How to bridge the tax talent gap in financial services

Spotlight on Gen Z tax talent 

While each generation brings its own perspective to the workplace, prompting shifts in how teams operate and grow, Gen Z (born between 1997 and 2012) is accelerating this evolution.
 

This cohort of digital natives, poised to become the largest segment of the workforce by the end of the decade, has come of age in a world defined by connectivity, automation and constant change. They usually expect employers to provide seamless technology, automation solutions, growth and development opportunities, support for mental health and wellbeing and flexible schedules that enable a healthy work-life balance.
 

Yet, the pandemic and remote work have limited their opportunities for in-person work experience and learning, exacerbated by offshoring practices that have often reduced exposure to hands-on tasks and foundational tax work. Additionally, Gen Z’s common preference for communicating through digital platforms can often hinder deeper conversations and the ability to ask critical questions.
 

All this necessitates a rethinking of how organizations approach talent development, particularly in cultivating the interpersonal skills needed for effective tax advisory roles. But it's not just generational dynamics driving this shift.
 

The impact of technology

Technology is often also fundamentally reshaping the skills needed for successful tax functions. With the rise of AI and generative AI (GenAI), tax professionals should usually combine technical fluency – particularly in data management – with critical thinking and human insight to navigate complex regulations and meet diverse client needs.
 

According to the EY TFO survey, 63% identify the skills gap as one of the biggest barriers to business transformation. This challenge is compounded by many professionals feeling unprepared to effectively leverage new technologies. Despite the growing adoption of AI tools in the profession, many tax professionals report insufficient training to fully maximize their potential with these technologies.
 

Capacity is another pressing issue, with many leaders struggling to manage workloads effectively, particularly in a hybrid work environment where collaboration can be hindered.
 

Identifying and developing the right talent

To help address these challenges, tax leaders likely need a comprehensive talent strategy built on two key pillars: first, attracting the right people by rethinking traditional hiring approaches, and second, developing critical capabilities through targeted training and development.
 

 1. Attract and retain the right people 

• Broaden the definition of tax talent: Look beyond traditional tax qualifications to consider candidates with strong analytical and tech capabilities, as these skills are increasingly essential in a digital and insight-driven tax function. This includes exploring non-traditional talent sources to enhance diversity and adaptability.
  
  
• Provide clarity in career paths that reflect new realities: As technology reshapes many traditional roles, it’s usually essential to define multiple advancement tracks – technical specialist, client advisory, integrated technology solutions or hybrid roles that combine tax expertise with data analytics. Be explicit about the skills needed for each path. This is particularly important for many younger professionals who often want to advance their careers and align their work with their personal goals.
  
  
• Invest in building data and IT abilities: Consider starting with tech-savvy professionals who already understand data infrastructure and analytics, then training them on tax specifics rather than trying to turn tax professionals into technologists. This approach – whether through apprenticeships, targeted hiring or partnership programs – can often help to build a pipeline of professionals who can bridge the gap between traditional tax knowledge and digital skills that are becoming core to tax operations.
  
  
• Outsource strategically to optimize talent allocation: Consider outsourcing or co-sourcing for routine compliance tasks and technical processing while keeping complex advisory work in-house. This usually enables internal teams to focus on high-value client relationships and strategic work while providing the ability to scale up during busy times without adding staff.
   

 2. Develop critical capabilities
 

• Integrate technology into learning: AI-powered training platforms can help personalize learning paths, simulate complex tax scenarios and provide real-time feedback on technical applications. For example, AI can generate practice scenarios based on real client situations, helping junior professionals to build pattern recognition and judgment that usually comes after years of client work experience. Technology can also help to identify individual knowledge gaps and recommend targeted interventions.
  
  
• Focus on soft skills: As automation handles many routine tasks, the premium on uniquely human capabilities grows exponentially. Prioritize developing interpersonal skills, critical thinking and commercial judgment to help teams navigate ambiguous regulations, build client trust in complex situations and translate technical expertise into strategic business advice.
  
  
• Embrace lifelong learning through targeted, tailored training: Focus on specific skill development that addresses individual gaps, whether that’s mastering new tax technology, understanding AI applications in tax processes, or navigating the ethical and risk considerations that come with automated decision-making. This approach to continuous upskilling can help bridge the generational experience gap and help professionals develop both the technical capability and the judgment needed to responsibly deploy new tools.
   

These strategies can help tax leaders to build resilient teams that thrive across generational differences. Organizations that successfully combine technical expertise, digital capabilities and human judgment, including effective tax planning strategies, will be better positioned to handle the evolving demands of tax functions while attracting and retaining the talent needed for long-term success.

This article is co-authored by Florence Esmoingt, EY People Advisory Services Tax leader, EY société d’avocats.