What Employees Think About Their Employer’s Tax Policies

I downloaded this publication regarding a thousand employees being asked questions about their firm’s views on US corporate tax policies.  These were some of the key findings from the report.

·         “Almost three-quarters of U.S. employees would view their employer negatively if it relocated its headquarters to another country to achieve a lower corporate tax rate.

 

·         More than half of employees would trust their employers less for pursuing tax and accounting strategies they personally disagree with.

 

·         85% of tax and accounting professionals claim to care about employee perception.

 

·         71% of tax and accounting professionals believe that public perception significantly influences their organizations’ financial decisions, suggesting that business leaders are sensitive to these issues and understand the quantifiable value of negative perception.”

 

Corporate leadership has a fiduciary requirement to maximize shareholder value.  The question is at what cost?  The question also is to evaluate the impact on not only the bottom line, but on customers, employees and other stakeholders.  This publication points out that overall employees trust their employers, but as entities become larger the overall trust is less.   The article also points out that for those in such industries as technology, manufacturing and retail the trust is greater.  It drops a bit for those in financial services, insurance, real estate and health care, but is still reasonably high.

 

Only 31% of employees pay attention to the tax policies of their employers.   Those in smaller corporate entities tend to pay attention more than those in larger entities.   For those that pay attention they really tend to pay attention.

 

85% of employees care about the public view of their employer.  73% of employees “would view their employer negatively if it relocated its headquarters to another country in order to achieve a lower tax rate.”

 

However, when it comes to lobbying congress for special tax benefits for their employer about half think that’s perfectly acceptable.

It is important for employees to be aligned with the firm’s mission, vision, goals and strategies.  This presents a bit of a dilemma for hiring, training and retaining the best employees.  It is important that the firm not only address this from the standpoint of engaging employees and offering them opportunities, but that one of the considerations going forward may to consider the tax position taken by the firm. 

 

When the values of the employer are consistent the employees’ the chances are greater that the employee is more likely to be aligned with the firm’s mission, vision, goals and strategies.  When the values of the employer are not consistent with the employees’ this may very well be a cause for concern.

 

Regarding changes in tax policies going forward, firms might be well advised to not only look at the bottom line, but also what the ramifications may be for employees, customers and other stakeholders before making such decisions.   Once a decision has been made the firm may also want to consider how to educate various stakeholders on the rationale behind such decisions.

 

Based on the information in this article, this also begs the question as to what other areas may be sensitive in nature to various stakeholders and how to manage those areas given the current corporate culture and climate.  The article certainly addresses issues regarding taxes.  It also calls into question the firm’s perspective on other values and how important these really are to the firm.  This article raises good food for thought.

 

Mike is a manager with over 25 years’ experience at all levels of management.  He also worked at the IRS for 28 years.  Mike provides services related to conflict resolution (business to business, business to government within businesses), and value added services (business valuation reviews, research credit advice, transfer pricing assistance, strategic planning and leadership development) to help clients and boards of directors on a wide variety of issues.  When not serving clients as a consultant or blogging, Mike is an avid writer, speaker and educator.  When not working Mike enjoys family, church, volunteering, and daily yoga, meditation and exercise.

About the author

Mike Gregory is a professional speaker, an author, and a mediator. You may contact Mike directly at mg@mikegreg.com and at (651) 633-5311. Mike has written 12 books (and co-authored two others) including his latest book, The Collaboration Effect: Overcoming Your Conflicts, and The Servant Manager, Business Valuations and the IRS, and Peaceful Resolutions that you may find helpful. [Michael Gregory, ASA, CVA, NSA, MBA, Qualified Mediator with the Minnesota Supreme Court]