Thursday, 17 September 2020

Upskilling your practice for the new new normal in accountancy

Firms already on the path to digitalisation will have seen this period of prolonged remote working and online collaboration as justification for their continued investment in technology. For those pioneering firms that see technology as an enabler for the growth of their practice, it is very much a key factor in their ability to not only survive, but to thrive in a post-COVID world.

With so much reliance on technology, where does that leave the humble accountant? What now for your team of technical experts who have perhaps delivered services in the same way for many years? Whilst automation is expected to change 50% of accountancy and finance related jobs, the World Economic Forum estimates that it is not expected to eliminate more than 5% of them.
Accountants, as any tax professional will attest, are incredibly resilient and adaptive to change. They are poised for growth if they can take the opportunities that will present themselves over the coming years. One way to prepare for this opportunity is to build a practice ripe for technology to work with skilled professionals in your practice.
Upskilling your practice to work hand in hand with the technology to provide an efficient practice that keeps up with the remote working regulations changes, changing client expectations. Beyond building a competitive customer experience, you will need to build a practice that keeps up with the changing expectations of individuals in the workplace, shifting social norms and values, and new types and levels of connectivity and demographics.

Learning from past economic downturns

In the early 1990s many practices understandably put recruitment on hold throughout the recession, with many cancelling graduate recruitment programs. A necessary move for cashflow perhaps, but within a few years this created a sizeable skills gap. There was a distinct shortage of part-qualified and semi-senior candidates coming through the ranks and it is very expensive to have fully qualified staff doing the work of part-qualifieds and semi-seniors.
Firms with a little more agility were able to cherry pick the best candidates during the recession and were primed for growth in the period of economic recovery. The same pattern today. The firms that are able to adapt quickly and repurpose their business for the changing times are able to keep their existing talent and attract the best of the rest.

Learning to work with automation

The synergy of accountant and machine can open doors to higher-value work, making practices more efficient, more productive, more interesting, and ultimately more meaningful. Automating routine tasks frees up time for your team to do more of what your client’s value most – providing insight and supporting their business ambitions.
Having the desire to work digitally creates momentum. Prioritise data analysis over data entry and valuable conversations with your clients will follow. Even with automation, the business of accountancy is still all about relationships.

Recruiting for change

Change inevitably impacts greatest on your people. Ensuring they have the skills to operate effectively in a new and uncertain landscape is always difficult. The soft skills of yesterday will become the essential skills of tomorrow. Until now you may have been recruiting people with great inter-personal skills, who quickly make people feel at ease in their company, who make great use of body language and can build rapport effortlessly. Are those people able to manage relationships as effectively over a video call as they are in person? If they aren’t, they will certainly need to.
Recruiting people who have a clear aptitude for change, a passion for new technology and the people skills needed to build strong connections with clients will be paramount. In addition to the expertise needed, these tech-loving accountants with the know-how in the profession and a passion for new ideas and innovative tech solutions will be keen drivers in the synergy between man and machine and the growth of advisory services in the business.
Technical proficiency has limited value for those unable to communicate effectively in a language client will understand.

Bring in the new or upskill the old

It’s important to understand the skill set that you've got within your practice today. Have you got the right people with the skills to offer advisory services, work remotely with your clients and meet their ever-changing needs?
If not, is there the potential to upskill your existing team or do you need to bring in new talent? Have you got a team of technologists? This could be an opportunity to recruit people with those skills to enrich your offering to clients.
Investing in people, technology and relationships is ultimately not just a strategy for making it out of an economic downturn but a strategy for riding the economic upturn that inevitably follows.

Thursday, 10 September 2020

Beyond the movement control order: employment & HR issues

Authors: Donovan Cheah (Partner) and Zi-Han Lim (Associate) (Donovan & Ho)

With the movement control order (MCO) creating many novel workplace issues, many employers are still struggling to adjust to what it means to have “business as usual” during the MCO.
Once the MCO is lifted fully, workplaces will likely not be able to return to normal. The possibility of restrictions to promote social distancing to curb the spread of the COVID-19 virus may become a necessity and thus, compulsory. The HR function will, therefore, play a pivotal role in balancing the welfare of employees, with the need to minimise interruptions to business operations.
As businesses look ahead, here are some employment and HR issues that employers need to consider:
          1. Implementing safety and sanitisation measures
Employers should re-evaluate their current safety measures to prevent the spread of the virus in the workplace. This include:
          • having hand sanitisers at every entrance of the Company’s premises
          • imposing a mandatory sanitisation policy for visitors
          • providing face masks
          • ensuring proper distancing in the seating arrangements for employees
          • putting up notices to remind employees of hygiene standards
          • imposing temperature checks on all visitors and employees prior to entry to the premises
          • imposing a stricter health policy such as prohibiting sick employees from working at the Company’s premises and requiring them to take sick leave, and
          • setting a travel policy to restrict non-essential business travel and to remind employees not to travel to high-risk locations even in their personal time.
          2. Remote working/work from home
The MCO has shown us that for some businesses, working in the comfort of your own house can still be productive. Employers are able to continue this even after the MCO has been lifted, or introduce a rotation policy where different departments can take alternate weeks off to work from home while the remaining ones can work in the office.
          3. Limit face-to-face meetings
The MCO has also demonstrated that many face-to-face meetings are non-essential, and businesses can still communicate with their customers and employees using technology. Employers can, therefore, limit the need for physical meetings by using software, such as Google Hangouts, Zoom, Whatsapp video calls or Facetime. This approach will also complement any work from home policy that is implemented.
          4. Security
If working from home will be considered the “new normal”, employers need to look into whether they have adequate infrastructure for cyber security to support remote working. There is an increased risk of a breach as employees may not be logged into your organisation’s network and may be using their own devices. As there is less need to meet people face-to-face, there will be a corresponding increase in the need for authentication and authorisation whenever employees are dealing with third parties, preventing attacks, such as phishing and malware. This is especially if the employees are dealing with sensitive or confidential information. As such, employers should re-evaluate whether there are any security gaps in their IT infrastructure that need to be addressed, as this is a worthwhile, long-term investment given that the way we work is now changing very rapidly.
          5. Cost-cutting measures
When the MCO is lifted in full and employees are allowed to go back to work, given the current economic climate, companies should still look into practical cost-cutting measures to ensure long-term sustainability of their operations. From an HR perspective, this could include eliminating or suspending non-essential fringe employee benefits, such as corporate gym memberships, company dinners and entertainment or lifestyle/clothing allowances. Discretionary bonuses or incentives can also be limited, reduced or removed.
          6. Reviewing HR guidelines
Given the impact of the COVID-19 outbreak, HR guidelines and policies ought to be reviewed to ensure that they are adequate to support any measures that the Company intends to take and that they are also commensurate with the Company’s current financial standing and the overall economic climate.
As mentioned above, “nice to have” but not essential fringe benefits may have to be looked into especially if they are offered to employees in writing via company policy or in their contract of employment. Crucial policies that may impact the Company’s financial position and salary costs, such as retrenchment benefits, promotions, bonus and increment, must be re-looked at this juncture. Other policies that are worth updating would include IT policies/use of own devices policies, confidentiality policies and remote working/flexible working hours policies.
Preparation is the best defence against turbulent times, and thinking beyond the MCO may be crucial if a company intends to stay afloat.

(Note: For further information about our Asia Pacific Employment Law subscriptioncontact us at (Malaysia) or (Singapore)).

Wednesday, 2 September 2020

Guide on Digital Services by Foreign Service Provider (FSP)

The Royal Malaysian Customs Department has released a version 2 of their guide on Digital Services. The guide aims to provide better understanding to professionals and businesses on  ''Digital Service'' tax. The guide contain the following information:-
  • Implementation of Service Tax on Digital Services
  • Who is considered as a FSP
  • Who is considered as a consumer in Malaysia 
  • Digital Services provided within the same group of company 
  • Registration for FSP
  • Issuance of Tax invoice for FSP
  • Furnishing of returns
  • Duty to keep records for FSP

Lochana Nanthacumar
Content Management Analyst
Wolters Kluwer Malaysia

(Note: For further information about our Sales and Service Tax (SST) subscription, contact us at (Malaysia).

Friday, 28 August 2020

What to do when an employee claims bullying during performance management?

Authors: Aaron Goonrey (Partner) and Isabel Hewitt (Lawyer) (Lander & Rogers)
This article was originally published in HRM Australia.
A recent FWC case highlights the importance of good record-keeping when employees make bullying and harassment claims.
Every experienced HR practitioner knows that performance management is a useful tool for employers and employees to work collaboratively to improve an employee’s performance. 
However, in some cases, constructive feedback during a performance management process – even when delivered in a reasonable manner – can be difficult for employees to hear. So how should HR professionals and managers respond when an employee doesn’t take the news so well?
The answer to this question lies in a recent Fair Work Commission (FWC) decision involving an employee who claimed she was bullied around the same time she was placed on a performance improvement plan (PIP).
In the decision, deputy president Reg Hamilton said it would be “disappointing” and an “abuse of process” if a normalised practice arose out of employees bringing unsubstantiated bullying or other claims in response to an employer requiring someone’s performance needed improvement.
A fair reaction or an overreaction?
In this case, an employee brought an unfair dismissal application against her former employer, Berwick Waters Early Learning Centre, alleging that her decision to resign from her employment amounted to a constructive dismissal. 
She claimed the reasons for her resignation were her employer’s failure to address her allegations of bullying and harassment against the employer and “other pending matters”.
The alleged harassment included issues with her performance management and the “rough behaviour” of the centre director, who she alleged frequently yelled at her in front of other colleagues. She claimed she had no choice but to resign, as she felt the HR department did not investigate her bullying complaint. 
The employer denied the bullying allegations, claiming the employee had, “simply taken extreme exception to being brought into a procedurally fair and reasonable performance meeting”.
Interestingly, she was placed on a PIP on 1 November 2019 and brought allegations of bullying against her employer just 10 days later. In the employer’s opinion, the employee’s unsubstantiated claim of bullying and harassment made after the fact were a direct result of her objection to being taken through the performance management process. 
The employer’s records showed it raised numerous issues with the employee regarding her behaviour including lateness, health and safety issues, leaving employees and families waiting in the carpark, gossiping, not wearing the correct uniform and failing to provide daily plans. 
Ultimately on the evidence, the FWC found she was not bullied, and the employer did not act inappropriately. Accordingly, there was no constructive dismissal; the employee had just resigned, the FWC found.
In delivering the decision, the deputy president Hamilton noted that, in the context of the employee’s case, performance management discussions can be unpleasant but, “they are common and necessary, and do not constitute bullying or inappropriate conduct”. 
Key lessons for employers 
In this case, the FWC observed it is, “unfortunately easy”, to respond to performance management with counter-allegations of bullying. 
To safeguard against unsubstantiated bullying and harassment claims during performance management processes, employers should maintain best practice by keeping detailed records and notes when transitioning an employee onto a PIP.  
Should a bullying case arise from a disgruntled employee, evidence about the performance issues in question will be crucial in demonstrating the PIP was reasonable and warranted in the circumstances.
Before engaging in a performance management process, employers should consider the following questions:
  • What are the performance issues being measured against?  
  • Has the employee been given a reasonable opportunity to respond and improve on the performance issues?  
  • Is the performance management unambiguous in terms of what is required? 
Being prepared to engage in performance management is key. This case illustrates that employers should not be apprehensive of possible claims if the reasons for performance management are genuine, appropriate and well documented.  
The reasoning in the decision of this particular case is not new. It is consistent with earlier decisions regarding performance management and counterclaims, including Amie Mac v Bank of Queensland Limited.  
In that case, the employee was placed on a PIP, in response to which she lodged an application with the Fair Work Commission for an order to stop bullying. The FWC found that placing her on the improvement plan was not unreasonable given the shortcomings in her performance, which had been brought to her attention over a long period of time.
These cases demonstrate that it’s crucial for employers to have transparent and reasonable performance management policies and processes, and accurate records of such processes that can be used to justify the performance management process for particular employees. 
(Note: For further information on workplace ethics in our Asia Pacific Employment Law and Singapore Hands on Guide - HR Manager subscriptionscontact us at (Singapore)).

Monday, 10 August 2020

Emotional intelligence – valuable skill to create a harmonious workplace

By Kavitha Kesavan (Content Management Analyst)

Emotional intelligence (EI) is the ability to be smart with emotions as it plays an essential part in fostering positive working relationships in an organization. IQ will get an employee hired, but EI is the ability to interact effectively while managing their own emotions and others’ emotions that will help someone move up the career ladder and determine success in life.  Individuals communicate better, reduce their anxiety and stress, avoid conflicts, improve relationships, empathize with others, and effectively overcome life’s challenges with high level of EI.
An interesting question and answer by Daniel Goleman is extracted from on social skills.

Q: Having good social skills is another component of EQ, but does that mean people who are shy or introverted don’t have as high an EQ? Again, how can one improve social skills?
Social competence takes many forms – it’s more than just being chatty. These abilities range from being able to tune into another person’s feelings and understand how they think about things, to being a great collaborator and team player, to expertise at negotiation. All these skills are learned in life. We can improve on any of them we care about, but it takes time, effort, and perseverance. It helps to have a model, someone who embodies the skill we want to improve. But we also need to practice whenever a naturally occurring opportunity arises – and it may be listening to a teenager, not just a moment at work.

Daniel Goleman, psychologist and author of the best-selling book Emotional Intelligence, established the importance of EI to business leadership and defined five main qualities that make up EI.

Self-awareness is the ability to recognize and understand one’s own emotions and moods and know how this can impact ourselves, others, and our environment. Strong self-awareness means having a clear understanding of each own’s strengths and weakness and operating with humility and kindness.

Employees with low level of EI often demonstrate direct their mood swings to certain colleagues and employees with high level of EI will be able to understand their colleagues’ emotions and will be able to accept and accommodate accordingly. This may cause conflict and uneasiness in a workplace if the employees with low EI are not willing to seek ways to change their habits as it is difficult to work with such colleagues. Speaking out with a trusted people who will be able to help the employees and attending motivational courses will be to assist employees who are keen in the journey of creating a high EI workplace.

Daniel Goleman said, “When emotions are running high, they certainly cannot be ignored – but they can be carefully managed. This is called self-regulation, and it’s the quality of EI that liberates us from living like hostages to our impulses.” Leaders demonstrating EI will keep their worst impulses and distressing emotions under control and remain stay calm and effective in the most challenging times, such as during the COVID-19 pandemic. They will be able to understand the stress that employees face on a daily basis in global, complex, and high-pressured work environments. An approachable leader with self-reflection will be able to retain talents at workplace as they will comfortable and motivated to work with an emotionally balanced leader and environment.

Self-motivated people have a passion to work with extremely high standards for the quality and pursue goals with persistence. They are not solely motivated by money or titles, but find the motivation within themselves. A highly EI team will help improve productivity of the workplace tremendously as they have a personal drive to improve and achieve, committed to goals, take initiative to complete a task, and readiness to act on opportunities, and optimism and resilience.
Apart from self-motivation, EI also includes on how we motivate others in a team. People with positive energy and vibes often inspire others to be super motivated, especially during a challenging situation. This will help retaining good employees, and creating a sense of loyalty which means they are more likely to work harder for employers.

Psychologist Abraham Maslow’s Hierarchy of Needs Theory is relevant in identifying factors essential for employee motivation. Usually a person beginning their career will be very concerned with physiological needs such as adequate wages and security needs to fulfill the basic need for food, water and shelter etc. Workplace hazards should be addressed and resolved immediately to ensure employee’s safety is guaranteed and they do not feel threatened.

Employees desire to work in an environment where they are accepted in the organization and have some interaction with others. Therefore, creating a workplace that harbors opportunities for participation and interaction with others to promote a sense of belongingness is encouraged.

The need for appreciation and respect is another important element for motivation.  A strong level of self-esteem can make you feel better and gives a boost to your confidence that can make you feel empowered and perhaps, even improve your relationships at workplace. Meaningful job title, job perks, awards, a nice office, business cards, workspace, etc. are also important to an employee’s esteem.

Self-actualized people seek fulfillment and change through individual development. Self-actualized employees have leadership traits and are always prepared for new enhancements and challenges in relation to their job and are prepared to move out of their comfort zone. Self-actualized people are humble, not disturbed by small matters and are able to accept their flaws for growth.

Empathy is the capacity to feel compassion for others, put yourself in their shoes and have an understanding to help them in times of need. Offering a genuine response to people’s concerns and connecting with them will be able to retain talents at workplace. Allowing flexible working arrangements for employees that need to care for kids or elderly parents is an encouraged approach.
Employees are much more likely to work smoothly with a friendly face versus someone that’s cold or unapproachable. For instance, if a new co-worker is having trouble adhering to a particular workplace culture or policy, co-workers tend to assume that they are being negligent or otherwise aloof. However, chances are they require time to adapt to the new culture. Co-workers with high level of EI will give the new hire the benefit of the doubt, respect their way of getting adjusted to the new culture and make them feel comfortable in the workplace before passing judgment on their behavior in the office. Practicing patience with your co-workers is a key to demonstrate empathy.

Social skills
Social skills are the ability to interact with others that are considered as fundamental to human development (Odom et al. 1992).  Good relationships at workplace will help people to get along well with others and help to perform better at jobs as they will feel comfortable approaching their co-worker for a discussion. When you show respect for others by being polite and using good manners in the workplace, people will show respect for you. Active listening which means being fully engaged while listening to someone talk also represent a good social skill.

Gossiping is definitely NOT part of strong social skills even though gossipmongers tend to be “friendly” to get their message through to lower a colleague’s reputation in the eyes of other colleagues due to their jealousy or insecurity. Gossipmongers are indisputable cancer in the workplace.  Workplace gossip leads to attrition due to good employees leaving the company because of an unhealthy work environment. Gossiping tends to erode morale, hurt feelings and reputations, lowers productivity and creates divisiveness among employees as people take sides. A rule of thumb to identify gossips would be, “if you would not be saying that about me in my presence, then it should be avoided.” Warning or terminating a gossipmonger acts a deterrence to other employees to respect other co-workers and to keep the positive vibes ongoing.

A workplace with high EI culture encourages retention of employees, loyalty and improved work performance as a happy and healthy workplace environment is highly beneficial for employees’ productivity and profitability of organizations.

(Note: For further information on workplace ethics in our Asia Pacific Employment Law and Singapore Hands on Guide - HR Manager subscriptionscontact us at (Singapore)).

Monday, 3 August 2020

Guide on Information Technology Services

The Royal Malaysian Customs Department published a guide on information technology services. This guide seeks to assist taxpayers to understand the service tax treatment on information technology services. 
The guide illustrates the following:
  • • imposition and scope of tax
  • • terminology
  • • general operations of the industry and overview of information technology services
  • • charging of service tax
  • • service tax treatment on information technology services
  • • exemption from payment of service tax (business-to-business exemption)
  • • treatment on imported taxable services
  • • responsibility of a registered person

Lochana Nanthacumar
Content Management Analyst
Wolters Kluwer Malaysia

(Note: For further information about our Sales and Service Tax (SST) subscription, contact us at (Malaysia).

Friday, 10 July 2020

2021 Budget

Our Finance Minister, Tengku Datuk Seri Zafrul Tengku Abdul Aziz announced that our 2021 budget will consist of four broad themes:-

  • Caring for the people
  • Steering the economy
  • Sustainable living
  • Enhancing public service delivery

Caring for the people

This theme will prominently feature education, employment, social protection and social mobility. The government wants to build new foundations for our economic and and social systems to create a fairer and more wholesome future. 

Steering the economy

This theme will consist ensuring gross domestic product (GDP) growth for 2021, increasing foreign direct investment (FDI) and consumer confidence. 

Sustainable living

Despite the Covid-19 pandemic, the momentum for sustainable investing had not slow down. In fact, companies that embraced and practised environmental, social and governance (ESG) performed better. In Malaysia, our current ESG related incentives include:
  • Tax exemptions for management fee incomes for fund management companies managing socially responsible investing (SRI) funds and syariah compliant funds
  • The extension of tax deduction for the cost of issuing SRI sukuk
  • The extension of the green investment tax allowance (GITA)
  • Green income tax exemption (GITE)

Enhancing public service delivery 

Under this scheme, the government intends to support the people and businesses and become more outcome-focused in a targeted manner. Tengku Zafrul said the measures introduced should be impacting live and livelihoods in a meaningful way and not just about the amount of funds disbursed. 

The upcoming budget is scheduled to be tabled on 6 November 2020. We'll just have to wait patiently until then! 

Lochana Nanthacumar
Content Management Analyst
Wolters Kluwer Malaysia

Upskilling your practice for the new new normal in accountancy

Firms already on the path to digitalisation will have seen this period of prolonged remote working and online collaboration as justificatio...