Change is inevitable. In this digital age, we need to embrace change more rapidly than ever before. On our recent Tax Function of the Future webcast, Tax Professional Upskilling - Attracting and Developing Your Workforce in Digital World, we explored how various external factors — technological, demographic, tax regulatory and legislative, and social — are causing workforce disruption. The result — a need for change. The first step in this transformation process is to understand what skills the Tax function needs — both for today and tomorrow. It is impossible to hire all the talent needed to manage today’s tax complexity. New skills are required to maintain current roles or shift into new ones. Upskilling the workforce to leverage currently available technology tools is key to achieving and sustaining success.
Digitization and automation — such as artificial intelligence, robotics, and other technologies — are fundamentally transforming the way businesses operate and are offering new ways to create value. Additionally, Tax functions are expected to do more with less while complying with increased reporting and transparency requirements (e.g. US tax reform and OECD’s BEPS CbCR requirements). The adoption of these technologies and the increased demands by tax authorities are causing a disruption in the workforce and significantly impacting how the Tax Function operates. Roles are being defined to include aspects of technology that can streamline time consuming tasks and facilitate new complex tax requirements. So — what can Tax do to adapt to these environmental changes?
Tax Functions can begin by evaluating and understanding what skills are needed — today and in the future — to be successful. They then can examine their current workforce capabilities. Are changes required to improve how the function operates? Is there a need for new or modified roles within Tax based on the new technology and process changes?
The adoption of ‘smart’ technology solutions, such as robotics and artificial intelligence (AI), does not diminish the Tax professional’s ‘tax-technical’ expertise. Instead, emerging technologies provide opportunities to enhance strategic value. Tax needs the ability to quickly assess the impact of legislative changes, using data analytics and modeling solutions. Automation of source data pulls can also help streamline the requirements of new complex calculations. As such, Tax professionals will need training to adapt to the new environment where workers and ‘machines’ work seamlessly together.
‘Upskilling’ refers to the process of learning or teaching workers new skills. Why is this important? The answer is simple — ‘Tech-savvy’ professionals with the requisite tax-technical knowledge are hard to find. And, businesses are interested in the retention and long-term success of its existing workforce with institutional knowledge and organizational loyalty.
Tax functions must invest in people and culture in order for strategic investments in digital technologies to live up to their potential and to be able to comply with increased regulatory demands. As such, Tax should structure their people plan based on business objectives and with digital technology and regulatory compliance goals at the heart of their plan.
Tax professionals should understand the Tax people strategy and (1) seek new opportunities by understanding how Tax work is changing (i.e, today’s tax environment requires that Tax professionals embrace new technology/digital skillsets), (2) identify and become educated on tax analytics solutions that enhance strategic value and, (3) identify processes (such as tax compliance and reporting) that can be redesigned leveraging technology automation and build required technology skillsets.