After thirty years and more than one thousand tax executive searches, we have learned quite a few lessons in the tax executive search profession. This article is about the lessons we have learned repeatedly. By learning these lessons in advance, you will benefit from this knowledge on your next tax executive search. As CFOs work to contain costs at multinational organizations, they often minimize recruiting fees in their tax department budgets. This is a costly mistake in the long run because doing so companies block their access to an extraordinary pool of tax professional talent that will not submit their resume to an online ad or a company portal. The reason is tax professionals desire greater privacy when considering a new tax opportunity. This hidden population of tax executive candidates can only be introduced the old fashioned way, by retaining a tax recruiter to cold call hundreds of tax executives about your tax opportunity. There is a significant difference in the talent pool available to a company when they retain a recruiter to go out and conduct a thorough search of the marketplace for talented tax candidates.
There is a positive impact on an organization who chooses to conduct a thorough search by an experienced tax recruiter, versus conducting a search on your own. There is a difference in tax savings to an organization whenever they invest in attracting the best of the tax profession to their tax organization. Investing in your tax team will have a positive financial impact on your company. The CFOs I have worked with over the years who treat their tax executives like Gods and Goddesses know their inhouse tax teams are saving millions(billions) of dollars to the company bottom line every year or over a ten year period. One tax executive I know came up with more than one billion in savings over a ten year period on an IP strategy. The company would have been charged over one billion US tax dollars by the country tax revenue authorities over ten years if they had overlooked this tax savings opportunity. CFOs supporting their tax leaders with the staff and budget they need to operate proactively are knocking it out of the ballpark with tax strategy home runs. However, management needs to support their inhouse tax team to produce a treasure chest of tax savings opportunities for the company. The idiom “penny-wise, pound foolish” is often used to describe something that is done to save a small amount of money now but will cost a large amount of money in the future.” This idiom is the best way to describe the difference between retaining an experienced tax recruiter or conducting a tax executive search on your own.
Conducting A Tax Executive Search On Your Own
Conducting a thorough tax executive search on your own is a time-consuming process. Your focus in on tax candidates who are introduced to you through an online ad sourced by your in-house human resources department or referrals from friends in another corporation, public accounting and law firms. Note to hiring authorities, the high performing tax professionals you are introduced to by firms are those the firms will do everything in their power to keep themselves. It is in the firms best interest to keep their A players happy because the firm Partners will bill out more in fees with top talent on staff. A valuable tax recruiter will uncover the talent you will never be referred. The talented tax professional may even be working on your account but is afraid to come forward but they will have the conversation with a tax recruiter who can privately approach the company about their candidacy. I have personally done this multiple times over thirty years in tax search.
Do you really have the extra time to thoroughly research, and call prospective tax candidates about your tax opportunity? Most people do not have the time to take on these extra responsibilities. It is a herculean task to conduct a thorough search of the market to find the the best of the tax profession to speak with a company about the open tax job in your organization.
Will you ask the right questions that help you make more informed decisions during the interview process? There is information an experienced recruiter will uncover that would generally not come up in an interview with a key decision maker. For example, a recruiter will ask questions like “What is your current relationship with your boss?” The candidate will likely not tell you they have a strained relationship with their boss(this is good for the recruiter to learn because it signifies they have a real motivation to move). However, it is a question that is unlikely to come up and even if it does, it is unlikely you will learn the whole story. Another example of lack of information is when the candidate is engaged and wants to take a month off during busy season deadline to have a wedding and a honeymoon the following year. Ah! ( A good recruiter will advise the candidate your future boss needs to know this information upfront). How about the fact a candidate interviewing tells the recruiter they are pregnant? Always tell a potential employer you will need time off with your newborn. I have personally placed many pregnant professionals and the people who hired them were wonderful to work for! It is about being honest and upfront with an employer about your family good news. Did you even ask the tax candidate if they would take a counteroffer from their current employer? Then you discover after extensive interviews and, after making an offer in writing, their current boss is their best friend and will likely make them a counteroffer to stay. Companies get burned when the candidate has taken considerable time to interview a candidate, and provide a written offer, only to have that candidate refuse an offer extended, to receive a higher compensation counteroffer from their current employer, if they stay. An experienced recruiter will ask a candidate if they would ever take a counteroffer from their current employer. It is more than likely, you will not learn this information screening on your own until your time has been wasted.
There are many secrets candidates keep from the company executives they are interviewing with, and it is up to the experienced tax recruiter to learn as much as possible about a candidate’s need and motivation in making a move to another organization. An expert tax recruiter will understand if the clients and candidates’ professional goals and expectations are compatible. If the company and candidates needs are not compatible, it is the recruiters responsibility to bring it to the attention of both parties. There are many questions we ask tax candidates that a company representative would never ask, and it is what makes an experienced tax recruiter a better screener to protect the clients’ interests. You work with the tax recruiter to discover more information about the person you decide to make an offer to. You ensure higher results in the quality of tax professionals you hire when partnering with an experienced tax recruiter.
Using A Contingency Recruiter To Conduct A Tax Executive Search
Although we do not do contingency search, I started out as a young contingency tax recruiter straight out of college, so I know the pain of contingency recruiting well. I would be at my desk working away on one contingency project and another prospective client calls and says “ Kat(Kitty), I want to ask you to look through your files and send me any resumes you have that would fit my open tax position.” When I did not know any better early on in my career, I would spend at of time calling, recruiting and screening candidates for a specific tax role; and ask candidates for permission to send their resume to a client, only to be ghosted by the client well into the tax executive search.
Any recruiter who sends a resume without getting the candidate’s permission first is not a recruiter you should be working with because it is unprofessional! Period! What if this tax candidate has already sent their resume to the client or given another recruiter permission to represent them to a client? Sending a candidate’s resume to a client without getting the tax candidate’s permission(in every instance) is reckless and hurts candidates when they are double presented by two different firms. It is a big no-no! Many companies will pass on a double presented tax candidate to avoid problems with search firm contingency fees. Another thing that happens to contingency tax recruiters is they often get ghosted by what they thought were a trusted client relationship. They spend weeks, or months, researching and identifying tax candidates for a company and then the person hiring does not return their calls. This greatly affects hard-working recruiters who are investing their time in their hiring authorities needs.
Companies who offer contingency recruiting agreements have put many good recruiters out of business altogether. There is no agreement to get paid for your work on a contingency arrangement. Contingency recruiters compete with human resource representatives who often prefer the company hire the tax candidates they source for the company, over the option of paying a recruiter fee. During my three decades in tax executive search, I have been a witness to numerous companies who hired tax candidates that were not as strong technically or interpersonally as the tax candidates we presented. The company avoided paying a recruiting fee but paid in higher taxes down the road by not hiring the most competent talent in the tax profession. I have been a witness to companies hiring candidates with well-known personality issues and poor technical skills hired because they found a candidate on their own. Great tax candidates do not just submit a resume via an online advertisement; you must research the market for these great talents; you must use sharp interviewing and screening skills; you must ask them what they love about doing taxes; you must ask then to speak with your clients because they were no even looking for another opportunity when you called them. I can tell if a tax candidate loves what they do, they love to talk about the technically sexy tax strategies they develop. They are super motivated to save millions of tax dollars for their companies and they love working in tax. Thy tell me it is like figuring out a big complex puzzle with big tax savings for their companies.
Another thing you should consider is a contingency recruiter is not married to work on your project every day(a retained recruiter is responsible for working on your project every day until the candidate is identified, made an offer and accepted the offer in writing. A contingency recruiter adjust the amount of effort they put into your search when working for free. You do not own a contingency recruiters’ time. A contingency recruiter will work on the searches where the fees are higher. If your company is offering a contingency recruiter a 20% fee and another project is a 25% fee and a third project is a 30% fee, and a fourth project pays 33%, the recruiter will focus on the higher fee project. You may think they are working on your search, but they are focusing on other projects that pay higher fees. Understand you are asking a contingency to work for free, so there is no solid commitment on their part to spend their time on your project. Now you know the real truth!
You Benefit Having The Smartest Tax Experts Working For Your Company
We are in a time in history where local, state, federal and international tax authorities are looking for new ways to increase revenue by taxing anything they can. Government authorities are raising tax revenue on anything they can think of. You need to retain the best of the tax profession in your organization or the revenue authorities will increase the the taxes you pay. Top performing tax professionals who are compensated properly will save companies millions, and in some cases billions of dollars that would be lost to tax authorities forever. Personally, I love recruiting for companies whose management is highly supportive of their tax organizations. It is a fact that companies who have a great partnership between the tax executive leader and the CFO are saving companies millions and billions of dollars annually or over several years. The smartest CFOs do not make any business decisions without consulting their tax executives first!
Recently, Yankees Star Aaron Judge hit his 300th home run in 955 games. He is a star athlete for the Yankees franchise. With a multi-year contract paying him 40 Million per year(that works out to $70,000 per bat), the franchise made an investment in him. Companies who invest in finding the best tax athletes will receive the greatest benefits. Over the years, the clients who retained us to recruit the very best tax athletes are also knocking it out of the ballpark because they are committed to hiring the best of the profession:
https://etsearch.com/retained-tax-executive-search/
Retaining An Experienced Tax Recruiter To Identify And Screen Tax Athletes For You
It is important to understand when you retain a tax recruiter, a retained recruiter is responsible for working on your search every day from day one when the contract is signed, the retainer is paid, an agreed number of qualified tax candidates are presented, and an offer is made and accepted in writing. You own the time of the tax recruiter you retain to conduct a tax search. A tax recruiter is retained to work on your search daily to completion. Companies who retain a tax recruiter, buys the recruiters time, thereby receiving a commitment from the recruiter that their time is focused on the company’s open tax role. Have you ever heard a tax executive state they spent over a year attempting to fill an open tax position? Guaranteed they went the contingency route.
Retained executive tax search is a very deliberate process with multiple steps involved to be successful. Although I list 30 Steps on our search site:
https://etsearch.com/retained-tax-executive-search/ there are often another 100 twists and turns in identifying and screening for tax candidates to consider a new opportunity with a client company.
The tax executives we introduce to clients are gainfully employed, not out actively looking at other tax opportunities, until we approach them privately about speaking with our client. We are experts at identifying, recruiting, and introducing tax executive candidates companies generally would not have access to on a search until they retain our tax search services.
To access the best possible tax executive candidate pool, you must have a written job description and a written marketing letter to market to a targeted tax audience. The marketing letter we write for clients has more sizzle to attract candidates. For example, if a company has a tax executive retiring in a year or two, you will want to state this in your marketing letter to inform prospects this person will be groomed for the lead tax executive role. If you do not want to advertise this fact, then it is up to the retained tax recruiter to provide this insight privately on a phone call. We have many retained clients who want to keep their tax executive search private for a variety of reasons.
One of the most time-consuming responsibilities of a retained tax recruiter is to conduct thorough research on all tax candidates with the requisite skills to do the job; then to cold call and discuss the opportunity with highly targeted tax executive candidates, coordinate interviews, provide feedback to both candidate and company, and make the entire process easier for both parties. In order to find the best in the tax profession, you must reach out and privately approach rock star tax candidates in a highly professional manner. You cold call and have private conversations with tax executives about anything that would motivate them to consider the tax role with your client. This is how we surface an extraordinary talent pool to introduce to our clients.
You then need to understand motivation; what motivation does a tax professional have to consider another opportunity? (i.e. not enough interaction with their boss, they feel they are undercompensated, they feel underappreciated, they do not have enough support to hire more tax staff, they are overworked, they currently have a long commute, prefer to work remote, etc..). Every tax professional has something that motivates them to consider another opportunity. It is the responsibility of the tax recruiter to understand a tax candidates motivation is to consider a new tax opportunity. Without motivation, they have no valid reason to change their professional life.
One of the biggest problem areas encountered by companies is losing a great tax executive during salary negotiations. Tax candidates are uncomfortable discussing and negotiating their compensation with potential employers. Many have told me so over the years how uncomfortable they are negotiating their salaries with potential employers. An experienced tax recruiter is your biggest asset to securing an offer acceptance. The recruiter should consult with the tax executive to discuss current compensation and what it would take for them to say yes to the new opportunity (if the client decides to make an offer). If the tax executive candidate would not accept an offer at the compensation the company is considering, this needs to be worked out before any offer is made in writing. Many deals fall apart at this stage, and it is to the benefit of the client to have a middle person involved to smooth things over.
Baseball player Aaron Judge had a bigger offer to go to San Diego Padres. but he took an offer several million less with the Yankees. Although I do not know what motivated him to take the lesser contract with the New York Yankees, something other than money motivated him. Although he grew up in California, he had his own motivation for taking the lower offer with the New York Yankees. When you are talking a difference of 360M contract versus a 400M contract, his motivation was not 40M more money.
What do you think his motivation was… sports fans?
Kat Jennings, CEO TaxConnections 858.999.0053
Need to retain a tax recruiter? Contact kat@etsearch.com to set up a time to talk or call 858.232.4415