Not surprisingly, nearly 60% of tax department leaders have identified compliance and regulatory adherence as one of their top priorities, according to the findings of the ³ÉÈËVRÊÓƵ Institute’s recent .

The balancing act of resource management

One of the primary challenges for tax department leaders is managing resources effectively. The report underscored this among those department leaders surveyed, showing that more than half of them said they felt their tax departments were under-resourced — an astounding finding.

There are many negative ramifications of your department being under-resourced, from staff experiencing burnout at a higher rate to more critical consequences like increased audits and penalties. Managing this involves making strategic decisions about how work is performed — whether through in-sourcing, outsourcing, or co-sourcing. Historically and even now, most tax department leaders would prefer to keep much of their work in-house, but the growing complexity of work and the increasing volume of work is making it difficult for departments to have in-sourcing as the only choice.

While some departments may consider outsourcing to external firms, the consensus among department leaders is to maintain control internally making co-sourcing the better choice. This approach ensures that the department owns the entire process, reducing the risk of miscommunication and errors with outside providers.

For the work that remains in-house, however, department leaders then have to confront the challenge of balancing talent and technology, making sure their teams have the necessary skills and tools to manage workloads efficiently. This often involves investing in technology that supports and enhances human capabilities. However, less than a quarter of tax departments’ budgets are being spent on technology, according to the report, although most department leaders surveyed said they hope or anticipated that this will change over the next 12 months.

Is technology a double-edged sword?

There is no doubt that technology plays a crucial role in modern tax departments, offering both opportunities and challenges. Most tax departments (79%) have automated half or less of their work, the report showed, with technology being used to automate routine tasks, and therefore freeing up employees to focus on higher-level strategic activities. This practice not only improves efficiency but also helps the department retain talent by eliminating the least-desirable aspects of the job.

When advocating for technological investments, department leaders should not only emphasize the need for such investment to mitigate compliance risk but also highlight how it will help with retaining staff.

However, integrating new technology is not without its challenges, requiring careful planning and training to ensure that all team members are equipped to use new tools effectively. One challenge identified in the report that’s currently faced by department leaders is staff adoption. Indeed, even when companies recognized the need for technology investment in their tax departments, those departments often face the challenge of getting the technology utilized — in the way it should be and to the degree that makes the investment worth it.

Therefore, having a standardized approach to training may not always be effective, rather it may be far more beneficial to train staff on the technology in the way in which they would be working with it, based on their unique needs and workflows.

How to build & train a resilient tax team

Too often there is just one course of training that typically comes only at the beginning of a technology’s implementation; however, for success, departments must provide continuous training and development in order for staff to maintain the needed skills and cultivate an adaptable workforce environment. That’s why it’s important for department leaders to prioritize training as part of annual departmental goals and development plans, ensuring that their teams are equipped to handle current and future challenges.

In additional, interdepartmental training could be particularly effective, allowing team members to learn from each other’s experiences and expertise. Having a culture that encourages curiosity and continuous learning while also fostering collaboration builds a team that is resilient. This further allows for team members to feel valid and not stagnant in their jobs as they experience or expand their roles.

In the report, many tax department leaders cited hiring and retaining talent as a top priority, and part of the talent picture includes the various policies companies may have around return-to-office plans. For those tax department leaders who are part of an organization that has mandated a return to office, they have to find other ways to keep staff engaged and provide additional incentives to retain them. Tax departments that remain hybrid might fair better with retaining talent, however some team members may struggle to have the kind of engagement that comes organically with in-person office work.

Leading a corporate tax department through continuous change requires a strategic approach that balances compliance, resource management, and innovation. By focusing on in-sourcing and technology, fostering a culture of continuous learning, and implementing flexible return-to-office policies, leaders can position their departments for success, as our recent report suggests. With the right strategies in place, tax departments can not only help their companies meet regulatory requirements but also drive additional value for their organizations.

You can download a full copy of the ³ÉÈËVRÊÓƵ Institute’s , here.

Half of employees now say all this change is too much, and a significant amount are saying that their well-being is at risk and could harm business performance, according to , partner in PwC’s Strategy & Consulting business and adjunct professor at NYU Stern School of Business; and , author and keynote speaker. The pair spoke together .

Indeed, looking at these facts through a lens of environmental, social & governance (ESG) concerns emphasizes that employee well-being continues to be a material issue. And this puts the need for a new mindset around employee well-being as a key tactic of organization resilience. In fact, investing in employees must be at the front and center of corporate strategies to help employees thrive in business environments, which are experiencing an ever-increasing pace and level of change that is unlikely to subside any time soon.

To adapt to the far-reaching impact and accelerating rate of change, companies need to center tactics that build trust, which include a skills-first approach as well as upskilling leadership and management to better equip them to lead multi-generational teams working from many cultures and locations.

Demonstrating the alignment between well-being and profitability

It can be shown that there is a strong link between employee well-being and business profitability, and that investments in financial, emotional, and physical well-being are crucial for sustainable growth, according to Sethi and Phelps. This finding is also supported by a recent by Jan-Emmanuel De Neve, Micah Kaats, and George Ward. The study found that:

• • • There is a strong correlation between average levels of company happiness and key indicators of firm performance. For example, a one-point increase in the average employee happiness score (on a 1-to-5 response scale) is associated with an increase of 1 to 1.2 percentage points in Return on Assets (ROA), indicating higher profitability; and an increase of 0.30 to 0.34 in Tobin’s Q, which is a measure of firm value and underscores the relationship between market valuation ²¹²Ô»åÌýintrinsic value.
    • Longitudinal evidence also shows a positive correlation between employee happiness and financial performance. For example, pre-pandemic happiness levels are predictive of post-pandemic firm performance. Indeed, pre-pandemic happiness levels were significantly predictive of higher Tobin’s Q scores. These relationships continued to be significant in the following years, showing that higher levels of employee happiness are linked to ongoing positive financial performance over time.
    • Simulations in stock market performance conducted during the study also point to the same conclusion. The study simulated an investment strategy based on the top 100 companies with the highest workplace well-being scores. This portfolio outperformed standard stock market benchmarks such as the S&P 500, Nasdaq Composite, and Russell 3000. Over the 3.5-year period studied, the annualized return for the well-being portfolio was 14.84%, compared to 13.00% for the S&P 500.

Priority actions for company leadership to build trust

Trust is central to employee experience and business performance. Transparency, candor, and engaging employees are all essential for building trust, and human leadership and skills development remain critical as well. Practices like open dialogues, transparency on tough issues, and regular interactions between senior leaders and employees can foster a culture of trust and engagement. In addition, Sethi and Phelps recommend that executive leadership of organizations prioritize upskilling by:

• • • Leading across generations and locations — Companies need to revamp manager learning experiences to focus on how to engage different generations in the workforce — by, for example, creating initiatives in which younger and older employees learn from each other.
    • Demonstrating care regularly — Leaders who show a sincere interest in employee well-being can enhance engagement and trust, and by helping employees figure out how to use AI to improve their work-life balance can enhance that trust. AI can be used to make work more efficient and allow employees to focus on high-energy, impactful tasks. In fact, professionals surveyed in ³ÉÈËVRÊÓƵ’ recent Future of Professionals report predicted that GenAI will free up four hours per week by this time next year.

A final related point that Sethi and Phelps make is the need to evolve the corporate mindset to look at employee hiring and training as investments rather than as expenses. Using a traditional financial lens, this involves reshaping the paradigm through which employee development, change management, and cultural transformation are viewed as a balance sheet item rather than an expense on the income statement.

To instigate this transition, Sethi highlights the need for engagement scores to be built into business cases for technology and transformation investments. Well-written business cases for technology investments should include considerations of employee engagement and skill-building, such as estimates of how fast or slow adoption rates might proceed and how making the investment will re-shape job functions and roles to better enhance employee satisfaction, happiness, and experience.

This paradigm already may be taking shaping. When asked to identify the top three expected outcomes of enhancing their company’s ESG reporting practices, 51% of respondents to a said that both talent attraction and retention and brand reputation and enhancement could be positive outcomes of enhanced ESG reporting strategies, which is consuming most ESG-related capital investments at the moment.

As organizations navigate the rapidly evolving business landscape of 2024 and beyond, prioritizing employee well-being, fostering trust, and investing in skills development will not only enhance workforce resilience but also drive sustainable profitability, positioning companies for long-term success in an increasingly competitive global market.

You can find more about here.

But how can government agencies best cultivate such workforces and strategies to best address and mitigate environmental, logistical, and cyber threats?

The best resiliency defense is a good offense

Over the past three years, unexpected health, economic, and environmental challenges have highlighted vulnerabilities that can disrupt government agencies. Resiliency strategy focuses on how well your organization can maintain its operations in a worst-case scenario. Indeed, should involve having plans, processes, and systems in place to operate even when conditions are severely compromised, ensuring continued provision of essential government services, says Suzanne Spaulding, Sr. Advisor for Homeland Security at CSIS.

The are staggering, with 15 designated disasters in 2022 alone causing more than $1 billion in losses each. Given the escalating pace of climate change, it’s likely that resilience efforts and funding are not keeping pace with the increasing frequency and severity of these disasters, according to The Federal Policy Action Plan to Accelerate Local Climate Resilience, from (C2ES).

In fact, resiliency planning and infrastructure supports collaborative efforts with advisory groups and external partners and can aid in securing and distributing emergency funds. It is estimated that for every $1 invested in pre-disaster resilience planning, there’s a potential $6 in savings on recovery costs, according to the C2ES plan.

Resiliency planning in the federal government

The C2ES plan outlines the federal government’s recommended role in climate resilience as a chief coordinator and resource provider. This involves effectively administering government resources, providing leadership, and supporting local-level resilience actions and capacity-building. Essentially, the federal government’s primary function is to act as a hub for sharing high-quality information and a source for funding, the plan notes.

As future decades are likely to see increased climate change-related natural events, we are witnessing communities and nations shift to greater renewable energy sources and increased electricity usage, according to the CSIS report. These changes pose increased risks to energy systems.

The Biden Administration shifting away from carbon pollution in energy development and moving toward a net-zero emissions economy. Since 2021, more than 20 federal agencies have published climate plans, the CSIS report states.

Given workforce turnover due to the COVID-19 pandemic, however, it is crucial to provide agency training to ensure the federal workforce is adequately prepared to anticipate and respond to the ongoing impacts of climate change.

Increased funding and centralization of federal efforts are important priorities in the years to come. In 2019, FEMA received grant applications totaling $3.6 billion dollars for their Building Resilient Infrastructure and Communities (BRIC) program, which focuses on updating critical infrastructure, notes the C2ES action plan. However, in that funding cycle, only $500 million was available, enough to fund just one out of every seven grant applications.

Clearly, federal agencies lack centralized coordination on this front. To address this problem, the U.S. Congress introduced the , during the 2021-2022 Congressional session. The proposed Act aimed to establish a Chief Resiliency Officer role in the Executive Branch, create a government-wide effort to build resilience to climate-change vulnerabilities, and form working groups to drive the strategy and its implementation. Despite broad bipartisan support, the bills did not progress to a vote.

Resiliency planning at the state and local levels

Resiliency planning implementation varies widely across the United States. However, 27 of the 50 states have some form of resiliency infrastructure in place. State and local government agencies are familiar with local needs and have more direct access to land and energy infrastructure, states the C2ES plan. Although federal agency platforms offer valuable information sharing, they could enhance collaboration by enabling secure information exchange among users, added the CSIS report.

According to a report from the (NCSL), those states with some form of resiliency infrastructure in place are using resilience tools, such as: a state office of resiliency, a state resiliency officer, or a commission or task force. Sixteen states have appointed a chief resiliency officer role to streamline planning across agencies and provide oversight, the NCSL states, adding that these resiliency efforts are more prevalent in coastal states, with many of them specifically addressing climate change and in particular, flooding.

One area that could benefit from improvement at the state and local level is the standardization of resiliency measures for energy systems, according to the CSIS report. Current data on electrical reliability provided by utilities does not account for systemic differences in capacity, criticality, or vulnerability. While organizations may be hesitant to share information that exposes vulnerabilities, the true value of resiliency planning is intangible until a disaster occurs.

Ensuring equity and workforce resiliency

Low-income and marginalized communities are faced with a disproportionate threat from climate change. These communities are more likely to bear the brunt of climate-related impacts due to their locations in vulnerable areas, which often have less access to FEMA assistance, pose challenges for evacuation, or are prone to greater damage. Effective resiliency planning and resource distribution can increase equity in crisis response and preparedness, notes the CSIS report.

Agencies engaged in resiliency planning bear a direct responsibility to foster equity within their teams. Diversity, equity, and inclusion (DEI) efforts enhance resiliency because a diverse workforce is better equipped to anticipate risks and is less susceptible to groupthink, the CSIS report states. To promote equity in government workplaces, it’s crucial to revamp hiring processes, address bias or perceived inequities, and identify and rectify biases and systemic barriers that exclude certain groups.

The global COVID-19 pandemic underscored the importance of adaptability in adverse situations and stress management. Workforces that are diverse, equitable, and provide psychological safety are better prepared to innovate and navigate the climatic changes we will all face in the future.