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Is tax managed services the right answer to digitally upskilling your tax team?

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Doug Thomas Insourced Solutions for Tax Leader, PwC US

Whatever your tax function’s top initiative is right now, there’s one thing I feel sure of: Your success will depend on your people. You not only need tax professionals who are talented and  engaged with their work, but also proficient in the latest tax technical regulations and tax technology.

It’s challenging to build and maintain a tax workforce that fulfills your needs in all of these areas. That’s why, in some cases, it might be best for your organization — and for your tax professionals — to try something different.

Let me explain what I mean.

Roles in the tax function are increasingly reliant on technology. Tax departments are expected to construct and navigate a digital strategy that ranges from small automation to enhanced analytics and artificial intelligence. As technologies spread throughout tax organizations, tax teams need both tax technical and digital skills to drive a lasting transformation for the organization.

Some tax functions have the resources to roll out real-time training and foster a culture of continuous learning. Some are digitally transforming their workforce, giving employees the tools to put analytics, data visualization, and automation to work. For example, in the US, PwC is  focused on digitally upskilling all of our workforce. Digital Academies offer hands-on learning, and our Digital Fitness app provides upskilling on the go. The Digital Accelerator program allows a number of our employees to focus solely on transforming how we work and serve our clients, while the PwC Lab, available to all employees, is where we share and consume technologies developed and used in our day-to-day innovation.

However, we are finding that many tax functions are struggling to keep pace with the continuing array of advanced technologies available in the market, as well as to provide training needed to enable workers to take advantage of these technologies. As a result, their tax professionals may be falling behind on digital readiness — and they know it.

One thing is clear: Tax professionals are at the forefront of change. They must embrace innovation and remain agile to keep pace with changing regulations and technologies impacting their work on a daily basis. Their workplace must provide training and development opportunities to help them adapt to a tech-driven workplace, where people and machines work together seamlessly.

People as a driver for tax managed services

Several finance and tax leaders I’ve worked with have acknowledged that digital upskilling and career progression opportunities are challenging to achieve in their current model. That’s why even the largest tax departments are taking advantage of a new approach, one in which they transfer the majority of their workforce to a tax managed services delivery model.

I’m not talking about outsourcing: handing over non-strategic parts of the tax function’s work to an outside organization, where the professionals may not have in-depth knowledge of your company’s tax needs. Instead, I’m talking about insourcing, where key tax employees join an organization whose core business is tax. There, these professionals continue to work primarily on your company’s tax needs, while having access to the specialized skills, technology, and a globally connected network of colleagues that a tax-focused provider can offer.

Adding up the benefits for your people

I’ve discussed elsewhere the benefits of insourcing: cost-effectiveness, advanced technology, a shift in people management responsibilities, and improved focus on the core business. Now I’d like to talk about the benefits for your people, the tax professionals who have worked tirelessly with you for years.

When your tax professionals move to a company where the core mission is taxes and the tax function is a core competency of the business, their development and progression become a top priority. They have access to the latest technology and upskilling opportunities, boosting their career and development prospects. Understanding that career development includes providing opportunity to work with similarly situated organizations, a pillar of the insourcing model is to maintain the connection between the newly onboarded tax professionals and their former employer, further cultivating established relationships and in-depth knowledge. This supports a seamless transition for both the company and the people to the new tax model.

Finally, since moving to the insourcing provider is voluntary on the part of the tax professionals, the insourced provider will want to thoroughly understand their career goals, offer well-defined opportunities for advancement, provide supportive training and upskilling, and have a robust onboarding program. We’ve found that the tax professionals we’ve onboarded into our tax managed services group, Insourced Solutions for Tax, are excited by new experiences available to them. They’ve told us that their work provides the right balance of challenges and rewards.

Making the best choice for your company

Now, even though I expect insourcing to grow in the coming years, I know that it’s not the right move for every tax organization — or for every individual within that tax function. Some companies will choose a different approach: building a tax function of the future in-house.

However, many companies don’t have the capabilities, budget, or desire to transform their tax function. These organizations may find that insourcing tax services is the best choice for them — and for their people.

If that’s the case for your company, we’re here to help.



Contact us

Doug Thomas

Doug Thomas

Insourced Solutions for Tax Leader, PwC US

Rick D'Avino

Rick D'Avino

Chair, Insourced Solutions for Tax, PwC US

Bob Malitz

Bob Malitz

Global Client Solutions Delivery Leader, Insourced Solutions for Tax, PwC US

Chris Yeaton

Chris Yeaton

Partner, Insourced Solutions for Tax, PwC US

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