Why Corporate Tax Careers Are Splitting into Two Distinct Paths

For decades, corporate tax careers followed a stable and linear path. Top performers could expect to climb from compliance specialist to generalist manager, eventually reaching the director or VP level.

However, recent shifts in global regulation and the prioritization of digital transformation have made the traditional career ladder a thing of the past.

Now we’re seeing tax careers splitting into two divergent tracks. It’s important to understand this new paradigm and how it might impact your company’s tax leadership strategy. Here’s a look at why corporate tax careers are splitting into two distinct paths.

The Evolution of Corporate Tax Careers

It used to be that the ideal tax professional was a jack-of-all-trades. They were expected to manage the tax calendar, file returns, understand the basics of ERP, and offer occasional strategic advice. For the most part, success was defined by avoiding tax risks and displaying industry-specific knowledge.

But as global tax laws became more byzantine, and the volume of data most businesses have exploded, the generalist model started to lose its usefulness. No single person can master the complexities of international tax law and the intricacies of data analytics simultaneously. 

It’s these developments that split corporate tax careers into two distinct paths: the data people and the strategists. 

Path 1: The Technology-Driven Tax Professionals

Tax pros who choose the technology path have several specialization options. For example, some might become experts in AI, automation, and the integration of various data sources. Those who follow this track are less concerned with the nuances of tax theory and more focused on how data flows from ERP into their tax compliance system and other apps.

Others on this path fully embrace the technology and become a hybrid — part CPA, part data scientist. They speak the language of SQL, Python, and Alteryx. This new breed of tax pro focused on automating repetitive compliance tasks and validating the accuracy of their financial data.

Whichever sub-path they choose, the technology-driven tax professional strives for efficiency and near-perfect accuracy. Their overarching goal is to reduce manual data entry and ensure their company’s regulatory compliance is bulletproof.

Path 2: The Strategic Tax Advisors

On the other path, you have the strategists. Whereas the technology specialists handle the “what” (the numbers), these pros focus on the “why” and the “what’s next.” Think of them as internal consultants, as they interpret how geopolitics and constantly shifting regulations will impact the company’s bottom line.

Success on this path requires deep tax knowledge and mastery of soft skills such as negotiation and persuasion. Therefore, this path attracts those who excel at interpreting the gray areas of the law and structuring complex transactions, such as M&A or supply chain reorganizations.

More so than their colleagues on the other path, the advisors typically have a seat at the decision-making table. They collaborate with the C-suite and cross-functional teams (often legal, HR, and operations) to ensure their company treats tax as a driver of business value rather than an afterthought.

The Implications for Talent Acquisition and Development

Obviously, this split will have a significant impact on your tax leadership strategy. However, since this is new territory, it’s not always clear how it impacts your company or how you should proceed.

The biggest mistake you and fellow leaders can make is to search for unicorns — candidates who are both elite data architects and strategic partners. This type of talent does exist, but they’re hard to find. On the off chance you do locate someone successfully navigating both paths, their salary requirements can be prohibitively high. 

Instead of chasing unicorns, focus on what you can do now. Step one is adjusting your job descriptions to reflect the new and divergent career paths. Recruit data specialists who can work with your tech foundation, along with the strategic advisors who can guide your C-suite. These types of doable tasks align with broader professional services talent trends that favor specialists over generalists.

A Seismic Shift, Not a Temporary Trend

The split in corporate tax careers is no temporary trend, so don’t fight it. Ultimately, the divergence between tech specialists and internal advisors is a good thing. It’s best to adapt your tax leadership strategy rather than trying to find that one special candidate who can walk both paths at once.

For more insights into business trends across a wide range of industries, follow MRINetwork.