The new Thomson Reuters podcast, Tax & Tech Talks explores the evolving intersection of tax and technology. Each episode explores current issues or topics, giving listeners an opportunity to gain a deeper understanding and new perspectives in tax and tech. We chat with top subject matter experts and industry leaders as we break down these top-of-mind topics.
In this episode, “Teaching Tax vs Teaching Tech: A Conversation on How to Address Skillset Gaps and Talent Development in Corporate Tax Departments” our host, Thomson Reuters own Bianca Kuijper, Direct Tax and Transfer Pricing Director, talks to Juniper Wilder, Solution Consulting Lead, about talent acquisition, and management in corporate tax departments. The discussion centers around a recently published 2020 Corporate Tax Departments Survey, which was conducted by Thomson Reuters and Acritas. The report takes a deep look into the current challenges that face corporate tax departments that require a team with both tax and tech skills and what is needed to resolve these challenges.
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Teaching Tax vs Teaching Tech: A Conversation on How to Address Skillset Gaps and Talent Development in Corporate Tax Departments
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Do tax departments face a skillset problem?
In discussing our survey findings, we hoped to better understand the underlying issues in corporate tax departments, and what needs to change to fix them. A slight majority of 54% of main survey respondents stated that they feel their tax team is under-resourced. Both the lack of tax and tech skills were identified as part of the problem — 39% said their team lacked specific tax-related skills, and nearly one-third of teams lacked technological skills.
When asked if she felt this was true in her personal experience, Wilder responded, “It always feels like what you need and what’s available never seem to line up exactly…because of that, you’re constantly trying to find someone that has capabilities to do what you need, but maybe doesn’t have the exact experience.” Regarding finding professionals with certain tax skills, she recalls a specific example of this in a previous role. She once needed to hire someone to assist with IRS Form 54-71 processes but in the location where she was, tax professionals with knowledge of IRS Form 5471 weren’t readily available without relocating. IRS Form 5471 is a complicated information return that US residents with certain roles and/or holdings in foreign corporations must complete annually.
The cost of recruiting and relocating a professional for the position was not financially viable, so flexibility was key. Wilder ended up taking a tax professional who had a lot of federal and state tax experience and training them on some of the international tax concepts, which cascade to the federal and state area once they’re calculated. Wilder notes that the important thing to always aim for is expanding the background each talent has.
Teaching tax or teaching tech?
One major debate regarding talent is whether it is more effective to teach technology to tax professionals or to teach tax to technologists. An 81% majority of survey respondents were largely in favor of the former, although Wilder believes that both can be effective. The key factor is the desired career path of individual talent. If someone sees themselves as a tax person, generally they advance by learning more technical tax skills. If someone does not see that as their future, they might look for a more general role, which could be a technology-related one, especially since technological skills can apply to other areas of business, such as finance or supply chain. Career goals really play a big part in it, but general capabilities and aptitude should be considered as well.
Making the case for technology investment
As corporations work through the impact of COVID-19, our survey found that many tax departments are putting new technology projects on hold, which may set corporations further back. While we found that the median spend on technology was 10% of the total budget for corporate tax departments, we found that those departments that allocate more than 10% to technology tend to have less overall spend in relation to revenue — a clear testament to the direct benefits of investing in technology, and the new skillsets needed to go with technological advancements.
Read the complete 2020 Corporate Tax Departments Survey here.