While the trend is still small and hard to quantify, it appears that offshore locations are often captive, as opposed to outsourced, entities. Nonetheless, collectively they represent a skills creep that may give many American finance workers, well, the creeps.
Past surveys by CFO have shown outsourcing or offshoring of finance to be done by only a small minority of companies. But Hall predicts that the actual outsourced functions will expand beyond the traditional ones: accounts payable, travel-and-entertainment expense processing, and accounts receivable.
“Where we find opportunity is expanding that further into transactional accounting such as journal entries,” says Hall. “Some very aggressive organizations have moved planning and reporting into the shared-service organization.” Penske Truck Leasing Co. is an example of a company that was aggressive about sending accounting and finance operations overseas. As CFO Frank Cocuzza explained, Penske hired India-based Genpack to handle some 40 different finance processes for Penske, including collections, various accounting and financial-reporting activities, and even on-demand data analysis for business units.
Shared services, Hall predicts, “ultimately is going to cover a vast portion of the finance dollar sent. As we look at things that can be performed in low-cost locations, the great majority of finance is eligible.”
If death and taxes are certain, then a pulse would seem to guarantee work for a tax expert. After all, while a number of Republican presidential candidates are currently promising tax cuts, only one, Mike Huckabee, has a proposal (replacing income tax with a national sales tax) that might actually cut the tax code itself.
And most commentators agree — tax is one area of finance that may be recession-proof. “We see a lot of ramp-up on staffing in the tax department,” says Hall. “If there’s a 1 percent opportunity to reduce the effective tax rate, that will pay for a lot of tax attorneys.”
But if tax experts can count on work, it may be at several different companies. Hall says most corporate efforts to reduce tax rates are done on a project basis, typically lasting 18-24 months. For tax folks, that may mean a peripatetic future of moving from company to company. If that’s not your style, then you need to be ensconced deep inside the inner-circle of your chosen firm’s tax department. “The long-term staffing for a tax department is similar to treasury,” says Hall. “It’s a very lean organization when the company’s tax environment is stable.”
Korn/Ferry’s Eldridge agrees that “tax is hot” because companies see it as a function that can generate cash in a downturn. But he’s less convinced that the long-term model is project-based. He says he’s very recently seen efforts to have historically autonomous tax departments create strategic plans that mirror the company’s own business plans “That’s stepping tax up into a new category of being more strategic.” Either way, though, a career in tax seems to be a good bet.