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Finally! Another tax year [mostly] behind us!


I've been trying to get this newsletter sent out and I thought what better time than the end of the fall busy season! The long awaited 10/15 deadline has finally arrived!! It's the time of year when you get to restock the fridge, catch up on laundry and reintroduce yourself to your partner and kids....just in time for the holidays. This time also marks the beginning of our busy season at OTR - the 4th quarter hiring frenzy.

My inability to get a newsletter out before this has been the result of how damn busy we've been. I feel like we're working twice as hard for the same amount of success we had in 2019. Recruiting is simple but it isn't easy. I also feel like I'm still trudging through some Covid related apathy. The same apathy which has been part of quiet quitting. Enough of my personal sh!t, let's talk about what we are all experiencing.

The economy and job market are more than a bit perplexing right now and in some ways seem to be held together by chewing gum and bailing wire. "Officially" I think we are in a recession. Regardless of the technical definition of recession, I think most people would agree that we seem to be in the early stages of an economic slowdown. I know this consumer's confidence is down. Yet, unemployment is near historic lows and the quit rate (as measured by the BLS) is near an all time high. People are leaving jobs for more money, remote work, to make a full-time career out of a side hustle or one of many other reasons. Normally, recession fears would cause a slowdown in job changes and tighter reigns on salary increases. But that ain't what's been happening. I can speculate on why, but that's not my expertise. Instead, I'd like to talk about the two biggest factors driving recruiting and retention right now - salary and remote work.



Given the labor shortages we are experiencing (large sections of restaurants closed due to lack of servers, partners doing managers' work), it's no wonder that wages have increased. After the initial knee-jerk reaction that employers had to Covid, there has been a war for talent worldwide. When I flew on a German airline this summer, the pilot talked of baggage handler shortages and when I booked a boat trip in Dubrovnik with a small tour operator, they also talked about their lack of staff. As a kid, I was led to believe that overpopulation was going to be our possible demise. It seems we may have overcorrected.

Regardless of whether or not I think tax salaries needed to increase, I have wondered if there was a stopping point to these increases. And what that stopping-point might look like. Fortunately, for some, we have turned the corner and salary increases are slowing down. That doesn't mean job seekers aren't going to ask for more money or that employers won't get into a bidding war to fill crucial positions; but rather, employers may not have to adjust salaries every 6 months over fear of falling behind.

I keep reminding people that we were in a tight labor market before Covid. It's not like everyone went home in March of 2020 and just can't seem to pull themselves together enough to get off the couch. The pandemic just seems to have sped up what was inevitable. A market where we don't have enough employable people. What makes it particularly tough for the tax profession, is that a lot of young people seem to like fresh and sexy when it comes to their career. And for most young people tax and fresh/sexy are at opposite ends of the spectrum. I think the tax profession needs to hire a new PR agency or think about rebranding. Maybe get one of the Kardashians on the cover of The Journal of Accountancy or elect a young TikTok influencer to the national TEI board to help increase the flow of people into the profession.

The labor shortage in the tax profession is real. And it's not an issue limited to tax. There is no quick fix. The development and use of new technology, the use of cheaper labor in foreign countries and the dumbing down of the tax compliance process may be some of the answers. This is something that is evolving and outside my expertise.

I plan to send out our annual salary newsletter by mid November. As a preview, I can tell you this: base salaries and other forms of cash compensation have increased at a record pace the past 22 months. Although I think we've turned the corner and are seeing things plateau, it's a bit too early to know for sure. Q4 will tell us a lot as we see what happens during this historically high period of hiring. It's worth pointing out that the most significant wage increases have occurred at the lower end of the experience scale. Recent graduates up to tax professionals with about 6 years of experience have enjoyed the largest increase in compensation. Candidates with 15+ years in the profession have seen an uptick, but not with the same fiery as their junior counterparts. Also, the bidding war and associate salary increases have been more pervasive in the public accounting sector and less so in industry.



When I started my career in recruiting, there were two indelible factors that really drove which positions a candidate might be interested in. One was money. The other was location. Most other factors were what I refer to as fluff - although they were important, candidates were more willing to compromise on these factors. In todays market, as more companies have moved to remote work, location doesn't have the same level of importance. But not all employers are excited or adept at hiring and managing a remote or hybrid workforce.
Can anyone confirm that the Big 4s' decisions not to require employees to come into the office, was based largely on fear of losing more people? If that's true - I understand their concern. I have witnessed, firsthand, the slow drain of employees these firms are experiencing. And, sadly, turnover begets turnover. Not only is the workload spread to fewer people, but there is a FOMO or copycat effect that happens.
Two and a half years ago I never asked a candidate how they felt about being in-office full time. That's not to say, people didn't want remote work or that it didn't come up in the conversation, but I just expected that everyone was prepared to go into the office all of the time. Unless they were one of the lucky few that had some type of unicorn job or crazy tech company employer. Now, it's only about 20-30% of the candidates I talk to that are OK with going into the office full time. Of the remaining 70-80%, about 2/3rds are OK with a hybrid situation and the other 1/3rd want fully remote. Of the 2/3rds of employees that are OK with hybrid, we are being very specific about which days and how many days they will work in office. An employer offering 3 days of remote work trumps someone offering only 2 days of remote work.

As with compensation, I try not to label what employees are looking for as good or bad. As an employer and a recruiter, I hear and understand most sides of the issue. The reality is, though, if an organization requires people to be in the office full time, their pool of possible employees, in an already tight market, is smaller. And, inversely, if you are open to hiring people that can work remotely, in theory you have the whole world of qualified candidates to choose from. Looking at this from a different perspective, if you're a job seeker looking only at positions that are fully remote, you are competing with a large pool of people and only seeing a small portion of available jobs. Conversely, if you are looking at all open positions, including fully in-office, you have a much larger selection of opportunities to consider.

While the location of where work is being done continues to evolve, in the short run the tight labor market favors employees. And at present, employees seem to prefer having the option to work remotely at least part of the time. I realize employers feel like this new way of doing things was kind of thrust upon them, but pretending it will go away or that they have such a great work environment that their employees don't really want to work from home, is wishful thinking at best. Like most healthy relationships, I think talking about it is probably the best thing to do. Change is hard and this change isn't something we saw coming. But, change has also been the doorway to lots of great opportunity. Instead of letting change be something that causes you to panic try to see it as your chance to be a leader.


I don't think I say often enough how much I appreciate all of the nice comments and input I get from those of you that read my newsletter or have worked with Oxford Tax Recruiting in one way or another. We are blessed and very thankful to the tax community. We appreciate ya!

Jay 1-21 Cropped

To your continued success,


Jay McCauley
Executive Recruiter

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