Accountancy firms have continued their investment in talent over the past 12 months meaning that hiring has generally remained consistent across all levels in the Big 4 and Top 10 (Tier A) firms in London, including some significant senior moves. However, the real shortage remains at Senior, Assistant Manager and Manager level. Within the mid-tier and
independent firms, an increase in demand for talent has been driven by various acquisitions of independent firms, as well as Private Equity (PE) backing.
Regionally, several of the large accountancy firms have taken the commercial view to create compliance centres outside of London to remain financially competitive to clients. Whilst this can be beneficial for a firms profit, the challenge lies in attracting enough talent to work in these locations. As a result, we have seen more flexible working opportunities offered to prospective and current employees to meet this increasing demand.
We have seen a demand for experienced tax professionals across most disciplines. Despite the nervousness following Brexit, we have seen increased hiring for M&A tax teams in contrast to last year. International tax and transfer pricing teams continue to face challenges with BEPS, country by country reporting and tax transparency which has led to a steady demand across all sectors, but specifically within real estate, energy, and telecoms, media and technology (TMT). Notably, the not-for-profit sector has been a growth area as firms seek to broaden their client focus in this space.
The financial services market within the profession remains busy, however demand varies across different niches. Insurance and transaction tax teams have experienced growth, with two of the Big 4 firms increasing headcount. This has been driven by succession planning but also delivery needs. One of the most consistent areas of growth is in the funds specialism, with demand for expertise across funds structuring, reporting, compliance and advisory. This has been led by an uptake in PE transactions.
Accountancy firms continue to seek traditional private client tax compliance and advisory experience. Following the growth in transactions within the PE market, we have seen demand for private client tax professionals with experience of PE clients. The Assistant Manager and Manager grade continue to be the most challenging levels to source candidates and knowledge of trusts is also in high demand. Following the introduction of
tax digitisation, the requirement for commercially driven as well as technically adept tax professionals is set to increase in this specialism.
From a human capital perspective, there has been an increased demand for employment tax professionals in the past 12 months as advisors look to support their clients on due diligence work, revised IR35 legislation and the ever-increasing media spotlight on the gender pay gap. In contrast, expatriate tax teams have been hit hard with several restructures made across the Big 4.
The key issues expected for the next 12 months, as cited from our survey results, are employee retention and talent acquisition, illustrating the ever-present link between recruitment and business performance. We expect these challenges to remain as 67% of team managers stated that they plan to increase headcount within this period. Interestingly, 72% of respondents stated they were looking to move positions despite 78%
‘enjoying’ their current role. Working hours, lack of resource and career progression were the key drivers for individuals wanting to move, which is interesting considering that 77% of firms now offer flexible working to employees and 81% of managers expect to promote existing employees within the next 12 months. The majority of these promotions are expected to be at the Assistant Manager and Manager level with requisite pay rises expected to come in below 5%.
In summary, the professional services market remains buoyant and candidate driven. As a result, accountancy firms need to move quickly and take a flexible approach to ensure the best talent in the market is secured. As technology continues to play a bigger role in the tax market, accountancy firms and their employees will be required to adapt their skill set, which in turn will create opportunities.