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Compliance

Talent shortage ‘approaching crisis levels’

Tax staff have a lot to contend with.
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Francis Scialabba

3 min read

Tax and finance departments face a trifecta of concerns this year: increased regulations, constrained budgets, and a severe talent shortage. However, they’re optimistic about generative AI’s ability to relieve at least a little of the pressure.

Those are the key takeaways from EY’s 2024 Tax and Finance Operations survey, which polled 1,100 tax function leaders and 500 finance function leaders across 32 jurisdictions and 18 industriese this summer.

Squeezed budgets are top of mind: Cost pressures were respondents’ biggest concern this year, and managing budgets was their top priority. They cited lack of budget as their “biggest barrier to success,” beating out talent challenges and not having a plan for data and technology. 13% predicted their budgets would decrease or be frozen in the next two years.

Talent crunch demands new strategies: “Talent shortages in tax and finance are approaching crisis levels,” the survey said. The overwhelming majority (89%) of respondents said talent issues prevent their departments from “delivering on their purpose and vision,” and more than half (53%) described talent as an “extensive” or “significant” problem.

In light of the shortage, 54% of respondents said they were reconsidering their operating models, with many contemplating co-sourcing part of their tax work. These leaders are also more open to hiring tax and finance professionals without degrees: 62% said such candidates are “important to their talent strategy.”

Ramp-up in regs pressures departments: Recent changes in global regulation have required businesses to disclose more data, more quickly and cleanly, than before. Complying with these regs has put increased pressure on tax and finance departments, the EY survey found. For instance, 83% of respondents said they needed to make “moderate” to “significant” adjustments to their data to comply with BEPS 2.0.

Leaders are bullish on AI, but rote work is still prevalent: A majority (87%) of respondents agreed generative AI will improve efficiency in the tax function, up from only 15% last year.

But AI use is still nascent: 52% of tax and finance departments are using it on an “exploratory” basis, and 23% aren’t doing so at all. And rote work still forms a large chunk of tax staff’s activities: Respondents “spend 45% of their time on routine compliance activities such as data cleansing and tax return compliance and reconciliation.”

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News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.