How times change! Last year, tax enjoyed another busy season and firms still had recruitment at the forefront of their minds. A year on and tax has now been hit by the general market slowdown. A number of our clients have unfortunately had to make cutbacks in staff numbers although we have noticed that this time round, firms have kept a long term eye on the future and have thought of more imaginative ways to retain staff through sabbaticals and part time options. This gives us hope that they are confident that the tax market will come out of this downturn, the question on everyone's minds is when.

From our perspective, we have found the volume of work has decreased, however when roles do come up, they are business critical and are unlikely to be hit by the Last In First Out principle. So whilst it might feel like now is a good time to keep your head down, our advice would be to keep an eye on the market for exceptional opportunities - you have nothing to lose. If you have lost your job and your search is more active, keep your search as flexible as possible both from a salary and location perspective. Roles are coming through slowly so it is important to react quickly when you are alerted to a new possibility. At senior levels, the demand is still out there for candidates who are business winners and who can develop a business line going forward.

It's not all doom and gloom out there - certain areas are still relatively active. Tax/IT is growing, transfer pricing, expat tax are still active and some areas of corporate tax are also moving. This will increase over time as the level of corporate transactions increase but it will be a patchy recovery.

From a salary perspective, we anticipate that pay rises will be more modest (if at all) than in recent years. There will definitely be a case for holding on to existing talent by rewarding them well but those expecting large bonuses will be disappointed. It is unlikely we will see a return to reasonable bonuses until 2010.

So what of the future - hang on in there! It is going to be a bumpy ride for the next 12-18 months, but tax is one sector that always bounces back. We have seen it happen through the last 2 recessions and the same will be true of this one.

Salary Survey
For further information about current trends and specific salary information, our Direct Tax Salary Survey and Market Report 2008/2009 is now available. To request a copy, please call 020 7405 3404 or email tax@blt.co.uk.