Update on Tax Technology market - 2017
Before we focus on the current state of the tax technology market, with regards to jobs growth & demand, we should refer to the Reed job index for the broader jobs market:
Reed job index remains high – Reed produces a job index, a bit like the FTSE 100 but for advertised job levels. It gives an indication of demand / level of advertised vacancies for skilled workers in the UK. This was started in Dec 2009 at a base level of 100. As at March 2017, this was up to 303, a record high, following a very strong 1st quarter. This gives a year-on-year increase of around 17%. Also, it is worth noting that the index has remained high, around the 280-300 level following the Brexit decision in June 2016, signaling that the Brexit has not extinguished job creation and demand for people so far.
Now looking into our specialist market - tax technology within the UK & Europe, here is an overview of what see as the key trends affecting jobs and employees during 2017 so far:
1. Big Four / consulting sector remains buoyant – we have seen continued strong demand during 2017 so far for hiring tax & tax technology specialists into the tax & indirect tax technology consulting teams of the Big Four in the UK. There has been hiring activity at all levels of experience, with most demand at the Assistant / Consultant levels. The Big Four continue to expand their services in Europe, and we have seen a larger number of roles being created in other non-UK offices, e.g. Belgium, Amsterdam, Dublin. Also, due to the GCC countries introduction of VAT, this has led to indirect tax process & technology roles in Dubai, Qatar and Saudi. We would expect this to increase during the rest of 2017 and into 2018-19 as large corporates active in the area look to automate their VAT processes in line with their global ERP set-up.
In addition, we are seeing more activity from the firms outside of the Big Four i.e. consulting services on tax technology being provided by some of the Top 10 firms where they are starting to see a need from their large mid-cap clients. This has led to demand for candidates with both tax technology market experience and those that can develop clients and sell proposals etc.
2. Tax technology vendors stable - during 2016 and into 2017, we have seen less recruitment activity for tax and tax technology candidates amongst the tax software businesses in the UK. This is compared to 5-6 years ago, when we saw a high growth period amongst these companies as they tried to secure a foothold in the UK market. That said, this side of the market continues to evolve as we see new players / products and associated implementation firms requiring people with the tax-IT skills need to configure tax software on ERP and other IT platforms.
3. In-house tax technology recruitment – we have continued to see a low number of dedicated tax systems / technology roles being created in-house within large multinationals in the UK. The top tier (FTSE 20) and upper-end Global 500 groups now have some form of team dedicated to tax process & related technology, usually at the same site as a European finance shared service operation. Demand for tax technology skills in-house still tends to be greater for the indirect tax process side of the business relating to VAT / indirect tax automation, with the direct tax / tax reporting area remaining more of a 'manual' process. Looking ahead, we feel it is inevitable that large-end corporates will look to bring in-house more tax technology resource, as currently there is a high dependence on the Big 4 firms for providing this expertise. Some corporates will ultimately see more value in due course of having the expertise in-house.
There still remains uncertainty in the UK market in terms of the people and hiring impact from Brexit, however this is not halting current hiring activity. There remains strong demand for tax technology specialists - particularly those already with experience, and for new entrants i.e. junior tax professionals with relevant IT know-how.
For the foreseeable future, and more long term, we feel the most in-demand professionals will be those that have deep SAP or Oracle technical / functional experience whilst at the same time having a strong grasp of tax compliance process affecting large international businesses.
- Tax Software Suppliers
- Financial training
- Technical Publications