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‘War for talent’ still raging in VAT

Despite (or perhaps even because of) the much-publicised credit crunch, which seems to be keeping the UK press so gleefully occupied at present, the demand for VAT specialists across public practice shows no sign of letting up. Firms still largely regard VAT professionals as potential business, and consequently fee income generators, rather than overheads and the result is a candidate driven marketplace at practically all levels.

How long this can continue if the economy does slow down as predicted is, of course, impossible to call but for now the competition to recruit and retain staff has created, if not an actual bidding war, then certainly an environment where VAT specialists are some of the better rewarded in the taxation field. In the Big 4, for example, managers now tend to attract base salaries upwards of £50,000 plus around £10,000 worth of benefits, whilst at senior manager level this rises to £70-100,000 and at director level to £110-150,000.

One of the main reasons that the market remains so candidate driven is not so much a shortage of people per se, but rather a lack of specific reasons for VAT specialists to make a career move at all. Faced with a perception that one medium to large firm is much like another, many see little reason to jump ship unless some definite external influence, such as a personality clash or a ‘difficult’ relocation makes its effect felt.

Apart from a relatively small number of niche consultancies who are paying above market rate to attract people, potential employers are therefore having to become more organised and imaginative in their approach to sourcing talent. This has meant much more detailed briefs for recruiters like ourselves, more attention to work/life balance issues and better ‘sales pitches’ about a firm, its plans and its culture.

However while public practice struggles with headcounts, the opposite seems true on the flipside of the coin – the increasing number of dedicated in-house VAT departments that have sprung up in recent years. The high level of interest in this option does not seem to have been prompted solely by pay. In-house markets certainly match the base salaries available in practice and the provision of benefits, such as stock options and substantial pension schemes is commonplace. Bonuses are also more common in-house and, at least historically, have been extremely generous in the banking sector, although the jury is still out on how attractive these will be during this year of financial turmoil.

However anyone expecting an exponential rise in earnings by crossing the line is likely to be disappointed. Instead the drift in-house appears to be heavily based on a desire to work for just one client i.e. one’s direct employer, rather than a range of them and the consequent closer involvement in that organisation’s business methods and objectives. It is also based on a perception that in-house work in some way offers a better work/life balance.

The extent to which this happens in reality is open to debate. However, together with the fact that in-house VAT departments are relatively small (major companies and banks rarely employ more than 10-20 people, for example), it has allowed them to be very specific about their requirements and to pick and choose from high calibre candidates – particularly when it comes to previous experience of the relevant sector.

Whilst in-house is consequently an extremely attractive career option at present, it is not necessarily a truly long-term one. As highlighted earlier, in-house departments are small and opportunities to move upwards are consequently limited by a distinctly pyramidal structure. Many well-qualified VAT specialists therefore find themselves having to consider a move back to practice in order to fulfil their potential and firms are all too happy to have them back – a period on the other side of the fence being viewed as a definite advantage in the career stakes.

Whichever side of the divide you find yourself on and no matter how ‘in demand’ your skills and experience are at the moment, there can be no room for complacency when it comes to career planning. Public practice firms and in-house departments are both increasingly keen on finding individuals who can combine strong technical expertise with wider commercial skills. In practicing firms this may mean good communication ability and client management skills. In-house it may mean understanding how to use the corporate network and how your contribution fits with the overall business goals of the organisation.

Just how much employers focus on these ‘value-adds’ depends largely on the law of supply and demand. At present, at least in public practice, a shortage of VAT professionals, particularly at senior level, means that inter-personal skills are still a ‘nice to have’ rather than essential. But as more and more people from the dedicated Big 4 training schemes exit the pipeline, we may find this changing. And in commerce, industry and banking, the fierce competition for the most challenging and best-rewarded roles means that it already has.

Alex Curcio specialises in practice and in-house VAT roles at financial recruitment firm,
MRL Financial - www.mrl-financial.com

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