The professional services tax market – where to now?
The first half of 2024 has seen a more challenging recruitment market in comparison to the same period in 2023. In part, this was anticipated due to the cyclical nature of the professional services recruitment market however there has also been the background of a recession and period of significant political and economic uncertainty. Over the past 12 months, many professional services firms have had much of their publicity focused on redundancy programmes, pay freezes and a reduction in the number of promotions. All of this has impacted the external hiring landscape.
Many of the tax teams we speak to on a regular basis within the profession, continue to enjoy high volumes of work and some more so than before and the complexity within the tax industry shows no signs of abating. As many firms start to look ahead to a period of greater certainty and growth potential, we have seen hiring volumes steadily start to increase with many firms looking to take advantage of a less competitive market to hire the best talent. We anticipate that this trend will continue as confidence returns and the immediate pressure on budgets eases. This sentiment has been reinforced by the results from our recent survey as over 77% of hiring managers stated that they anticipated recruiting for their teams in the next 12 months.
Despite the reduction in hiring over the past 6 months, we have still seen some strong talent available in the market, meaning that the landscape remains competitive. Our experience is that most of these individuals have clear and considered reasons for leaving in comparison to 2022 when many individuals understandably flocked to the market knowing it was in their favour, to leverage counter offers or move for purely financial reasons. In our recent survey, nearly 45% of respondents stated that they will consider moving roles in the next 12 months and most interestingly, the motivation for moving is now not predominately down to financial reasons (albeit this is still a key factor). Culture is becoming one of the most cited reasons for considering a move, particularly at the more senior end.
Hiring trends
Most introductions (70%) we have made over the last six months have been with firms outside of the big 4 firms however we anticipate the outlook for the rest of 2024 will be different as many of these firms looking to make headway on their FY25 hiring plans. Interestingly, we have seen an increase of 20% in the legal roles we have been mandated on, a positive trend that has continued from last year. There has been an even split between senior appointments and those at Manager level and below, and the 31% of our placements were made outside of London. From a DEI perspective, the placements we made were an even split from a gender perspective (50:50) and 40% of our placements represent an ethnic minority group.
Overall, we enter the 2nd half of 2024 with a positive outlook. Whilst some uncertainty remains economically and politically, we expect that the recruitment of tax professionals in the profession is likely to steadily increase based on the conversations we are having with our network and the results from our recent survey.
If you would like to reserve a copy of our latest UK professional services salary survey and market report or would like to discuss anything in this article, please contact Sarah Reid on [email protected].
