How organizations can build future talent health in the tax function 

How can organizations unclog the tax talent pipeline?

When it comes to talent issues, we are living through a disruptive moment, requiring new thinking for attracting, retaining and training the workforce of now and tomorrow. And it turns out there’s a lesson to learn from a perhaps unlikely place: tax and finance functions. 

Roselyn Feinsod: "The worlds of talent overall and the world of talent for tax and finance are really changing."

Roselyn Feinsod is the EY Global Work Reimagined Leader. For years, she’s used global survey data to help anticipate, track and analyze workforce trends. What’s pushing or pulling employees in the labor market, moving them away or toward an employer? It turns out the pushing and pulling just… is.

Feinsod: "…one of the key things that is changing is this concept of talent flow. This idea of, it used to be you look for a job and you kind of stayed put and did what you did for at least five or seven years before you think about doing something else. Well, that's really changed quite a bit. And so, if you look at our latest Work Reimagined study, the tax and finance cut 42% of people that would look to possibly switch jobs in the next 12 months, and that's 38% for the workforce overall."

How talent health channels talent flow

Feinsod says talent flow is constant. Employees are moving more than they used to. Organizations can’t stop this but can channel the flow by improving talent health.

Feinsod: "So there is this concept of talent health where people are willing to recommend their employers to others and the overall score of talent health is about 55. And when you look for the finance team talent, it's actually a bit higher than that, it's 61. So, 61% of people would be net promoters, and are excited and proud about what they do and want to recommend it to the next generation of workers."

Another way to describe talent health is when you take care of employees and help them thrive while they're with you, they're more likely to tell others that "hey, this is a pretty good place." And tax and finance professionals are more likely to do that than average.

Feinsod: "It's really driven by kind of three legs of the stool in order to get that talent health. You have to be rewarded appropriately — your total compensation and benefit package has to be right. You have to have the right types of learning and skills opportunity. You have to have a culture and a behavior where employees trust their leadership — they like their teams, they work well together. So really a mix of those three legs of the stool in order to be in a good place of talent health."

Tax and finance talent face a perfect storm 

It's important to think about talent health, especially for tax and finance functions, because of the sheer number of challenges organizations are facing both internally and everywhere else.  

Adrienne Figur: "There's a perfect storm right now of cost pressure, demographic change and the ever-changing technology."

Adrienne Figur is the EY Americas Retail Tax Sector Leader, who for years has closely worked on the tax talent question specifically, and tax and finance operations more broadly.  

Figur: "So for the first time, cost has overtaken regulatory complexity as the number one barrier for transformation within departments. At the same time, you continue to have retirements at the top end of our tax departments and a shrinking population of new professionals entering the industry, and that's causing people to think about their talent gap. And then finally, you have all the excitement around generative AI. Everybody's talking about it. You can't leave a meeting without AI being a topic of conversation."

Inherent strengths of tax and finance professionals

Despite the many pressures, tax and finance professionals have inherent characteristics that may help the function transform, while managing potential future risks. But to realize this, there is a need to map current strengths with future needs.

For example, an inherent need to respond to fast-paced regulatory, legal or compliance challenges might equate to agility and curiosity. 

Or the need for efficiency has opened the profession to technological progress and innovation, vital to define the GenAI opportunity for the function. 

This all may be easy in the theoretical, but it still needs to work in reality. 

Figur: "You've got tax and finance teams across the globe who are being asked to do more with less. They're being asked to transform, but also have shrinking budgets or budgets that are staying flat, which makes it really, really difficult for these for these departments to upskill, to invest in new technology and honestly to think beyond tomorrow, but really think through what is their long-term workforce planning."

Tony Ganzer: "This balance between acute need and strategic vision seems to come up again and again… I wonder if you can maybe react to that mindset where you have to be strategic even as you're trying to deal with acute issues."

Figur: "Tony, that's a really great question, because if you can't see beyond, beyond the immediate, it's very difficult to see what's coming down the horizon. So I would suggest that tax leaders prioritize what needs to get done, obviously needs to get done, and think through elevating their existing teams and delegate more to those people so they can focus on what's in the immediate future and what's staring them in the headlights and reserve some time for themselves to sit with what the strategy needs to look like for the future."

Tax and finance professionals can build on their strengths while also rethinking how their roles will look in the future in respect to technology, skills and career development, and how new sources of talent can help drive necessary transformation. 

Success is never guaranteed when trying to shift from old paradigms.

But here are three areas of focus:

1. Embrace GenAI for talent transformation

Leverage GenAI tools to streamline compliance and regulatory processes, allowing tax professionals to focus on strategic advisory roles and enhance their value within the organization. By automating routine tasks, tax departments can reduce errors and improve efficiency, and leaders can encourage positive change.

Again, here’s Adrienne Figur: 

Figur: "I do think it's important for tax departments to continue to think about tax technical skills, but honestly that is table stakes. Having tax technical skills is something that every department's going to need. But the two areas that are really coming to the forefront are digital fluency and leadership capabilities."

2. Related to the first, foster a growth mindset and continuous learning

Building on your organization’s talent health, enhance and expand the necessary training and education that encourages a growth mindset and more innovative investment in learning and development. 

Again, here’s Roselyn Feinsod:

Feinsod: "Yeah, look, there already is a certain agility baked into the profession, the overall talent health at least for those that are in the profession already, is definitely stronger. And to get Gen Z and then what is actually just gonna start now with Gen Alpha entering the workforce, to get those new generations to have the same passion as the existing workforce had for the profession and the fields, acknowledging that the roles are changing and the skill mix is changing."

3. Expand talent pools with non-traditional hires

Organizations can broaden the talent pipeline by considering candidates without traditional qualifications but with strong analytical and technological skills, enhancing the diversity and adaptability of the tax and finance function. This approach can complement tax-specific knowledge and tap into a wider range of experience and perspectives, driving innovation and improving problem-solving capabilities.

Figur: "So when you're looking at that additional pool of talent that really wasn't accessible to you previously, this GenAI skill set helps bridge that gap, and it supports adaptability, it supports change."

Tax and finance functions should innovate through disruption to shape future roles with confidence. By adopting these strategies, organizations can navigate the disruptive changes in the labor market and position themselves for long-term success.

Maybe the question is not so much about unclogging the tax and finance talent pipeline, but is your organization building the pipeline it needs to shape the future? 

Thanks for listening to this episode of Tax Threads from EY. Please remember to rate this podcast and subscribe for future episodes. For in-depth analysis of tax and law issues, check out our Tax and Law in Focus podcast. It is also available on EY.com, Apple, Spotify and other popular podcast platforms.

Conversations in this podcast should not be relied upon as accounting or legal, investment or other professional advice. Listeners should consult their own advisors. The views expressed in this podcast are not necessarily the views of the global EY organization or its member firms and should be considered in the context of the time in which they were made.