2022, as portal to pecuniary Elysian Fields. Highly competitive market conditions. A sustained hunger for strategic tax talent. A brimming pool of extraordinarily qualified senior tax professionals who are ready to explore new ways of working and relocate overseas part of the Great Resignation movement. Revolutionised leadership that recognises the need for change.
Market optimism in 2021 shaped different realities for 2022. All strategic growth trends that we took as standard in the pre-pandemic have evolved. We are now witnessing a fascinating and winning blend between the old and the new that makes progress an irresistible and impending direction in 2022.
Like never before, there is an immediate and pressing need for tax leaders to re-imagine growth and inspire. If in 2019 and 2020, time was not usually putting pressure in decision-making on strategic hires, now we clearly see an expedite and intense client demand.
Global tax trends: Vertical growth and our role in strategic recruiting
As a specialist tax search firm, our quintessential role pre-COVID-19 was to act as a strategic advisor that adds value by thinking outside the box to find different and diverse talent to drive in particular horizontal growth. End of 2021 defined by market optimism shifted our role into a catapult for vertical growth of the business in already established tax areas. The last two years’ economy knighted as most in-demand tax specialities, M&A tax, transfer pricing (TP) and indirect tax, alongside the undisputable demand for tax and TP technology.
Tax changes sparked a flurry of M&A activity and the need for experienced transaction tax professionals worldwide. In the US market especially, new tax proposals anticipate two waves of M&A deal activity before and after legislative implementation. These will impact the level of M&A activity in 2022, the value and structure of transactions, making the US an attractive destination for M&A tax professionals up for a challenge.
Alongside higher demand for specialised skillsets like M&A tax, there are specific expectations regarding the generalist skillset for tax leaders, especially technology related. The new data infrastructure of the post-COVID-19 world and the bold new global minimum tax framework, where the future of tax is defined equally by automation and transformation, unequivocally demands all tax leaders to integrate strong and prominent data technology architecture in their tax acropolis. Upskilling becomes a given in the context where new global policies and local budget announcements press to reassess, and possibly revamp, entire tax strategies.
Global tax trends: Tech skillset demand and the robust appetite for ESG
The foxtrot between ‘technology first’ and ‘tax data first’ demands leaders to step up, be tech-savvy and creative to develop voguish operating models. Amongst many particularities, ‘blockchain’ knowledge demands accelerated in the last year, with clients specifically asking strong technology acumen in tax leaders’ profiles.
Entire practices are rethinking the relationship between tax, people and technology and tax leaders are looking to acquire tax technology teams and build revenue-generating businesses. For example, we are now witnessing a stronger predisposition towards digitalisation in areas such as tax arbitration, with the WTO Dispute Settlement Practice that promotes a gradual evolution of the international tax dispute resolution system. The technological wave also seems to shape the future of Transfer Pricing Controls via proposals of uniform methodologies for coding advance pricing agreements (APAs) into smart contracts.
2022 will continue the demand for ESG and indirect tax talent to support proposals in the realm of value-added tax and environmental taxes across the EU and US. Environmental tax incentives attract multinational tech-companies in jurisdictions like Sweden, Denmark and Finland where the ESG tax regime becomes a logical international tax competition tool. Carbon tax remains a highly debated topic, with jurisdictions like the UK implementing its own UK Emissions Trading Scheme (UK ETS) following Brexit.
Global tax trends: The war for talent and building strong teams
The war for talent for the above capabilities will carry on in 2022. A common saying is that best people are rarely ‘looking’ for a job, yet with the ‘Great Resignation’ movement that started in 2021, we learnt that in the recent times, people’s priorities have changed, and they are becoming more and more flexible about their career choices, whether it is local or moving overseas.
Tax teams that are not focused on nurturing their talent and look after their people innovatively, by paying attention and asking transparently what their actual needs are, are due to lose out in only a matter of months. For example, overseas mobility and talent acquisitions we were part of increased by almost 100% in Q4/21 when compared to the same time last year. Flexibility and experience became new drivers for tax professionals worldwide who see change as an opportunity to achieve upside potential and gain a competitive advantage.
The bottom line is: for tax leaders looking into strategic direction for next year, the 2022 global trends regarding hiring, technology and automation demand and strong ESG appetite represent good indicators into where your tax function is headed. For leaders thinking about making a move, the global tax trends should give you an understanding of how important a winning personal leadership brand is and that a career move is natural for your progression on a professional but also personal level.
2022 is the year when the old and the new ways will blend beautifully, with the characteristic speed of change that we are used to in tax. The finish line is never where you think it is.
© 2021 Euromoney Institutional Investor PLC. For help please see our FAQ.