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Published: June 21, 2024
Updated: June 21, 2024
The tax function is undergoing a significant transformation. With rapid advances in technology such as AI, automation, and data analytics, tax is becoming increasingly digital, data-driven, and strategic. A constant flow of new rules and regulations adds another layer of complexity, requiring agility and deep expertise from tax professionals to stay ahead of the curve.
Meanwhile, tax leaders are gradually becoming strategic advisers within their organizations. They must contextualize tax issues within broader business goals and communicate implications to senior leadership. This shift demands skills like strategic thinking, business acumen, and executive leadership.
This evolution in the tax function requires new skillsets that many tax departments currently lack. Tax leaders around the world are facing challenges finding and retaining professionals with the necessary skills to keep pace with the changes. BDO’s Global Tax Outlook Survey of global tax leaders found more than one in five respondents or 21% identify recruitment of tax talent as their top challenge for the next 12 months.
Upskilling is mission-critical to develop these essential new competencies. With the accelerating pace of change, tax professionals at all levels require continuous learning to remain effective. By analyzing skill gaps and providing training aligned with future goals, tax departments can build agile, resilient teams. This will empower teams to shift their focus to more value-add responsibilities and to becoming strategic advisers and partners. Failure to do so can leave organizations lagging behind competitors.
Identifying areas for skills development in tax departments
1. AI and automation
Tax departments are lacking AI and automation expertise. To leverage these technologies effectively, tax professionals will need to develop new skills. Many routine compliance tasks are being automated, freeing up tax teams to focus on strategy, innovation, and value-added work. However, this shift requires developing capabilities in data analysis, critical thinking, and interpreting AI outputs.
“We have to start thinking about what our industry will look like and how it will evolve in the future,” says Greg London, Partner, Tax Talent & Domestic Tax Consulting Leader, BDO Canada.
"And when I say future, I’m talking about next year. The technology is galloping so fast, we have to start right now."
Closing the skills gap in AI and automation is a priority for tax teams, as it enables tax data-driven decision making, risk management, and process efficiency. It's important to not only teach employees how to use AI effectively but also encourage them to apply their deduction and reasoning skills alongside AI systems.
To stay ahead, a commitment to continuous learning in AI is essential for both individual and organizational success. By developing these skills, tax leaders can position their function as a forward-looking partner to the business.
2. Strategic thinking
As tax functions evolve, strategic thinking is becoming crucial for tax professionals to develop alongside their tax knowledge. With the automation of mundane tasks, tax teams can focus on delivering value to the business through forward-looking, strategic decision-making.
By honing their strategic thinking skills, tax professionals can identify opportunities and risks that impact an organization's competitive positioning and advise on long-term plans that create value.
"While technology plays a crucial role, there remains a gap where human expertise is essential. AI lacks the ability to use judgment, which is where tax professionals excel. They can apply their judgment and leverage research findings in ways that AI cannot."
Strategic thinking is a learned skill that requires dedicated study and practice. Training programs and mentorship opportunities that build critical thinking, problem solving, and data interpretation skills are important. With the right development, tax professionals can offer valuable insights and guidance, cementing their role as trusted advisors in the evolving tax landscape.
3. Technical specialization
Tax rules are becoming increasingly complex and tax departments must rely on deep technical specialists to navigate the intricate rules and regulations. This need for specialization is evident across various service lines. “We’re going to need to become specialists within our specialist service lines,” Harry Chana, International and Cross-Border Tax Services Leader, BDO Canada shares.
"Specifically in areas like international tax, the complexity has reached a point where one individual cannot handle all aspects of it. The need for inbound and outbound specialists, as well as experts focusing on M&A or due diligence, is growing as the rules continue to evolve and diversify."
Without specialized expertise in niche areas, organizations may struggle to keep up with frequent tax law changes. This could result in missed opportunities to leverage complex tax incentives or failure to recognize potentially costly misapplications of obscure tax provisions. By having these subject matter experts, teams can identify tax savings, ensure compliance, and provide value-added advisory services to the business.
However, competition is fierce for top technical tax talent. To attract and retain these specialists, organizations must invest in competitive compensation packages and provide ongoing learning opportunities. With strong technical talent, tax departments can confidently navigate complex tax landscapes and act as strategic business advisors.
Addressing key challenges in upskilling tax teams
One of the primary challenges tax leaders must navigate as they upskill their teams is the speed and pace of change. The traditional multi-year training programs are no longer viable, as by the time individuals are brought up to speed, the landscape has evolved significantly once again. Time is of the essence in deciphering and incorporating new technologies into their practices to benefit their teams and clients.
Another challenge arises from the diverse skill sets and geographical dispersion within global or national organizations, especially in a vast landscape like Canada. With the uneven distribution of professionals, achieving consistent and uniform skill development becomes a daunting task.
To overcome these obstacles, leveraging technology is essential. The same disruptive technologies that are impacting the industry can be utilized for learning and development. Compared to traditional in person-based training, digital learning significantly expands access to knowledge across global teams in a flexible and cost-effective manner.
To address skill gaps, tax leaders can assess team skills across locations and customize training programs accordingly. By curating relevant online courses, videos, AI simulations, and other digital content, tax teams can enhance their skills in areas such as data analytics, process automation, strategic planning, mentorship, and more.
Additionally, fostering a growth mindset culture encourages teams to take charge of their own learning. By instilling a sense of ownership and personal responsibility, tax leaders can motivate teams to embrace continuous learning opportunities. Companies that leverage technology to upskill tax teams will enhance talent mobility, foster a continuous learning culture, and sustain a future-ready workforce.
The long-term benefits of upskilling your tax teams
Upskilling tax teams leads to lasting benefits for the tax function and overall business. With a skilled and empowered workforce, organizations can more readily adapt as the tax landscape evolves. Here are some key benefits of upskilling tax teams:
Regular upskilling ensures that tax professionals continually expand their skillsets, enabling them to adapt as tax processes evolve and new technologies emerge. This creates a workforce that is agile, adaptable, and differentiated from competitors.
Upskilling initiatives foster a culture of learning and growth, which leads to higher levels of engagement and commitment among employees. This, in turn, makes it easier to introduce and implement new initiatives and strategies.
Offering career growth and investing in employee development makes a company more appealing to top talent. By making these investments, tax leaders can attract strategic thinkers seeking advancement while retaining high performers.
An empowered and upskilled tax team provides a superior client experience. They can effectively communicate complex tax issues in a clear and concise manner, tailoring their guidance to the specific needs of clients. This facilitates collaboration, builds trust, and ultimately leads to higher client satisfaction.
Investing in the development of tax teams can create a competitive advantage, drive innovation, and deliver value to both internal and external stakeholders. The long-term benefits of a skilled and empowered workforce extend beyond the tax function, positively impacting the overall business performance.
How BDO is fostering a culture of continuous learning and development
At BDO Canada, fostering a culture of innovation, learning, and development is a top priority and a powerful differentiator that’s integral to our firm’s strategy. Embracing the transformative potential of technology, BDO has taken a proactive stance, placing a particular emphasis on AI-powered technology. Through our strategic partnership with Microsoft, we secured early access to Microsoft Copilot, enabling our teams to harness cutting-edge technology and improve the quality of their output. Additionally, our digital learning platform allows our people to access learning content anywhere and anytime, empowering them to stay ahead in the rapidly evolving business landscape.
A proactive approach to upskilling and adapting is non-negotiable for tax professionals. With the relentless expansion of regulatory demands and technology, staying ahead of the curve is crucial. BDO's International Tax professionals are well-equipped to offer invaluable insights and solutions to navigate the complexities of the global tax environment.
The information in this publication is current as of May 21, 2024.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.