Future of work: The state of the food industry

The commitment to employee health and well-being should start in the C-suite

Justin Cook

Justin Cook

United States

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Future of work: The state of the food industry

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Key messages

  • Under pressure from talent shortages and regulatory complexity, tax departments in investment management firms can end up spending a significant amount of their technology and talent resources to manage complex operational activities. Not only does this result in the development of suboptimal incremental solutions leading to inefficiencies, but also failure to deliver a sustainable solution for the future.
  • Tax departments have an opportunity to make strategic operational changes to save costs and repurpose resources—from managing critical operational tasks to performing tasks that drive differentiation, such as strategic planning, tactical business advisory support, and management insights. Our analysis predicts that tax departments can save as much as 23% to 31% of their total cost through better employee utilization, process efficiencies, hiring and replacement cost savings, technology, and other synergies accrued from the consolidation of operations to a single service partner.
  • Leading practices that can help address third-party risk management requirements for implementing tax operating model changes include elements of governance and talent planning such as establishing communication channels and retaining the right talent.
  • These strategic tax operating model changes do not represent a universal solution as every firm has different requirements and faces unique challenges. Optimal operating transformation plans should consider employee transition, enhanced career opportunities for employees, and a long-term road map for cost savings.
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Changing tax landscape and its growing complexity for tax departments

Talent shortages and regulatory complexity contribute strongly to the mounting pressures on tax departments. The complexity has grown across four dimensions: maintaining optimal talent levels, managing global interdependency, increasing regulations, and digitization of tax reporting. Complex operational activities are consuming an increasing amount of technology and talent resources afforded to tax departments, often leading to stop-gap solutions that can create inefficiencies while failing to deliver a sustainable solution for the future.

Talent constraints

A supply gap for talent in the field of taxation is on the horizon. According to Bloomberg Tax 2021 Corporate Tax Department survey, 70% of US survey respondents across industries somewhat or strongly agreed that corporate tax departments were under-resourced, indicating high demand for tax talent.1 However, the number of CPA candidates and the number of accounting, taxation, and related degrees awarded has declined over the last several years.2 Furthermore, the percentage of accounting professionals in the age group of 55 years or above—professionals expected to retire in the next five to 10 years—is higher than the percentage of professionals in the age group of 45 to 54 years—the group expected to take on the responsibilities of retiring professionals—indicating an aging workforce.3 These factors point to a supply-demand gap for accounting and tax professionals, making hiring and retaining talent increasingly difficult.

Strategic operating model changes can help firms balance cost constraints with talent and technology needs

Filing frequent, digitized, and granular reports and managing the impact of higher global complexities and an evolving regulatory landscape require considerable investment in talent and technology. Tax operating model changes can help firms fill the technology and skills gap and simultaneously realize cost savings.

Technology can help firms more efficiently tackle the highly resource-intensive tax compliance process. It also needs to be agile and scalable to handle the frequent changes in the complex tax ecosystem. Although tax may be a critical function for operations, finance leadership may prefer to allocate resources to functions that contribute more directly to customer success. According to a cross-industry survey, lack of resources and budget top the list of reasons for respondents’ underutilization of technology in tax operations.4 Strategic changes to the tax department's operations can help firms mitigate the costly and burdensome exercise of continuously upgrading technology systems by leveraging the services of an external service provider.

Some companies now expect tax functions to contribute more strategically as they accelerate digital transformation. According to a Deloitte survey, 67% of respondents from the financial services industry expect increased demand for tax advisory support for digital business models.5 To keep up with evolving responsibilities, firms may also need to upskill talent as tax professionals of the future could require a very diverse skill set. The diverse skills required are expected to include global project management, data management, technology application, process optimization, and strategic business advisory. Strategic outsourcing can relieve the firm's tax department from talent hiring, retaining, and upskilling responsibilities and allow the retained employees to focus on oversight and higher value-add items.

"A finely tuned combination of horizontal and vertical communication channels can help establish effective oversight over strategic changes in operating model." — Dave Earley, partner, Deloitte Tax LLP

With most of the automation, CoE’s efforts focused on high-value automations. Soon organisations will face another problem: the extensive list of lower-value, task-based opportunities. This is precisely where the superpower of the CLD model lies, and the rise of low-code and easy-to-use RPA technologies enables the democratisation of automation. These tools and a CLD model can enable the lower-value opportunities that are important to individuals to be addressed, while not distracting the CoE.

  1. Lisa Fitzpatrick, “2021 Corporate Tax Survey,” Bloomberg Tax, 2022.

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  2. Lisa Fitzpatrick, “2021 Corporate Tax Survey,” Bloomberg Tax, 2022.

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  3. Lisa Fitzpatrick, “2021 Corporate Tax Survey,” Bloomberg Tax, 2022.

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  4. Lisa Fitzpatrick, “2021 Corporate Tax Survey,” Bloomberg Tax, 2022.

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  5. Lisa Fitzpatrick, “2021 Corporate Tax Survey,” Bloomberg Tax, 2022.

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  6. Lisa Fitzpatrick, “2021 Corporate Tax Survey,” Bloomberg Tax, 2022.

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Authors Mohak Bhuta and Doug Dannemiller wish to thank the following Deloitte professionals for their insights and contributions: Phil Giuca, Andrew Gwyther, Amy Rogowski, Julia Cloud, Ellen Turi, Maryna Turkova, Deanna Lamirata, David Charlton, John Seabrook, as well as their Deloitte Center for Financial Services colleagues Jim Eckenrode, Patricia Danielecki, Sean Collins, Alice Hartnett, Seth Raskin, Paul Kaiser, and Sophie Lees.

Cover image by: Natalie Pfaff

ROBOTIC & INTELLIGENT AUTOMATION

The robotic process automation (RPA) market has been growing rapidly over the past few years. RPA in its purest form, however, is just the beginning, as cognitive capabilities are also being integrated with RPA, enabling machines to perform tasks normally reserved for human intelligence.

Justin Cook

Justin Cook

US Consumer Products Research Leader
+1 617 437 2071

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