Ask a tax partner this question and he/she will say practice, ask a head of tax in industry, he/she will say industry! Ask a specialist tax recruiter and I will say it all depends!
It depends on the type of person you are, your interests and what is important for you in your career.
However, whilst it’s a subjective decision, there are some objective factors which can be considered to help decide if practice or industry is right for you.
Business environment – Key business service vs support service
Within practice, you are part of the key business – your work directly contributes to the revenues of the business. Within industry, you are a support service, the work you do does not directly generate profits for a business. Of course, it can fundamentally affect the profits but in essence it’s a support service.
That means a fundamental shift in your environment. In simplistic terms, you can be part of a 200-person team, made up of tax professionals, generating 50% of the revenue for the firm. Or you can be part of a 4-person tax team whose function is to ensure tax risks are managed, whilst the business continues to grow and focus on profitability.
However, finance and tax functions within industry are evolving and transforming from support to business partnering roles allowing tax teams to be an integral and influential part of the business.
Also, with a practice background, you come from a culture where you have trained with similar people within a collegiate environment.
Within industry, you will now be part of a wider business setting and tax can be perceived in a different context. You have stepped out of the professional services environment into the corporate sector and this alone presents a different feel, culturally.
Type of work – Client facing vs non-client facing
Both practice and industry can provide equal measures of variety but the type of work differs due to one being client facing and one being non-client facing.
As a tax advisor in practice, the day you face will be dependent (primarily) on your client’s requests. As a tax advisor to your clients, you have to make sure your work is technically correct and accurate and so the work your involved in will be technical and client solutions driven. Managing and developing client relationships will be a big feature of your work and providing commercial solutions to complex tax matters.
The larger the firm, the more specialised you will be become in one area of tax or within one industry sector. As your career progresses within practice, typically you will be engaged with more tax planning and consultancy work and step away from compliance, although this depends on the team/firm.
As an in-house tax advisor, your role is about identifying the tax risks involved in the business and liaising with external advisors on technical matters. This can range across all taxes and across multiple jurisdictions making your role much broader. Dependent on the compliance model, your role can shift towards a much deeper focus on tax reporting, compliance and process improvements.
Other factors to consider within industry is around the reliance/budget available you have on external advisors, the amount of M&A/transactional activity the company are involved in, the corporate structure and where the decisions are actually made – this will all have an impact on the type of work you will be involved in.
Whilst you won’t have “challenging clients” to deal with you will be expected to develop and manage relationships across cross functional groups within the business to support the business needs from a tax perspective.
The culture of every organisation is unique, be it within a practice environment or industry environment.
What defines culture? In my opinion it’s the small things that are done every day and by the people that work there. Therefore, it’s impossible to say which offers a better culture – practice or industry. It depends on the people that make up the organisation and how they behave every day.
To help you decide if you are a cultural fit within the organisation, often the only way to find out, is by meeting with their people. The feeling you get by just walking into the reception can give you a good sense of what it’s like to work there and hopefully if’s a good one, this feeling will be continue as you meet with people throughout the process.
Future career paths
You will progress your career within tax if you stay in practice. A move to industry may afford you the chance to move into broader finance roles, commercial and strategic roles and ultimately a move out of tax.
A career in practice (particularly within the larger firms) does tend to be more structured where a transparent, clearly laid out career path has been carved out. You will likely get that promotion to manager, senior manager, director etc. if you stay in practice.
Whilst industry may not be as structured in terms of promotional opportunities for tax professionals, learning, development and general progression is on offer within many organisations. Furthermore, the growing importance of tax across the globe has resulted in an increased emphasis on having a strong in-house tax team with additional headcount required and thus promotional opportunities.
Benefits – extrinsic and intrinsic rewards
A move to industry some years ago, almost always resulted in a significant uplift in salary. However, firms have disrupted this trend in recent times as they have recognised the need to improve salaries and benefits, particularly since the downturn impacted on a much lower salary base for tax professionals in practice.
As mentioned above, a career path is generally well structured in practice offering frequent promotions and thus a visible increase in salary. However, whilst industry may lack this structure, reward, comp and benefit programmes are usually in place to ensure their best people are financially rewarded for their work.
In both practice and industry, there has been a shift in focus from extrinsic rewards (those that can be measured in monetary value) to intrinsic rewards such as office amenities, flexible working hours, flexibility to work from home, career progression opportunities etc. Work life balance is one such reward….
Work life balance
Work life balance is a big factor that is often discussed when comparing practice to industry
Is it true that industry can provide a more balanced work/life balance? It depends!
Needless to say, the environment in practice is client facing so you are expected to deliver when required and demanded by your clients. However, the corporate sector have clients too – in the form of internal stakeholders and investors, where challenging deadlines can arise at any time. It’s often a question of figuring out who is controlling the work load. Senior tax professionals in practice get to a stage in their career where they can control the workload, as can tax teams in industry where the decisions are made in Ireland or Europe.
Final note: If you decide to move to industry, when should you move?
My advice on this one would be that unless you categorically do not want to stay in practice or tax (for whatever reasons), make the move to industry once you can. However, I do think it is valuable to get post qualification experience in practice to build up your tax technical experience and figure out what type of tax you are most interested in.
It is possible to make the move from practice to industry at any time right up to manager, senior manager and director however the volume of roles significantly decreases and your competition intensifies as you become more experienced. Prior industry experience is often required at the more senior end.
Take the time in considering your options. What is important for you now may not be as important in a few years so it’s good to keep asking the questions to ensure you’re moving in the right direction in your career.