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About In House Tax

About In House Tax

This weblog is a news and views site for tax professionals within the UK and international in-house tax community.  You will find information about appointments and people moves in and around the in-house tax market, issues affecting the in-house tax professional, opinions on the state of the tax job market, updates on tax technology, and other general thoughts of the day.

Hope you find it useful.

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Location: St Albans, United Kingdom

This site has been developed by Simon Godley, who also runs the niche tax recruitment company Talentpool Selection . Simon spends a lot of his time placing tax specialists into FTSE companies, large in-bound groups and some professional services organisations. He also recruits and is well networked around the UK tax technology and VAT markets.

Tax News

Which way is the tax job market heading?

Wednesday, 3 October 2012

By Simon Godley

It's now October 2012.  It's been a monumental summer of sport - Euro 2012, London 2012, Andy Murray and then the Ryder Cup at the weekend.  Whilst these have been fantastic British events and highly enjoyable, they have continued to distract us away from what is happening in the economy and where we are (or think we are) in the job market cycle, and indeed the tax job market. September had a real 'back to school' feeling, and as we move into October we can try to appraise and make some sense of the UK job market.

The Reed Job Index, which gives some form of metric on number of new job opportunities across the UK each month from the jobsite was 134 for September 2012.  It was 121 in Sept 2011, and so much more positive when compared to this time last year.  However the index was up at 142 in March 2012 and so has dropped c.6% since the end of the 1st quarter of the year.  The ONS (Office for National Statistics) has shown that the labour market has been fairly stable over the last 12 months, and that conditions if anything have improved during 2012.  However there was some confusion in the news last month, in that the optimistic labour figures were at odds with GDP, which has continued to drop since Sept 2011.  However at the time of writing, we are just getting to see that GDP has increased slightly (c.+0.5%) for the quarter to 30 Sept 2012.  Basically GDP is fairly flat, hovering around 0%.

So a few mixed messages there, but these stats are over quite a short period of time, and I think hard to see any longer term trends emerging.  So currently I think it's a little bit difficult to know whether the job market is continuing an upward trend (with a current temporary dip) or is just starting to display some more fundamental weaknesses over the last few months.  I think the general feel from this is that both the economic and labour markets are weak, but fairly stable.

From my view on the market, I can give direct commentary about what I am observing within the tax jobs market.  This is a sub-part of the finance market, and that being a large part of the overall job market, these areas are all connected, have similar behaviours and can therefore give a perspective on the general UK job market.

The tax job market has been quite slow over the last 6 months, and as we have moved into the 2nd half of the year, heads of departments and hiring managers are finding it harder now to get approvals to recruit.  This is particularly the case across the Big 4 consulting firms, with one Big 4 firm in the UK making some strategic redundancies across tax within the last 6 months.  I think the Big 4 seem to be in a limbo state, not quite sure whether to hire now for the longer term, stop hiring or make some cuts.  The in-house market is quite stable, although this tends to be the case even in the most turbulent of markets, mainly because in-house tax teams are small and lean operations.  Also, making large cuts in the tax team could be counter-productive on costs as the tax work may need to be outsourced to a Big 4, leading to higher cost overall.

I think the jobs market is suffering a dip in activity at the current time, mostly as a knock-on effect of the worries around the Eurozone finances earlier in the year.  The tax & finance job market tends to lag (by up to 6 months) the economic and stock markets, and so we are now experiencing in the jobs market the effects of the uncertainty in the Eurozone that we saw some months ago.  It seems that the ECB will do 'whatever it takes' to recover the debt markets, but there is still clearly large amounts of uncertainty about the future of Eurozone finances.  While this is the case, I feel that the jobs market will follow suit and possibly behave inconsistently in the medium term.

The tax jobs market has improved a lot since the lows of 2009.  It has returned to a higher demand / supply ratio, and conditions feel reasonably stable.  However, the market is by no means brilliant - recruiting is taking place, but it is tending to be for essential 'must have' positions, and we are certainly still not seeing much recruiting for growth.  And let's face it, with GDP bobbing between -0.7% and + 0.5%, we may not see that type of recruiting for a while longer.  Any jobs market needs strong confidence in the underlying economic market, and we don't have that right now.

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posted by Simon Godley


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