Tax departments struggle with an avalanche of data

Tax departments deal with an avalanche of data, and usually struggle to determine what to do with it all. In a recent survey conducted by KPMG, tax departments listed coding as “the most sought-after skill for tax talent.”

The survey polled 300 C-level executives at companies valued at over $1 billion, and found that 52% of C-suite executives aren’t using tax data to plan or forecast future scenarios—in essence, tax teams generate a significant amount of data, but don’t know how to effectively use it to gather insights. While the teams recognize the data as vital, the resources to sift through the data and gather insights are missing.

Finance departments are looking to hire to solve the issue, Mike Kelly, Americas finance consulting leader at EY Finance, told CFO Brew. CFOs are “looking for the data scientists…looking for the analysts—people that can dig in and understand what the data actually means, and then look to how to piece data together,” he said.

On the flip side, the endeavor has increased the cost per person—“your overall headcount is probably going down in certain areas, as you apply automation, but your cost per person is going to trend up a little bit because you’re upscaling that position,” Kelly said. And, tax departments have found it harder to recruit and retain employees due to inflation, higher wage demands, and lack of competitive benefits, making training difficult as employees flee the nest quicker, the study found.

KPMG found that 66% of finance executives rank emerging technologies (AI, blockchain, metaverse, and quantum computing) as the second most important skill for the future tax professional, followed by an understanding of spreadsheets and databases (58%).

“The problem is people throw technology at problems thinking that solves the problem, but it doesn’t,” Kelly told CFO Brew. “Technology doesn’t solve any problem; it just enables it. I can get to the data quicker, or I can identify the problem sooner, [but] it all comes down to the people and upskilling your talent.”

One way that finance departments have taught out better talent is by looking at neurodivergent candidates, Kelly said.

"That talent pool was overlooked for years,” Kelly said. Neurodivergent people can help interpret data in different ways, often finding nuggets of data that may have otherwise been overlooked, he explained, adding that EY has “invested in six different neurodiverse centers around the world, and I have quite a few clients doing the same thing.”—KT

Correction 09/14/2022: This story has been changed since publication to update Mike Kelly's title.