Although large sections of the UK press keep telling us that the global credit crisis is just a whisker away from pushing us into full blown recession, the market for VAT specialists at all levels remains defiantly healthy within public practice. In such an environment, competition for the best people is intense, mainly because there are still not enough trained professionals coming through the career development pipeline, but also because of a general inertia in the sector.
This inertia seems to have stemmed from a belief amongst many VAT specialists that, with a few exceptions, there is little to differentiate one medium or large firm from another. Moves are consequently often only generated by recruiters putting together persuasive individual cases for switching allegiance or by ‘one-off’ motivations, such as a personality clash with a superior or a need to relocate for family reasons.
Perhaps because of a degree of caution engendered by the current economic climate, few firms have sought to get the market moving in the time-honoured way – by throwing money at it. In fact only a relatively small number of ambitious, niche consultancies have entered into any form of buying competition to secure staff.
This is not to say that VAT staff are poorly paid. In fact they are now some of the better rewarded in the whole taxation arena. ‘Big 4’ managers, for example, are receiving base salaries upwards of £50,000 supplemented by around £10,000 worth of benefits, whilst bases for senior managers are between £70-100,000 and £110-150,000 for directors. It’s simply that the majority of employers seem unwilling to enter into a bidding war, which might send pay spiralling upwards, when there is so much uncertainty about the direction of the economy over the next twelve months. In the absence of significant pay hikes, successful recruiters have instead found themselves focusing on ‘softer’ issues such as work/life balance or tailored training and development programmes.
However while the ‘war for talent’ carries on in public practice, the reverse seems to be true across the burgeoning number of in-house tax departments and here VAT professionals find themselves involved in a ‘war for work’ instead. The problem for aspirant in-house employees is a simple one of supply exceeding demand. Somehow the in-house career option has become ‘sexy’ and not just because of any major financial considerations. Base salaries within companies and financial institutions do at least match and sometimes exceed those on offer in practice and additional benefits such as share options and pensions are the norm.
Bonuses are also relatively commonplace, although the substantial ones seen in the past within the banking sector may tail off dramatically in 2008. But overall the gap between pay within accounting firms and the corporate sector remains a narrow one. One of the key motivations for a move in-house seems to be a belief that it will offer more of a balance between home and office life, because there is no inherent drive to clock up billable hours. This is supplemented by a desire to work for just one organisation rather than a range of clients with the consequent opportunity to identify more closely with that business’ aims and goals and see projects through to fulfilment. Given the fact that in-house VAT teams are still relatively thin on the ground and small in headcount, employers can therefore afford to pick and choose from applicants and to be very specific in terms of the skills, experience and cultural ‘fit’ that they require.
How good in-house departments are at fulfilling their often unspoken promise to a candidate is open to debate. Many VAT professionals who do manage to cross over from practice often find that the demands of one client can be every bit as testing as those of several and that client may be sitting several feet away rather than at the end of a telephone line or email connection. And, because the in-house sector is so small, the prospects for moving onwards and upwards can be limited. Given the ‘pyramid’ structure of in-house departments, career and salary progression tend to be steady rather than dramatic for all but a select few.
Consequently we see some of the most ambitious VAT specialists treating in-house as a short to medium-term move rather than a long-term career option and returning to practice to chase the financial rewards of partnership – something fuelled by the fact that many firms regard ‘insider’ experience on the client side of the relationship as highly valuable.
Although the continuing drive to contain costs will very likely drive an expansion of in-house departments, particularly if a significant economic downturn does finally materialise, there is likely to be stiff competition for all roles for the foreseeable future. And despite the less intense atmosphere in public practice there is still no room for career complacency. Whilst firms have compromised on their desire for wider business skills in recent years because of the shortage of individuals with sufficient technical ability, there are now signs that this is beginning to change.
Once upon a time the process of moving up the career ladder was relatively straightforward. You did your job conscientiously, tried not to fall out with your colleagues or superiors, kept up with the latest technical developments and, in due course, you could expect to be promoted. But now the VAT workplace has become more complicated and the whole business of moving up, increasingly challenging.
Those VAT specialists who want to get away from the ‘coal face’ and into managerial, partner or director roles will require much more than technical competence and the ability to steer clear of trouble. They will need a whole range of extra skills, such as the ability to communicate effectively, to network both within a corporate environment and the wider taxation community and a clear appreciation of how their work will integrate with and contribute to the commercial operations of their employers.
In modern firms, companies and banks, VAT professionals often move up the ladder, not just because of their grasp of legislation, but because they are good at building relationships downwards, upwards and sideways across organisations and professional communities. A pity then, that personal networking is something that we here in the UK are still singularly bad at, particularly in contrast to our cousins across the Atlantic who seem to have been taught it from birth. Yet the ability to put together a group of individuals who can help you to perform more effectively on both a tactical and strategic level is becoming increasingly important and relatively simple to learn given the right motivation.
The key is to realise that effective networking is based on two simple pillars – the fact that most people actually like being asked for their opinions and assistance and an appreciation that the process works best when it is based on mutual benefit or good, old-fashioned ‘give and take’. Successful networkers are consequently not afraid to ask for help and they also take every opportunity to offer assistance to those who might be able to return the favour in the future. If you want to see an example of a master at work in this art, rent or buy yourself a copy of ‘The Godfather’ (just ignore the bit about beheading racehorses, shooting people who upset you in restaurants, etc).
However, what might be termed traditional management skills may be insufficient to move you upwards as fast as you might like these days. Now, particularly, if you have your sights set on the boardroom or the partnership table, you also need to be a leader.
A cynic might suggest that this is simply dressing up the same thing under a different name. However, while there are obviously a number of common elements to management in its widest sense and leadership, the key extra element is perhaps best highlighted in the dictionary definition, which, amongst other things, describes a leader as ‘someone who guides or inspires others.’ At its best, leadership can achieve much more than simple management. In a survey of fifty global companies, the research firm ISR found a direct link between effective leadership and commercial performance. In organisations where their superiors received an ‘average’ leadership rating from employees, sales improved over the course of a year by just over 6%. But in organisations where they were rated highly, sales rose by more than 10%. Its potential impact is therefore clear.
So, given how important leadership qualities obviously are, do you have to be born with them like the ability to sing well or paint great pictures (or even master the intricacies of indirect taxation), or can they be learned? Some of the world’s major business schools have set up specific leadership departments which ostensibly suggests that you can learn how to lead in the classroom. But the real picture is much more ambiguous.
According to Professor David Sims of the Cass Business School in London: ’We have come to the conclusion that the idea of the ”born leader” does not stand up; born to lead what, when and with whom? The idea of leaders being ”made” is equally romantic – nobody knows how to ”make” a leader.’
Perhaps therefore, the best way for a VAT specialist to develop leadership skills is to recognise your own inherent abilities and then hone them in the ‘front line’ of the workplace. And the most efficient and effective way of doing this is to watch out for the successes and failures of those around you. Having done just that for more years than I care to remember, here is my basic checklist of what makes a good leader:
1) Communication – The ability to get your message across in a clear, effective and emotive way can take you a long way. Just look at the example of Ronald Reagan if you want to see how far!
2) Clarity – People like to know what is expected of them and what objectives they and the wider organisation are aiming for.
3 Decision – Good leaders do not vacillate. Be clear about what you think and where you are going.
4) Adaptability – At the same time you need to be flexible enough to react to new challenges and opportunities. As John Lennon once said, “Life is what happens to you while you are making other plans.”
5) Approachability - Stay approachable and be seen to be part of the team. An open door policy will encourage your team to communicate openly and honestly with you at all times, which will make management and direction a lot easier.
6) Vision - A certain amount of vision and the ability to see the bigger picture, is vital for any successful leader. You have to be able to identify the problems of tomorrow today.
7) Example – Expect from others what you expect from yourself. Leaders belong at the front, not at the back
For those VAT specialists keen to take full advantage of the expansion of the in-house sector and the apparent resilience of indirect tax services across public practice, developing wider business skills is set to become ever more important. For many years both areas of the sector have compromised, settling for pure technical ability over broader commercial and general managerial competencies. But as initiatives such as the dedicated ‘Big 4’ training schemes impact the market, recruiters are likely to become much more strict in their requirements and competition for the best roles will hot up noticeably. You have been warned!
Alex Curcio specialises in practice and in-house VAT roles at financial recruitment firm, MRL Financial - www.mrl-financial.com
If you’d like to talk about using our recruitment services contact your
regional MRL office or email enquiries@mrl-financial.com
To find financial jobs in your area, use our executive job search or register your CV and we’ll contact you to discuss your career aspirations.
