2020 – what can you say? Not a good year for the Broncos. And that pandemic – now that was unexpected. To quote the great American poet and philosopher, Jerry Garcia, “what a long strange trip”. I don’t know about you, but I was innocently hoping to wake up on January 1st of this year and somehow magically have been carried back to a world where masks are something we wear on Halloween and political and social unrest was something we heard about in faraway places. However, as of today; inauguration day 2021, things are still weird and the ground shaky. But I am hopeful. Since I am no more a behaviorist or economist than a future Olympian, I’ll tell you what I know about the job market and some trends in employment for tax professionals in Colorado.
As you may recall, 2020 started off with the normal rush of public accounting firms putting the finishing touches on their hiring and people psyching themselves up for another busy season and corporate tax groups starting to knuckle down for their year-end work. It was looking like we were going to have another robust year of economic growth and development and historically low unemployment. And then BAM! COVID-19 took over the conversation like a hurricane. Ski areas suspended operations, schools closed, the lines at the liquor stores and dispensaries grew and we were told to stay home. On March 20, Treasury Secretary Mnuchin announced that they were moving tax day to July 15th. Right, Wrong or Indifferent, I decided to continue coming into the office. When I was able to pull myself away from watching newsbytes on YouTube and reading posts on other social media, I would do my job….talking to clients and candidates about what they were feeling and seeing. Hiring slowed way down, in part due to deliberate decisions companies were making so see how things were going to play out, but also in part because of the logistical issues associated with people working from home and maybe also getting caught up with obsessive news intake. It was late March when I heard about the first furloughs and layoffs affecting tax people. It started with some of the middle market firms and quickly included Big 4 and other national firms and then local and small regional firms. It also included some corporate tax groups, but to a much smaller extent.
Over the next several months there were some more layoffs but also some furloughed people were brought back to work. For some, salaries were cut, bonuses cancelled and promotions delayed. Public accounting firms found themselves busy with CARES Act and PPP activity and most corporate tax departments were operating with a ”business as usual” air. From my end, hiring activity was slower but not dead. The process was taking longer, though, as companies dragged out hiring decisions and candidates became weary of leaving their “sure thing”. What was also interesting about this time, the market wasn’t flooded with unemployed tax people looking for work. Those that did lose their job quickly were absorbed by another employer, decided that tax wasn’t their thing and pivoted or were enjoying the juicy, hyped up benefits being offered through unemployment. Overall, I would say hiring activity over the summer was down by about 10-15% for corporate tax departments and 25-30% for experienced hires with public accounting firms. I also noticed a larger pool of interns not being offered employment and scrambling to find a home.
As we entered the end of the 3rd quarter and through the 4th quarter hiring activity was definitely picking back up, especially in public accounting. As someone that enjoys the flurry of hiring that public accounting firms do in the 4th quarter, I was worried what the end of 2020 might look like. As it turns out, my concerns were wasted time. From my vantage point, the same disparity between supply and demand for good tax people to work in public accounting, didn’t change much from previous years. Yeah, some firms lost clients and some industries were hit hard, but the extra work that came from helping businesses navigate changing conditions and take advantage of relief being offered by all levels of government, more than made up for any lost clients.
2020 was a year where I could pick up the phone and have a pretty good chance of getting someone to answer. My call to connection ratio went from about 2/10 to close to 8/10. People were at home and unencumbered by meetings and the fear of taking a recruiter’s call. I also noticed a larger than usual number of people getting out of tax. 2020 was a brutal year for everyone, especially tax professionals. Typical post busy season trips were cancelled and the workload never seemed to slow down. If you were on the fence about making a career in tax, the “busy season that never ended” probably pushed you over the edge.
As of today, the IRS said there is no intent to push the March and April deadlines back. Hiring activity in public accounting is slowing way down as is usual this time of year and corporate hiring is probably down by about 20% from the previous few years. Some people remain tentative about making a job change, which reduces the pool of candidates and actually reduces the competitive nature of the job market. And while I understand the concern about being Last In and First Out (LIFO), there are no guarantees that companies won’t cherry pick or have another method for choosing who stays and who goes. Unemployment across all sectors in Colorado is at 6.4%. I would guess for tax people that translates into about 1 to 2%. Salaries are pretty similar to what we saw last year at this time. No surprise since many firms and companies didn’t offer annual pay increases and even delayed salary increases associated with promotions. One quick note, we are going to be sending out a salary survey in the next week and I would appreciate your participation. It will be short and confidential and the aggregate results will be published in the next newsletter.
So, as of today, the job market for tax professionals is good, although not as strong as it was a year ago. The big unknown is what happens when the Treasury stops their printing presses and the stimulus and relief money runs dry. As always, I will continue to monitor what’s going on in the market. Overall, I believe tax people have good prospects for future employment and advancement opportunities. At least until the meteor hits.
To your continued success,
Executive Recruiter, Oxford Tax Recruiting