Introduction
A turbulent and sometimes contradictory year, 2022 revealed both the resilience of the tax employment market but also some fundamental challenges.
While economies across Europe started to feel the effects of geopolitical and macroeconomic events, it has done little to dampen demand for the tax recruitment market across the continent. The creation of new roles in conjunction with record levels of staff attrition has created a perfect storm of demand across the spectrum of taxes.
For many organisations, staff attrition has been the biggest obstacle to achieving objectives. Overall turnover rates for tax professionals doubled between 2019 (12%) - 2022 (23%). For junior tax professionals with less than 8 years of experience, the turnover rate is higher, with one in three moving organisations within the last 12 months.
This has resulted in inflation-busting pay rises, particularly for more junior grades. While our data suggests an overall average increase of 10% (up from 7% in 2021), this figure is significantly higher for junior staff. We expect this trend to continue, particularly in more talent-restricted markets such as the UK, Netherlands and Switzerland, where there is an insufficient supply of newly qualified tax professionals to meet demand.
Perhaps counterintuitively, senior pay has remained static or fallen due to poorly performing stock-based rewards. Technology and high-growth sectors have been hit especially hard, most visibly demonstrated by the retreat of the Silicon Valley heavyweights. By comparison, salaries at more institutional ‘dividend stock’ companies have performed far better. While in-role remuneration may have stagnated, we have seen an increasing number of senior opportunities enter the market. A well-documented post-Covid trend which has seen an increase in early retirement has helped further fuel demand for new leadership positions.
Demand was not restricted to any specific tax discipline, though we saw a high volume across indirect tax, compliance & reporting, and transfer pricing. With BEPS 2.0 looming in the distance, in addition to continued digitisation initiatives across the continent, it’s unlikely these hotspots will diminish in 2023.
Broad predictions for the year ahead are always challenging, but it is hard to see how demand for tax professionals will decline over the next 12 months.
As the wider international tax landscape continues to develop, tax roles will remain high on the agenda for organisations, driving role creation for both multinationals and professional service firms.