger bucket is where tax is not valued. It is a cost center still. It is not looked at as a profit center. That’s why a lot of tax people are looking to go to companies where tax does have a seat at the table. It has risen in its importance, the visibility is much better, but I still think there is a struggle to prove that it is a profit center. It’s funny—when I talk to tax professionals, whether it’s a two-year staff or a twenty-five-year VP of tax, this desire consistently comes across.”

Technical Expertise

Kat “Kitty” Jennings, CEO, owner, and founder of Tax Connections, has been conducting tax searches since 1986. She says that recruiting in the tax space has changed in some important ways in the last decade. Companies demand more technical expertise in complex multijurisdictional tax organizations; and human resources is often unaware of the real cost for this top talent, according to Jennings.

Companies that expect their tax executives to cover multiple locations, time zones, and tax deadlines need to be educated upfront on compensation for tax executives before they ever start a search, she notes. “In the old days, companies would tell me what they are willing to pay, and today I need to tell them what it costs to get the talent they need. Honestly, my biggest challenge is educating human resources. ‘This is what it will cost to get the person who will save your company millions annually in lost tax revenue.’ Hiring authorities always want the best they can get, and it is my job to help the organizations craft creative compensation packages for these new hires, as there is always a way to do so.”

One of the trends Jennings sees is in the five- to ten-year tax professional range. “Now we’re working in the range of millennials, and they’re not responding like previous generations, and so you wonder, why is this happening?” The Big Four firms have been outsourcing compliance work to their India firms since 2008, she notes. “Some of the Big Four firms have compliance centers in India with more than 1,000 people, and they are massive,” she says, adding, “I am conducting a study on what they pay these folks in India to complete the tax compliance projects. It is a very interesting tax compensation project I am working on at this very moment. I know that the Big Four will quote the corporate tax leaders a flat price annually for the tax compliance project; I know that some corporate clients with compliance and processing teams of more than fifty people in India are paying the top person (living there) the equivalent of US $120,000, and I also know a U.S. company who has five compliance/processing people in Bangalore, and they are paying a total of US $40,000 for all five of them annually. This is interesting research I do for my clients alongside our executive search services and staffing. You will not get this information unless you are in the trenches talking to people who trust you with this information.”

Retention: Turnover Up?

In these changing times, is turnover up for corporate tax professionals? Turnover has increased sharply in the last several years, Jung notes, and not just at the lower levels. “There’s more turnover at the highest levels today. Tenure is not nearly as long as it once was back when our parents were working. Tax professionals today are trying to figure out the new normal,” he explains.
Santiago’s take on the retention/turnover issue includes both a demographic and a business model perspective. “The demographics in tax are impacting the profession tremendously. A five- to eight-year tax professional is difficult to find because there are simply less of them. The reason for this is that we have been dependent on the public accounting firms to train the majority of talent in tax, as Kitty pointed out. I estimate that about eighty percent of tax professionals in corporate in-house come from either public or law firm backgrounds. Professional services train them, and we take them out,” Santiago explains.

“There’s more turnover at the highest levels today. Tenure is not nearly as long as it once was back when our parents were working. Tax professionals today are trying to figure out the new normal.” —John Jung

“The problem with that model is—and there is no other profession that has this dependency like we do in tax—is that you have many more people going into the Procter & Gamble financing and accounting programs directly out of school,” he points out. “Not all professions depend on professional services to train its talent, but tax does. If you go back five or eight years, you started to see the public accounting firms—because of the recession in 2008—stop hiring and even pull candidate offers off the table. We create these artificial bubbles because of our dependency on professional service firms,” he explains.

Ways to Increase Retention

Concerning the issues of tenure and retaining tax professionals longer, Santiago thinks there are ways to increase retention, but the onus falls on tax departments and tax leaders to make that happen.

Retention begins in the hiring process, according to Jennings. “You must ask the right questions during the interview process to determine what the possibility of retaining this candidate will be for a very long time. One of the questions you should ask when you’re interviewing for your tax organization would be focused on culture. I would advise every candidate to ask the same question of everyone in the tax interview process about culture, because you may get the same answer from everyone or you may get ten different answers from ten different people during the interview process. While you’re going through and talking to half a dozen people in the company, I’d like you to ask every single person you interview with the same question—because I want you to understand exactly what it is that you are going to be walking into within this culture. Ask them each, “What is it like? What is it like to work here on a daily basis? What’s the culture like?” It’s that candidate’s responsibility to find out and ask each and every person what it’s like to work in that culture and if you will get the same answer from everyone. With six different answers, they should have a really good idea that the team sees and experiences the tax organization differently. If they’re walking into a culture where they work many weekends, they need to know. When people are working together and they are in sync, you get a lot more collaboration in the tax organization. If people are nose-to-the-grindstone in their cubicle, not talking to anyone, there may be some lack of communication from one group to another. So it is really up to that particular tax professional to communicate, to be able to extract that information during the interview process, and for the team to be able to communicate what that culture is like to the person coming in. Both parties need to know. They’ll make a much better contribution to the organization if there is much more transparency on both sides.”

If your current employees want to become directors, Jung says, provide them with the training. But retention often comes down to the boss, he says. “I hear people who leave say, ‘I’m working for this person, and I don’t enjoy it.’ They are going to go to work for somebody they respect, that they feel hears them and will listen to what their needs are.”

Here’s Jung’s take on technical training: “You can train anybody anything. You can’t train heart, passion, and desire. If I was looking at a director and trying to show them how to get this person on board, I would tell them to make that person feel heard, find out what’s important to them, not just once, but continually, because we all change.”

Developing Talent

Corporate vice presidents and directors who do a really great job take the time to sit down with their teams individually and discuss with them what they want professionally out of their role in the tax organization, Jennings asserts. She explains, “Do your hires want to do compliance 24/7 forever? You have got to grow your team professionally. The really great directors are looking for ways to develop their tax team and they tell them so; they are moving their tax managers and directors and staff around to get more experience in other areas to round them out to lead a tax organization one day. They are making a real effort to develop the next generation of tax directors.”

According to Santiago, the bottom line for retention is that employers should place more value on developing their talent. He explains: “Tax departments still need to spend time and money developing their staff’s technical skills, but now they must also help them advance their project management and communication skills. Can they write? Can they verbally communicate to non-tax technical folks in a concise manner? Do they understand the business objectives of the clients they’re with or the companies they work with, and can their thinking align with those objectives? The career development needs and wants of tax professionals is an important factor in retention across all generational demographics, and it must start from within the tax department.”

“As an executive search consultant my job is searching for the type of outstanding people that clients would never find on their own. Most every candidate I introduce to a client is not out actively looking but has a trusted relationship with me that says, ‘I am happy, but please keep me privately informed of opportunities you see that may fit my dream tax job.’ That is what I do—make dreams come true for clients and candidates.” —Kat Jennings


How do millennials fit in with the hiring and retention process today?

“We often use the word ‘millennial’ in a negative way,” Jung asserts. “I don’t think they’re bad. They’re just like we were, it’s just a different situation. They want to focus more on themselves these days. The idea of ‘Take care of the company. Work hard. Work forty, fifty, sixty hours a week. The company will take care of you’ has gone by the wayside,” he explains.

“Millennials want to learn quickly, advance quickly, and they get bored more easily,” Santiago states. “Tax departments need to rotate staff around and cross-train so these young staffers get a broad range of experience internally. We are advising clients to bring talent in right off campus through internships and then directly hire and train them. We are finding that the lack of public accounting training is not as detrimental as it once was.”

So, what is the bottom-line message from these recruitment, hiring, and talent companies? Here’s Jennings’ conclusion: “Good recruiters understand a company’s needs and help develop job descriptions with the requisite skills for the client, and then they develop a strategy to find these technical skills. I have to laugh when I have a client call, and they’ll say, ‘Well, can you just go to your database and find somebody?’ It’s just not that easy. Every search, every client has a unique atmosphere and culture and need, and every search is different and unique. It’s like a piece of art.”

“As an executive search consultant,” Jennings notes, “my job is searching for the type of outstanding people that clients would never find on their own. Most every candidate I introduce to a client is not out actively looking but has a trusted relationship with me that says, ‘I am happy, but please keep me privately informed of opportunities you see that may fit my dream tax job.’ That is what I do—make dreams come true for clients and candidates.”

Michael Levin-Epstein is the senior editor of Tax Executive.

Average Time to hire a Corporate Tax Professional

Here are the responses from our experts:

Jennings: There’s typical, and then there’s not-so-typical search. You just don’t know what you are going to get. As Forrest Gump would say, life is like a box of chocolates, and so is each search. Typical, ideally for all of us, I’m sure, would be ninety days to get through the process. But then you have other things that come up with the client, for instance, other people rotating in from other locations, or they may use video conferencing—the more people that are involved in the process, the longer the process takes. A good, clean search will take me ninety days, but it could also take 120 days if there are many people involved in different locations to interview the candidates. For a company who really doesn’t know what it wants, it takes longer than ninety to 120 days, then signals start to go off that something is not quite right and I speak with the client to discuss what may be happening and why…and how to resolve it. The goal with each client is to get the search done right and work to gain an outstanding result for the client. My clients expect a lot for the candidates we find, and we make certain to deliver outstanding performances for each client. I take it very seriously, as I am bringing them talent they will work with every day, and it leaves a lasting impression.

Santiago: I can give you some hard facts. Over the last two years, we have tracked all our number one and number two executive searches, and it’s a sizable pool of data. We found it to be a three- to six-month window to fill the search, and that is what we tell our clients to expect. If the search process is shorter than three months, then we believe it’s not a thorough search.

Jung: I think we’re all on the same page here. Kat, Tony, and I—we’re not searching for these people—we already know where they’re at. It’s more about matching and finding out if the timing is right for the candidate to make a change. To Kat’s point, yeah, it’s all about process. So, we’ve been able to fill our retainers with thoroughness and quality in as little as thirty to forty-five days on average. If hiring authorities are spread out or you’ve got travel and other aspects to contend with, then our retainers can get to three to six months at the most.


Leave a Reply

Your email address will not be published. Required fields are marked *

XHTML: You can use these tags <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>