2016 was nothing if not a year of change. It is therefore perhaps unsurprising that the People Services & Human Capital market has not been immune to a real sense of flux.
In 2016, technology was often at the forefront of any discussion; Audit rotation seemingly found its momentum (and is set to impact the Market Share that the Big 4 firms have in relation to each other via the RFP process); and the structural make up of both Advisory and In-house teams were looked at in great depth.
The spring and early summer saw a predictable slow down across the Advisory and In-house markets; employer sentiment adopted a ‘wait and see’ approach to hiring around Brexit. This slowdown was most pronounced within the majority of the large accountancy firms and within the Global Mobility Services/ Short Term Business Visitor (STBV) space.
Advisory Workforce Reallocation/ Technology:
Whilst hiring levels across the Advisory space have now returned to a level of buoyancy, the type of role being recruited and they type of skillset sought has changed. The commoditization of core tax compliance services (within and outside of the RFP process) and investment being made by HMRC through ‘Making Tax Digital’ has made like-for-like hiring within core expatriate tax compliance and global coordination a rare thing. Larger Advisory businesses are looking to combat the downward revenue pressures by offering a wider ‘suite’ of services and by investing in areas such as transformation, data and analytics, Executive
Compensation, Equity reward and STBV & Reward software.
Simultaneously, clients are looking at the nature of their employee workforce – especially when it comes to their physical location. Advances in technology, paired with a change in mindset from some employers, has meant that home or flexible working initiatives are increasingly common. As such, the geographical location of an employee is of diminishing importance when it comes to hiring top talent.
Whilst like-for-like Expatriate Tax hiring within the larger Advisory firms remains relatively quiet (within larger client FTSE and FS orientated account teams) the volume of work within their ‘middle market’ or smaller population focussed teams remains strong across all core areas of Human Capital (Expatriate Tax, Employment Tax and Reward). Similarly, within the smaller Advisory firms there is a continued focus on expanding functionality within the Human Capital space.
In-house Reallocation / Trends:
Outside of the Big 4 Advisory firms (and a 3 month ‘lul’ around the referendum aside) the Industry Market has remained busy and indeed each year seems to see a larger population of Expatriate Tax, Global Mobility, Employment Tax and Reward professionals employed within the ‘in-house’ sector. Ten years ago, an in-house leaders of Employment Tax and Expatriate Tax event within London would have yielded a far lower turnout than one in 2017! Mid-Senior to Senior Mandates have become very prevalent.
Interestingly a number of these roles are ‘greenfield’ opportunities, whereby clients are setting up functionality and in-housing specific expertise for the first time. Others are driven by Joint Venture Activity, the restructuring of the tax teams or, in some cases, simple replacement hiring. As the In-house sector looks more closely at their Employee Tax exposure and as Heads of Tax and HR look at reputational risk (outside of day to day operational compliance) we expect the trend to upskill existing capability or create new functionality to continue.
If any trends are to be drawn within the In house market then it must be said that there has been a real focus on Employment Taxes (and to a lesser extent within reward) hiring rather than Global Mobility / Expatriate Tax. This is quite a departure from 2014-2015, whereby the lion’s share of mandates were mobility focussed with an element of domestic Employment tax. Around 80% of the mandates from Manager through to ‘Head of’ have been routed in Employment Taxes as a principle focus.
The situation of these roles within organisational structures appears to be changing too. Heads of Tax who may well have been happy with Employee taxes siting with HR in previous years are increasing keen to have a more operational oversight over this specialist area ensuring that roles are migrating or being recruited within ‘Group Tax’ or Finance on a far more regular basis than within an HR reporting line. With all of the accountability should something go wrong it is perhaps unsurprising that Heads of Tax wish to now have full oversight this area.
Market In 2017:
Overall, despite the changes and challenges within the sector, exciting opportunities remain for those to further their careers either within the Advisory or the growing inhouse sectors. Salary and compensation levels remain very competitive and 2017 is likely to be another busy year.
For Salary or Benchmarking insight or indeed for a wider discussion about mandates within the People Services / Human Capital sector please contact one of our specialist tax consultants