4 SIGNS THE LABOR MARKET IN TAX IS SOFTENING

The first half of the year is mostly behind us and the summer heat has taken over. Even at 6 AM as I walk my beloved Golden, I hear the buzz of air conditioning compressors doing their thing. For me, the summer heat is usually a sign of hiring activity picking up, but it’s not quite the same as the past few years. We’re seeing a slowdown in activity that started at the end of last year.

Do not be alarmed, this isn’t what I would call a recessionary slow down; it’s just not as frothy as it was. Salaries aren’t skyrocketing and companies aren’t fighting for talent like they were in the post-pandemic boom. What we are seeing is probably a more “normal” labor market. A healthier and more sustainable version of a good market. Yes, there have been a few layoffs (cherry picking, usually), but nothing of significance (unless you’re one of the people that got laid off).

The 4 tell tale signs of a softening labor market are in play for tax professionals. I just mentioned one of them – layoffs. Another sign is the flattening curve of compensation. We aren’t seeing 10 – 20% increases in salaries, like we were in the ’22 – ’23 timeframe. We’re back to a situation where an increase of 3-5% is more common. A 3rd sign of a slowing market is the time to hire. During the peak of the hiring frenzy, it was common to see candidates receiving an offer within a day or two of interviewing. Now, after 2 or 3 rounds of interviews, employers still take days and even weeks to pull the trigger. If you like the analogy of a war for talent, we’ve gone from a Rambo movie with machine guns blazing to a presidential assassination plot where there is a lot of build up to one shot being fired.

The 4th sign of a slower market is the sheer decrease in the number of job postings. I’m not sure anyone tracks the data like I do, but the number of active postings for tax jobs is down by almost 40 percent in certain markets. In Colorado, where I am based, the job postings in tax are down by somewhere in the 20-25% range. Industry tax positions are the most impacted, as you would expect. Public accounting job postings are down a little bit less. Hiring and job seeking is back to a more strategic activity. Not the chaos like when gates open at Coachella. Please note – there is not a direct link between the reduced number of job postings and the number of open positions.

Next month I’ll opine a bit about finding a job and keeping a job in the current market. In the meantime, enjoy the upcoming Independence Day holiday. Please reach out if you’re interested in making a job change or need help with tax hiring or staffing.

To your continued success,

Jay McCauley
Executive Recruiter
jay.mccauley@oxfordtaxrecruiting.com
303-730-0100