The demand for new competencies has created a so-called talent expectations gap, the disconnect between what businesses expect from their workforce and the skills and capabilities that are available in the marketplace.
Tax professionals today need a much broader skill set than was necessary in the past. This new reality has profound implications for tax education around the world.
The demand of universities, says Byrnes, is, “How are you going to give us that staff member of the future?”
Although he says most universities are considering how to adapt their programs to the future needs of students and employers, it is easier to talk about change than actually bring it about.
Shaking up the ivory tower
Universities can’t afford to ignore the evolution of the tax profession.
According to a 2015 report by the Institute of Management Accountants (IMA), which launched a Competency Crisis website to deal with the talent gap in 2013, 90% of North American organizations cannot find the entry-level management accounting and finance talent they need.
The educational curriculum isn’t keeping up with the needs of business, and employers expect more advanced skills at entry level, according to the report.
This includes more than just technical skills. Managers surveyed in the report say that “entry-level professionals need leadership capabilities from day one in the workforce.”
Texas A&M University is among the pioneers of change in tax education. In 2013, the State of Texas not only established a new law school at the university but also gave it carte blanche to create a new education model.
A risk management approach to tax means that the new model will by definition be multidisciplinary.
Financial and managerial accounting-- and law-- will still be important, of course.
But students will also need new “hard” skills involving big data and communications technologies and “soft” skills geared to working in multicultural settings both at home and abroad.
Employers expect entry-level employees to arrive with these skills already developed. Says Byrnes, “You don’t want to have people who are living in the ‘Stone Age’ (pre-2015) trying to work in a 2016-onward world.”
Educating tax leaders in Europe
In Europe, the lack of any academic infrastructure at all for tax education and research spurred the creation of the EY-sponsored Eucotax Wintercourse program in 1992.
The course boasts 13 partner countries (12 from Europe, along with the US) and 15 universities. It promotes teamwork by emphasizing intense, small group interaction with a focus on a particularly relevant theme.
In 2015, for instance, the theme was the digital economy, which “allowed students to address a wide variety of tax issues in their papers, whether that was VAT, permanent establishment, transfer pricing and so forth, because the digital economy is having such a broad impact on tax,” says Eric Kemmeren, Professor of International Taxation and International Tax Law at Tilburg University in the Netherlands.
Kemmeren is one of the coordinating professors of the Eucotax course. Students examine these issues across tax systems, identifying similarities, differences, problems and solutions from the perspective of, say, European law, international tax law and economics.
“We believe we are educating the leaders of the future,” says Kemmeren.
A key part of that education is appreciation of different backgrounds and approaches, not only between academia and business but also among people from different parts of the world. Eventually, the program hopes to expand to Latin America, Asia and Africa.
Leading the way in Africa
Initial efforts to revamp tax training in Africa are already underway through the Global Business School Network (GBSN). Established in 2003, the program addresses talent shortages in the developing world.
Africa is interesting for a number of reasons, says Stephan Kuhn, an advisor to the GBSN. It’s big. It’s complex. And some African countries are among the fastest growing economies globally. But it lacks quality management training.
“There is a clear correlation between the prosperity of an economy and the quality of management,” says Kuhn.
Which is where the GBSN comes in. The GBSN is a network of 75 leading business schools committed to building skilled management talent in the developing world.
Kuhn’s own mission was to bring the same multidisciplinary, practical approach being advocated in the US and Europe to Africa. The next step is to tailor the offerings to Africa.
“While Africa has a tax-technical landscape that is different from Western Europe or America, and it’s important to understand this,” says Kuhn, “equally as important are nontechnical skills: communication, connecting with and understanding business strategy, project and change management, negotiation and so forth.”
Case studies are an important tool in this regard — but case studies based on the challenges and experiences of businesses in Africa, not on those from other parts of the world.
A lack of comprehensive, multidisciplinary tax programs is not just an issue in Africa.
Very few universities anywhere offer such programs, says Kuhn.
That’s why at home, in Switzerland, he has set up tax courses at the University of St. Gallen to provide students with real, hands-on experience in tackling issues such as mergers and acquisitions, transfer pricing, tax evasion and accounting and compliance.
Indeed, says Eucotax’s Eric Kemmeren, the entire emphasis is away from students who just sit and listen. “We want students to actively participate in the lectures and case studies and to debate the issues.”
Organizations also have a role to play, according to Byrnes of Texas A&M. Employers need to sit down with the academic deans of their feeder schools and make clear the competencies they want to see in the staff they are looking to hire.
A curriculum designed to match actual practice — based on real-world problem solving, group discussion and teamwork — is much harder for professors to develop and execute, acknowledges Byrnes.
Nonetheless, he says, “This is the method that we have presented to big firms who require practice-ready staff able to address the future tax practice, and it resonated.”
Key action points
- Determine the skill sets — e.g., understand the supply chain, big data, intellectual property — that you require for the future.
- Communicate those requirements to the deans of the schools your company draws from and ask them how they will meet those needs.
- Contribute to universities by helping to develop courses and providing good, practical case studies for students to learn from.
- Focus on providing appropriate, multidisciplinary training to your employees that will equip them with the skills they need to excel in current and future positions.
Giving young tax professionals a chance
When Elaine Yi Long, a third-year undergraduate at Central University of Finance and Economics in Beijing, was preparing for EY’s Young Tax Professional of the Year 2015 competition, her coach offered to help polish Elaine’s English-speaking skills. How?
Elaine would give a one-hour presentation on Chinese-controlled foreign companies rules to EY’s International Tax Services group. Elaine was nervous about having to speak in front of so many people. “But I did!” she says.
The exercise paid off: EY named Elaine Young Tax Professional of the Year 2015 in December in Amsterdam.
There are fewer opportunities for Chinese young talent in taxation than in accounting, Elaine says, which is why Young Tax Professional of the Year is so important. After she graduates, Elaine hopes either to pursue a master’s degree in international taxation or to go into tax practice.