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Due to a mass wave of retirements, we anticipate the shrinking pool of ageing, in-house tax executives to create a recruitment crisis within the next few years.

Approximately 64% of current heads of tax are aged 55 and older. Further, 52% of other senior level tax professionals, presumably in line to step into leadership roles, are 55 years of age or older. Over the last five years, corporate in-house tax departments have gradually started feeling the effects of this ageing demographic. We are anticipating that in 2019 through to 2024, potentially more than one-third of the current heads of tax are to retire or leave their positions.

Additionally, the tax industry faces an even bigger dilemma, as those in secondary positions are also nearing retirement. Because of the talent drain that is going to be created, there will be a high demand for tax professionals who are willing, and able, to step into leadership roles. It is imperative that companies recognise that Baby Boomers must be kept around in some capacity as Gen Xer’s are going to need help transitioning and leading tax departments. While the majority of Baby Boomers will not want to move back into fulltime roles, they can take advantage of the “just-in-time” labour market, which will allow them to take on select, expertise-focused, short-term contract opportunities.

While the demographic issue could wreak havoc on the tax industry, with proper planning, companies can expect a smooth transition. This can be accomplished in a few ways. First and most importantly, focus on succession planning. It is critical to identify talent not only at the Gen X level but in the Millennial and Gen Z groups as well. Additionally, you need to know that Gen Xer’s are going to be extremely hard to hold on to, as other companies will be looking for them to fill their critical upper-level tax positions. Our advice is to retain as many of these Gen Xer’s as long as you can.

This data referenced in this article has been sourced in partnership with TaxTalent.