The staffing challenge of 2000 and beyond.

• Author: Santiago, Anthony G.
• Position: Tax professionals

America's historic view of economic growth has been based on the underlying assumption that there will be more people available for jobs tomorrow than there are today. This is no longer true. If you are trying to hire tax professionals, your reality will be a growing manpower shortage.

While we have faced prior shortages driven by economic growth, the problem will increase significantly in the future because of a decline in the birth rate. Using historical average figures for both worker participation and economic growth rate, the demographics show that by the year 2005, there will be 15 percent more jobs than workers. There is no remedy for this staggering problem. Even if the birth rate could be dramatically increased, it would not affect the labor shortage until after 2020. In addition, there are specific factors that will further compound the effect on the tax profession.

1. Factors Affecting the Labor Shortage

   First is the continuing move toward specialization and segmentation within tax departments. This is a by-product of the increasing complexity of the U.S. and international tax law, resulting in the narrowing of the available labor pool. This segmentation creates an imbalance between supply and demand and actually makes cross-training more difficult, and at the most critical levels, impractical. All of us confront this problem when attempting to recruit for international or multi-state tax positions and we are just at the beginning of our demographic trend.

   Second, the leadership within the tax profession has been highly successful in influencing upper management in corporate America to recognize the value of including tax on the front-end of transactions. Therefore, tax departments are required to hire people with strong business and communication skills along with solid technical capabilities. This also considerably narrows the available pool of talent and further exacerbates recruiting efforts.

   Third, the politicizing of the federal tax code and its potential simplification has deterred young financial professionals from specializing in tax. This trend will continue. While many of us may discount this reality, a sophomores or juniors in college will question why they should take the risk when a less politically targeted profession is available.

   Finally, the tax profession is unfortunately insulated from the benefits that immigration can offer other professions. Unlike technical fields such as engineering, computer programming...