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News

The FRC has conducted a review of the assumptions set within Actuarial Standard Technical Memorandum 1 (AS TM1) that are mandated for use in the annual Statutory Money Purchase Illustrations (SMPIs) received by people saving for retirement in defined contribution pension plans. Each year there are over 30 million SMPIs produced in respect of these defined contribution plans. The FRC concluded that no change will be made to the assumptions and that the current version (V 4.2) will remain in force for SMPIs produced in the year beginning 6 April 2020. The main reasons for this conclusion are:   The existing assumptions remain within a reasonable range so that change is not required urgently and there is value in consistency from year to year; The Pensions Dashboard has the support of industry and government. It is progressing and is intended to bring together all pension rights of each person in one place. This has the potential to revolutionise the way that projections are performed and presented in ways that are difficult to predict currently; The Continuous Mortality Investigation (CMI) is anticipating that next year they will issue a new base table for mortality and are looking to increase the flexibility available to users of their mortality tables. It is uncertain what impact this may have on the annuity market in practice; The UK's EU exit continues to remain a source of uncertainty to economic conditions and makes economic and fiscal prediction more difficult and potentially more volatile; and Pensions Freedoms have fundamentally impacted the nature of pensions saving. Annuities are currently much less popular than previously (partially because of the high cost associated with them in low interest times and partially because Pensions Freedoms allow people access to their funds in more immediate ways).  The annuity market has contracted but it is too uncertain to know whether annuities will become popular once more if and when fixed interest yields rise. Given these initiatives and uncertainties, it was concluded that now is not the time to make changes to the AS TM1 assumptions. As such, the current version of AS TM1 (version 4.2) will remain in force until further notice. However, as the above initiatives progress, it will be important for their impact to be reflected in subsequent versions of the pension projection assumptions. The FRC has responsibility to set and maintain the assumptions used to produce the Statutory Money Purchase Illustrations (SMPIs) sent annually to individuals who have Defined Contribution (DC) pension plans. To meet this responsibility FRC reviews the assumptions in AS TM1 which governs these illustrations against the background of current and anticipated economic and demographic experience. In addition, we monitor those assumptions in which providers have a degree of flexibility (for example the choice of accumulation rates to be used in the projection). For more information contact astm1@frc.org.uk. Published: 5 June 2019. Source: Financial Reporting Council.

Jun 05, 2019
Spotlight

Since the turn of this century, the accountancy profession has undergone exponential development and evolution. Not so long ago the stereotypical view (rightly or wrongly) of an accountant was of a dull, old, grey-haired man (not a typo!) crunching the numbers in a back office. Expectations were low; these accountants were not ‘people people’. They probably didn’t interact with customers. They had limited contact with other departments within organisations. Decision-making and the setting of the strategy was not the role of the accountant but of the sales and commercial team, which was the driving force in most organisations. Fast-forward to 2019, and there are some interesting facts concerning Chartered Accountants. Consider this, from the Institute’s 2018 Annual Report: Eight of the top 10 Irish companies have a Chartered Accountant as either CEO or Chief Financial Officer; 41% of the roughly 27,300 members of Chartered Accountants Ireland as at 31 December 2018 were aged 37 or under; 64% of the membership work in business with further analysis of the membership suggesting that roughly 700 are CEOs, 900 are business owners, and 2,800 are directors; and At 31 December 2018, women constituted 41.5% of the membership. Chartered Accountants are business leaders. Accountancy practices are recording unprecedented growth rates in both fees and employee numbers. So, what has happened in the last 20 years that revolutionised our profession and how we are perceived? A few key drivers have changed the skill set of the successful accountant: The impact of technology on record-keeping; The effect of technology on how we do things; The availability of data; and The expectations of clients/stakeholders. The impact of technology on record-keeping It is no secret that technology has changed the nature of accounting. The transition from the manual capture of transactions to the use of computerised application packages is one of the most significant changes in recent years. I remember my first assignment vividly as a trainee accountant. I had to prepare an organisation’s year-end financial statements.  The process went as follows: Record purchase and sales invoices manually onto a paper-based sales and purchases ledger daybook; Record all the payments made during the year by manually writing up all payments in the paper-based payments ledger using the cheque stubs; and Manually prepare a bank reconciliation, and so on and on. I wrote everything in pencil: no typing, no Excel formulas – all manual. One mistake in totting and I had to start over. My trainee days were not all that long ago, and it has been exciting to observe the changes in record-keeping in the intervening years. The accountant has evolved from a data processor to an analyst. Mundane processing no longer consumes his or her time, allowing the accountant to step out of the detail and begin to analyse, interpret, question and provide insights thereby meeting the current expectations of the accountant. While technical ability is still an assumed skill, analytical and problem-solving skills are now a standard requirement on any job description for an accountant both in practice and business. The form of examinations for trainee Chartered Accountants has changed in recent years, particularly at FAE level, to meet this expectation of our qualified accountants. The exams, through case study scenarios, reward students for their ability to apply technical knowledge to given situations and resolve problems identified rather than just regurgitating memorised material.  The effect of technology on how we do things In recent years, there have been significant changes in how we “do” our work (outside of record-keeping, as set out above) with advancements in technology. Basics such as email and social media have enabled easier and quicker communication and information flow. Take the audit profession as an example, which has transformed in the last decade due to an increased focus on technology in audit methodologies or simply as a tool to collate our audit documentation. It is impossible to avoid the phenomena of blockchain, robotic process automation (RPA) and artificial intelligence. All these have begun to change how we do things, but more is to come as these technologies start to unfold and usage gathers pace. RPA, for example, automates high-volume, low-complexity administrative tasks.  The use of RPA will not replace the entire job of the accountant, but it will save time in performing specific basic tasks which, as alluded to earlier, will allow the accountant to concentrate on analysing and interpreting data rather than producing it. The spread of digital technologies and their impact on business has transformed, and will continue to transform, accounting and the competencies that professional accountants require. Accountants will need to be technology-aware and embrace technology as part of their day-to-day work. 57% of those members who completed the Chartered Accountants Leinster Society Annual Salary Survey 2018 believed that automation would have a positive impact on their career. 40% felt that the same was true for artificial intelligence. Judging by these statistics, we possibly have further ‘embracing’ to do. The availability of data With the increased use of technology also comes a vast increase in data. Accountants are now required to decipher large volumes of data promptly and be capable of summarising and presenting that data in an understandable manner for the end user, often non-accountants. Presentation skills are, therefore, another critical capability. Data analytics is now an industry in its own right, with many of the larger accountancy firms employing hundreds of analysts to assist their accountants in analysing and interpreting data. 51% of members who completed the Chartered Accountants Leinster Society Annual Salary Survey 2018 believe big data will have a positive impact on their career. The expectations of clients/stakeholders With the advances in technology and the ever-changing world of business, the expectations from our clients and stakeholders have changed. We are no longer assumed to be in the back office processing but instead on the front line advising and challenging the status quo. Communication and interpersonal skills are no longer ‘nice to have’ qualities. They are now required competencies for successful accountants. The building of relationships with our clients and stakeholders is vital as we make that transition from back-office operatives to front-line advisors. Conclusion Technology will continue to influence the work of accountants into the foreseeable future, and application of existing and emerging technologies will be necessary. Technology should, therefore, be embraced and not seen as a threat. The role of the accountant will continue to be exciting and challenging. Technical ability will become an assumed skill alongside other skills such as analytical skills, problem-solving skills and presentation skills. These will become the ‘must have’ skills for the successful accountant of the future. Brian Murphy is Director, Audit and Assurance, at Deloitte and incoming Chair of Chartered Accountants Ireland Leinster Society.

Jun 03, 2019
Spotlight

Here are the 14 ways Chartered Accountants and the wider profession are likely to evolve into the future. In 1996, chess grandmaster Garry Kasparov was famously beaten by IBM’s supercomputer, ‘Deep Blue’. This event was heralded as the real dawn of the age of artificial intelligence (AI) and the beginning of the eclipse of human intelligence. Kasparov sees it differently. He believes that while the rise of AI heralds a change, this change will not see human intelligence becoming redundant. Instead, AI will “help us to release human creativity. Humans won’t be redundant or replaced; they’ll be promoted.” Kasparov’s vision is one where machines and humans work together to create smarter tools, and where human work will evolve and adapt to open up new careers and industries in fields that are yet to be invented. Although machines won’t replace humans, the impact of technology on the accountancy profession will be significant. Many reports have trumpeted the imminent arrival of new and powerful learning machines that will replace accountants. While accountancy remains one of the occupations liable to disruption, the future is less dramatic with a transformation of the role and impact of accountants more likely than wholesale replacement. Here are some of the changes we can predict. 1. The gig economy The concept of the ‘job’ is fundamentally changing with professional service firms increasingly utilising flexible resources such as contingent workers and freelancers. Platforms such as Upwork.com allow professionals to sell their services to a global audience. According to Forbes, there were 53 million freelancers in the US in 2016. By 2020, this will rise to 50% of workers (this does not mean they will be full-time freelancers, however). 2. No-code AI  Software engineers and data scientist are expensive and in demand, but a new generation of technology is emerging. No-code AI will remove the need for engineers, making AI far more accessible. Some tools, such as Lobe.ai, use simple ‘drag and drop’ interfaces while others require no more technical ability than that needed to create a simple macro. These tools will enable skilled but not specialist users such as accountants to develop fully automated scripts with no coding know-how required.   3. The end of reconciliations  The good news is that the end of reconciliations is in sight with the rise of distributed ledger technology. Blockchain is one such technology and is probably most associated with cryptocurrency. One of blockchain’s most exciting aspects is that it is immutable, meaning a blockchain ledger will be permanent with an unalterable but transparent history of all transactions. Each verified transaction is timestamped and embedded into a ‘block’ of information, cryptographically secured and joined to the chain as the next chronological update. Blockchain’s applications potentially include decentralised digital, secure identity systems; the verification of qualifications through personal ‘skills wallets’ and reliable records of property ownership. Another new application already happening in real estate is tokenisation, which, as the name suggests, is the representation of an asset or equity in token form, which can be fractionally divided and held. A tokenised property would be similar to a real estate investment trust (REIT), but more flexible and low-cost due to the reduction in intermediary fees. 4. No more late night month-ends As processes are automated and systems post data from several sources, consolidate and reconcile it, month-end cycles will become far quicker and more accurate. 5. The end of sample auditing Audits will become more efficient and accurate as the audit of 100% of companies’ financial transactions becomes possible instead of a sample. AI will provide unique insights and a complete view of the financial health of the company, uncover fraud, highlight inefficiencies and provide further value from the audit. 6. Drones and robots  Amazon is already embracing using robots in its warehouses and testing drones for customer deliveries. Power utilities use drones to survey their lines while surveyors use them for mapping terrain. Just this year, PwC used drones during the audit of RWE, a German energy company, to measure stock, including coal reserves at a power station in Wales. 7. From compliance to insight Technology will simplify many processes and augment our human capabilities. Over the next 20 years, there will be less focus on technical skills alone and a higher requirement for critical thinkers and those who can provide insights. Clients will likely prefer to deal with a human over a robot, and Chartered Accountants will have the opportunity to become a financial storyteller by bridging the gap between computers and the business. 8. Real-time, self-service data Cloud technology has made accounting software accessible to non-specialists on any device and in any location. Information is available in a format that most business owners can finally understand. As this becomes the norm, the role of the accountant will be to give peace of mind, to provide reassurance, and to act as a sounding board. He or she will also be someone who understands the capabilities of the technology, can ask the right questions, and can find the right solutions. 9. Lifelong learning will become an imperative Speaking at this year’s Influence conference, Ravin Jesuthasan, a thought leader on the future of work and automation, spoke about the impending changes to work. He said that while “we don’t know what is coming, we need to keep retooling ourselves”. We must change our mindset, he said, as the old model of ‘learn, do, retire’ is replaced by ‘learn, do, learn, do – repeat’. In this situation, lifelong learning is no longer optional; it will be necessary to remain relevant and employable.  10. The pyramid is collapsing  The familiar pyramid-shaped organisational structure will change. Traditional entry-level roles are unlikely to be needed in the same volume as routine tasks become automated. Conversely, the requirement for qualified staff is likely to increase. The challenge for organisations will be balancing these needs: how to train and develop individuals to the required level with fewer entry-level positions. The question for educators and those entering the workforce is how to bridge this gap effectively. 11. Thinking differently  While technical skills will remain crucial, a premium will be placed on soft skills, which are the skills that differentiate us from robots. Emotional intelligence, presentation skills and critical thinking will become even more valuable in the years ahead. 12. Chatbots and decision-making Instead of diving into CHARIOT for technical information, accountants may have a unit on their desk – think Alexa or Google Assistant – which will be there to answer questions instantly. We could also see AI take a role in the review of complex documents so that, rather than spend hours poring over a 500-page contract, a machine will scan a document in seconds and determine whether it contains compliance and risk issues, for example. 13. Planning cycles will contract Speaking at the Influence conference, Valerie Daunt, Human Capital Partner at Deloitte, said: “Long-term plans are gone”. Instead, organisations must be able to change course quickly. To underline this point, Standards and Poor’s recently reported that the average lifecycle of companies is shrinking, with the average lifecycle of companies on the S&P 500 expected to be just 12 years by 2027 – down from 33 years in 1964. 14. The changing nature of the workforce The workforce is fast becoming more diverse, more international and with different values. Today, over 20% of the Irish population was not born in Ireland, and this rises to 33% of the working-age population in Dublin. Attitudes are changing too – one recently published survey found that 60% of workers are willing to take a pay cut to work in an empathetic company, while 35% said they would consider taking a reduction in salary in exchange for more annual leave. It was also reported that 50% of millennials would take a pay cut to work for a company that matches their values and that this cohort values “experiences over stuff”. Joe Carroll is Head of Professional Development at Chartered Accountants Ireland.

Jun 03, 2019
Spotlight

There is a crisis of trust in and about our profession, but it doesn’t have to be an existential crisis writes Lynda Carroll FCA. “It was the best of times; it was the worst of times…” So wrote Charles Dickens in his 1859 novel, A Tale of Two Cities. How apt a quote this is for the world in which we live today, and specifically for the audit and accountancy profession. Are we not in the best of times? Has there ever been a time when we appeared more omniscient and so integrated a part of commercial life, across so broad a spectrum? A time when scale and reach are valued (by us), when cutting-edge is where it’s at (according to ourselves), when ‘brand’ is everything (we convince ourselves) and when it’s cool to wield so much influence and have such a vast array of client opportunity. Everything from the statutory audit to tax to all forms of consultancy – management, organisational, strategic, merger and acquisition, people, procurement, cyber-risk, risk analytics, diversity and inclusion… the product offering suite seems endless; always expanding and intensely competitive. Yet, are we not also in the worst of times? There is a crisis, and it is proliferating; a crisis of trust and confidence in and about our profession. It is pervasive; it is not just something affecting practice, but it is in this area that it is most visible, public and controversial – it affects all in the profession, and it is corrosive. Even scary! Is this an existential crisis, or just another challenging phase? The answer to this big question is quite simple: it depends on which of these options we want it to be. What’s the problem? Let us reflect on some recent developments that have appeared large in the public domain. When an MP tells one of the Big 4 that “I wouldn’t trust you to audit the contents of my fridge”, as a profession, we have a problem. When we read on an almost daily basis about the failure of names like Carillion, Patisserie Valarie, BHS and see the integrity of their auditors called into question, we have a problem. When we see growing pressure from government and regulatory authorities in the UK to fundamentally restructure the accounting profession, to separate audit and consulting, to introduce meaningful competition and long-term changes to the regulation of audits, we have a problem. Why do we have a problem? I think it’s obvious, but let’s call it out. It’s a problem because it’s actually happening. It is of our own making; we have lost sight of the fundamental reason why we exist as a profession, what purpose and values we should have, and because it’s time to wake up. “Physician, heal thyself” or the cure imposed will be far more painful than one that is self- administered. The basis of trust In the ethical standards we have set for ourselves and our failure to meet them, we will find the basis for the current problem. IAASA’s Ethical Standards for Auditors sets out three overarching principles – integrity, objectivity and independence. These principles are the basis for user trust and confidence. Of these, independence is the bedrock upon which maintaining and demonstrating integrity and objectivity may perish. Who decides if the ethical outcomes required by those principles have been met? The answer – an objective, reasonable and informed third party. To this, in the 21st century, you may add the court of public opinion. Failure to demonstrate integrity, objectivity and independence in a clear and unambiguous manner is at the heart of the palpable erosion of trust and public confidence in the profession. How did we get here and why are we not ahead of the debate? Why are we not setting the tone of the discussion? How have we ended up in a reactive or defensive mode? Yet, this is how we appear to be, and appearance is reality in the 21st century. I think it is too easy to say it all got just too big, too multi-disciplinary, too difficult to manage, too many overlaps, too few competitors. It is a bit more fundamental than that – somewhere along the way, we lost connection to why we are here. Financial accounts preparation and audit are not sexy, but they are the reasons we are here.  Audit, let’s be honest, is a statutory obligation, not an elective option – but it is so for very sound reasons. It is a form of assurance to investors and the public at large that someone with a dispassionate eye has taken a look at the business and formed an opinion which it is willing to state publicly. For that opinion to have any value, reputation is fundamental. Reputation is built on sureness of purpose, values and a governance framework that acts to assure the assurance that the auditor can give. Communicating our value So, where to next? In Di Lampedusa’s masterpiece, The Leopard, we are told that in the face of great challenge and turmoil, “if we want things to stay as they are, things will have to change”.  We need a vision for our profession based on a collective review and recommitment to our purpose and values. We should undertake this review by taking back control of the problem, reaching out to a broad constituency of stakeholders to solicit their view on our purpose and what they expect of us. Because not only do we need to recommit, we need to understand what we need to do to re-engage the public positively and begin the journey of reputation repair and rebuild. If we re-establish the purpose and values that support the auditor and accountant, we will find the answer to how firms need to deal with and manage all the other non-audit and accounting services they currently provide. Lead from fundamentals and the answers to all other questions will surely follow – you might not like the answers, but at least you will know what they are. This is important for all in the profession – trust and confidence erosion, as I have said, is not solely a ‘practice’ challenge. We live in a world where awareness and action on environmental sustainability and governance (ESG) are lead indicators of understanding and living a business and a social purpose. We know that millennials are 60–80% (it depends on which survey you choose) more likely than any prior generation to want to invest in, work for and acquire product and services from businesses with strong ESG credentials. Governance is all about ethics, so go figure! We are at the heart of investor and regulatory confidence when preparing and signing off on financial statements, market disclosures, regulatory returns and, as members in practice, we are the fourth line of defence. We need the public to understand the roles we play in each situation – but if we don’t inform them as to what those roles are and how we deliver the outcomes expected, then who will? Too big to succeed? Perhaps it is time to realise that the ‘too big to fail’ mindset that framed the reaction to the banking crises could become the ‘too big to succeed’ reality for multi-disciplinary audit and accountancy firms. The big difference in the case of our profession is that few will shed a tear or seek to bail us out in the event of imminent demise. Looking at ourselves in the mirror in this way will not be easy, but it will be worth it. It is not the default way in which most of us confront a challenge, but if we are to get to a simple answer to the question I asked at the beginning of this article, it is probably the only way. I am reminded of Robert Frost’s wonderful poem, The Road Not Taken, and its final lines: “Two roads diverged in a wood, and I— I took the one less travelled by, And that has made all the difference.” Let’s not make it an existential crisis. Let’s make it another challenging phase and let’s make a difference. Conclusion Finally, I write this article from a personal perspective. I have never practised as an auditor, never been involved in financial accounts preparation or worked as a finance director. However, I am informed by my training in a Big 4 firm, working in financial services, prudential regulation, as an independent non-executive director, and by my enduring curiosity as to the role and purpose of the profession of which I am proud to be a member.   Lynda Carroll FCA is the Head of Capital Allocation & Risk-Based Pricing at AIB. 

Jun 03, 2019
Spotlight

Following Microsoft’s transformational experience, organisations can create a growth mindset culture in five simple steps. In my seven years at Microsoft, I have seen our culture transform. Fundamental to this transformation is the belief in a growth mindset, which starts with the understanding that everyone can grow and develop; that potential is nurtured, not pre-determined; and that anyone can change their mindset. So, what is a growth mindset? Our mindset is the way we think and how we make sense of a situation. Carol Dweck, a Stanford psychologist, researched this area deeply and developed the term “growth mindset”. A growth mindset refers to a belief that understanding and abilities can evolve, and that our attitude and mindset have an incredible influence over our skills and abilities. Those with a growth mindset can push the boundaries of what’s possible and unlock new business and personal progression opportunities by being open to new ways of working. On the other side, a fixed mindset is one that assumes abilities and understanding are determined. Those with a fixed mindset may not believe that intelligence can be enhanced, or believe that “you either have it, or you don’t” when it comes to abilities and talents. What does having a growth mindset look like? People with a growth mindset believe they can develop by learning from others, taking risks, failing fast, but always learning.  They recognise that people may of course have natural talents, but anyone can learn and grow in any area. It doesn’t mean that anyone can become an Olympic athlete or CEO of a Fortune 500 company, but anyone can improve and strengthen their abilities. It is through feedback and learning from our mistakes that we learn and grow. With a fixed mindset, however, mistakes can be viewed as a failure and the person responsible deemed to be no good. People with this mindset like to avoid challenges by staying in their comfort zone, and can feel threatened by the success of others. It is easy to see the difference between the two mindsets outlined in Table 1 when it is black and white. While we can all aspire to have a growth mindset, if we are honest with ourselves, we will recognise that it is easy to slip into a fixed mindset in some situations. Have you ever told yourself that you can’t do something? Whether it relates to going for a new role, developing a new skill or speaking up in a challenging situation, there can often be times when we establish invisible barriers that limit our belief about our potential. Awareness of these self-imposed barriers is the first step in understanding what it is to have a growth mindset. Within the accountancy profession, there may also be a tendency towards fixed mindset thinking. In an article for Accounting WEB entitled “Develop Your Growth Mindset Practice”, Richard Hattersley mentions that accountants are prone to a fixed mindset because of the “tendency to label themselves in a pigeonhole”.  This label is attributable to the fact that a significant portion of the work of accountants is analytical, technical and sometimes routine. As with many industries right now, the accounting profession is entering a time of significant change. New technologies such as robotic process automation, artificial intelligence, data analytics and machine learning are changing the business environment.  The role of the typical accountant is also evolving and changing, and it is more important than ever before to have a growth mindset to transform and continue to be relevant in the future. How to cultivate a growth mindset In Microsoft, some manifestation of the growth mindset is almost always present. It can appear in how we engage with customers, how we interact with our colleagues, how we conduct our meetings, how we take on challenges, how we learn from mistakes and how we give and receive feedback. Having a growth mindset is an integral part of our ongoing cultural transformation, changing how we do things and how we work together to achieve more for our customers and society overall. This transformation has been a journey, however, which has been led by our CEO Satya Nadella and permeated throughout the Microsoft team.  Through this journey, the five tips I would share to encourage a growth mindset culture are: 1. Raise awareness Discuss these mindsets with your teams. Knowledge of these different mindsets is key to understanding your behaviour in certain situations. If someone says that something can’t be done, challenge them to see if they have a fixed mindset on an issue or play devil’s advocate to avoid groupthink. 2. Step out of your comfort zone Seek out new challenges and new opportunities to push yourself beyond your current capabilities. Be curious and embrace these challenges as opportunities to develop and strengthen your abilities. 3. Seek feedback Look for feedback from others and recognise this not as criticism, but as a gift. 4. Learn from your mistakes Reframe setbacks or failures as opportunities to learn. Every successful person has had to deal with setbacks along the way; it is how we view these setbacks that make the difference. Making mistakes leads us to a pathway to mastery.  5. Inspire and be inspired Leaders and managers have a significant role to play in how the growth mindset culture is nurtured within a team or organisation. How you, as a manager, react to your own mistakes or your team’s mistakes is critical. Are you defensive of your mistakes? Do you step back and allow your team to view a mistake as a learning opportunity? Do you ensure that the efforts and learnings of the group are recognised? As we enter times of change, whether political, economic or technological, there can be a focus on strategies to deal with this uncertainty. Nurturing a growth mindset culture can have a profound effect on the outlook of your workforce and therefore, how the chosen strategy is implemented.  How you, your team or your workforce view uncertainty, how you approach new challenges, and how you deal with setbacks are all driven by your mindset and the culture created within your organisation. The importance of the growth mindset culture for accounting professionals, as well as organisations, has never been more critical. As Peter Drucker once said, “culture eats strategy for breakfast”.   Susan O’Reilly FCA is Group Financial Controller, EMEA Operations, at Microsoft.

Jun 03, 2019
Careers

Networking is a discomforting prospect for many, but don’t wait until it’s too late to start.   Experts tell us that strong professional networks are essential to career development. Knowing the key players in your sector and being seen at professional events gives you a competitive edge in today’s fast-paced recruitment market. But there is no denying that for some of us, networking isn’t at the top of our must-do lists. It is awkward, draining and time-consuming. Making small-talk with strangers doesn’t come easy to everyone. Yet, research tells us that the most connected people are also the most successful. Being connected means investing in relationships. When we are happy at work, we tend to disconnect from wider networks. We invest in the relationships that are closest to us. We reconnect to these wider networks when we are thinking of advancing in our career. This is one of the reasons why networking is a discomforting prospect. Networking tends to be something we associate with our time out of the office and with job hunting. Networking when we need something plays tricks with our mind. We are at a psychological disadvantage when we network – we tell ourselves that our colleague’s time is more valuable than ours; we need them more than they need us. There may be some truth in that if we only network when we need a new job or some new connections. So, the best way to think about networking, or the best time to network, is when we don’t need to do it. Cultivating relationships At its simplest, networking is about developing relationships – building, fostering and developing a professional group of colleagues. The important aspect of networking is the fostering and developing piece. If we forget to do this when we are in employment, it becomes even more difficult to reconnect when we want to change career. Individuals cultivate relationships throughout their careers and investing in your professional network when times are good provides benefits when you need them in the future. So, how can you extend and develop your network? Welcome new hires Welcoming new co-workers is the easiest networking task. You have a wealth of information about how your organisation works. Offer some recommendations for local coffee shops and lunch spots. Offer to take your new colleague to lunch in their first week and ask about their experience. It doesn’t need to be more than this. You have met a new colleague and you may have lots in common or very little. If nothing else, you have practised the art of having conversations with strangers. Use LinkedIn  Almost everyone has a LinkedIn page, but most people don’t use it strategically. Update your profile and make it authentic, relevant and compelling. Assume that people will check you out on LinkedIn before talking to you in person. Make direct connections to people with whom you want to network and don’t forget to personalise the invitation. Ask your contacts for personal introductions to their contacts that are relevant to your search. Do lunch Yes, I know you eat lunch every day but how many of those days are you eating alone or with the same friends? Make an effort (say, twice a month for starters) to invite somebody you don’t know very well to join you for a sandwich and a chat. Or, if there is a common lunch area in your workplace, join a conversation and practice your small talk. Networking doesn’t have to evoke fears of warm wine and excruciating conversation, but it does need to be practised and finessed. Professional networks are an important feature of career development. The best way to build and develop them is to make them an ordinary aspect of your professional life, most particularly when you don’t need them. The first step may be as simple as sharing a sandwich with a co-worker.   Dr Annette Clancy is Assistant Professor at UCD School of Art, History and Cultural Policy. Annette’s research focuses on emotions in organisations.

Jun 03, 2019