Ever wondered how the financial side of recruitment works? Well, here’s the plain, unvarnished truth. In the past, the fee element of the recruitment process has been shrouded in mystery. The truth is, it’s a relatively simple fee structure that isn’t a million miles from other service industries. But that’s the critical point that often gets missed; when people engage a recruitment firm, some think they’re buying a product but in truth, it’s a service. When you engage a recruiter, you are buying their time and their expertise. The cost structure for this time and expertise is differentiated based on whether the hire is permanent, fixed-term or temporary. Permanent assignments typically command a fee of 20% of base salary; fixed-term assignments command a pro rata fee of roughly 30% of base salary; and temporary assignments generally command a higher fee again as the recruitment firm payrolls the person, seconds them on-site and assumes much of the administration and risk involved with hiring temporary staff. This is all relatively clear cut, but the process can become confusing when the issue of rebates arise. A rebate is a partial refund and is generally discussed when a recruiter fills a position for a client, but the new hire doesn’t work out. Where the recruiter has made a strong recommendation or the new hire has conducted themselves unprofessionally, then there is certainly a case for a rebate if the new hire failed to meet the basic and stated expectations of the hiring manager, as outlined in the job specification. Where the candidate was driven out of the firm by an aggressive corporate culture or by being put on reception, for example, the responsibility for the new hire’s exit lies with the company as opposed to the recruitment firm who recommended him or her. In such cases, the hiring manager must assume responsibility for the departure - not the recruiter, as there was nothing wrong with the service provided. The best person for the job? Hiring managers also need to understand the link between the nature of the role and the talent available. Making a permanent hire is like buying a car – you can build it to any specification you like. If you’re renting, on the other hand, your options are limited to whatever is in the carpark. It’s a crass analogy, but the reality is simple – when hiring for a fixed-term or temporary vacancy, hiring managers should understand that they will get the best available person, not the best person.

As the recruitment industry continues to evolve, technology plays an increasingly influential role.As with any industry, recruitment is in a constant state of evolution. However, it is hindered by hiring managers’ tendency to see it as a transactional process as opposed to a strategic alliance. While the best recruitment firms work hard to instil this strategic mindset, there are a number of trends that will impact how hiring managers and their recruitment consultants will conduct the hiring process in the future.1. Candidate-driven job market Candidates are now firmly in the driving seat due to a shortage of talent to meet the demand for suitably qualified Chartered Accountants, particularly at the junior and mid-career level. To attract top talent, hiring managers must, therefore, have a stellar brand in the marketplace and be willing to act when the right candidate comes along. This candidate-driven market will also lead to salary inflation in the months and years ahead while intrinsic reward – how people feel about the work they do – will become an increasingly important differentiator.2. SMEs take the fight to MNCs With multinational corporations hiring vast amounts of Chartered Accountants, small- and medium-sized enterprises (SMEs) will be forced to increase their attractiveness to potential candidates. This increased competition will pose a challenge for all entities, but will ultimately lead to a stronger finance market as candidates’ preferences will be increasingly taken into account. This reality once again points to the importance of a strong employer brand and the need for companies to adopt a flexible and inclusive approach to their working environment. Those who expect candidates to conform to out-dated or rigid work practices will find it increasingly difficult to attract and retain the talent they need to succeed.3. Artificial intelligence gains tractionAs the debate about the future of artificial intelligence (AI) continues, progressive firms are already incorporating it into the workplace while adding to their headcount. The benefit of AI in this sense is the automation of mundane, repetitive tasks and the refocusing of human capital on value-add activities. In truth, the automation of low-value activity has been happening for years, but technology will facilitate the acceleration of this trend. It will also mean that finance professionals will need to be IT-aware and systems savvy as they will act as the conduit for information to the wider business.4. The partnership processTo elaborate on the previous point, finance professionals will become increasingly integrated in the wider business. The concept of the ‘business partner’ in finance has been around for some time, but the finance department is now seen as a key ally in the development and execution of strategy. In this context, hiring managers will need to look beyond traditional technical skills and also hire for softer skills such as communication skills, presentation skills and project management experience. In many instances, finance professionals will be relied upon to interpret the data, not just generate it, and join the strategy conversation with the wider business.While these are some of the key trends shaping the future of the recruitment market, the fundamentals remain the same – to hire the top talent, you need a strong employer brand that speaks to the intrinsic needs of candidates. You also need to act when the right candidate comes along and go in with your best reasonable offer.If hiring managers get these fundamentals right, they will be well-positioned to protect themselves from the threats – and capitalise on the opportunities – that change will ultimately bring. You can read this and more in the Accountancy Ireland and Barden Hiring Guide.

People, not processes, are the key to onboarding success. To help your new hires settle in quickly, follow these simple steps. For an employee, a new job means a rare opportunity to  make a fresh start. People often join companies with enthusiasm and ambition, but if your induction process consists of signing forms and reading business procedures, you are probably missing a critical opportunity to capitalise on this new energy. While all companies will have certain documentary procedures to complete, hiring managers should exert considerable influence on the onboarding process to ensure that it revolves around people – not processes. At the end of day one, your new hire should go home knowing that they made the right decision and the best way to achieve this is to introduce them to the organisation through colleagues at all levels. Now, this doesn’t mean walking the floors and introducing the new hire to 300 people in less than an hour; you should arrange a number of strategic meetings with relevant personnel. This will allow the employee to learn about the organisation through the eyes of other employees and also, help them figure out who can answer their questions on specific subjects. The latter is probably the most important aspect as getting new hires up to speed quickly is an imperative for any organisation. Newcomers are expected to be a drain on productivity in the early stages, as there will inevitably be a learning curve associated with any new role. However, the best hiring managers will take a longer-term view of the induction process and see the value in spending time with their newest team member and socialising him or her into the organisation. In truth, it can take up to 20 weeks for professionals to reach “full productivity” according to research published by Mellon Corporation in 2003, but helping new hires establish a broad network in the early days of their new career can speed up this process considerably while also making the employee feel more at home in their new workplace and better connected to the organisation. In 2005, the respected MIT Sloan Management Review listed five rapid on-boarding myths that can sabotage a firm’s efforts to onboard new hires: the best newcomers can fend for themselves; a massive information dump allows newcomers to obtain what they need; cursory introductions are all that’s needed; first assignments should be small, compact and quickly achievable; and mentors are best for getting newcomers integrated. So here are some rules to follow: never start a new hire when you are unable to spend time with them; facilitate introductions throughout the organisation and encourage the new hire to seek information from their new network as questions arise; walk through key tasks with your new hire and expect them to take longer than usual at the beginning; and involve existing employees in the onboarding process as that will cultivate a firm-wide responsibility for helping newcomers integrate into the firm. And finally, spend time helping your new hire understand the company’s appraisal process; according to Havard Business Review’s Dick Grote, this is one of the most important – and most neglected – onboarding tasks for any hiring manager. You can read this and more in the Accountancy Ireland and Barden Hiring Guide.

Dawn Leane explains what supports organisations can put in place to assist new mothers who are coming back from maternity leave. Navigating maternity leave is a tricky proposition for all concerned. It is the critical period in which women are most likely to reduce their working hours or leave the workforce entirely, leading to negative, long-term consequences for gender pay and equality. According to research conducted by DCU and HR Search, reintegration into the workplace following maternity leave is crucial to a woman's decision on whether or not and when to return to the workforce.   Even the most progressive organisations can fail woman at this time with an ambivalent attitude. For example, while most organisations offer mothers flexibility in their working hours, all too often it is at the expense of opportunities or feeling that their opinion was less valued. What employers fail to recognise is that the experience of motherhood is a significant stage in the course of a woman’s development. Research shows that motherhood encourages a woman to clarify her values and authenticity. For most professional women, it is the first time that they have the space to reflect on their purpose, values and what they want from their career.   Personal reorientation Women’s choices in the intersection of career and motherhood are about much more than paid work and career progress. Studies show that motherhood leads to substantial personal reorientation and behavioural reorganisation in their work and lives in general. With this new perspective, women conduct their own due diligence when it comes to returning to work and are often unwilling to make compromises or stay in roles which don’t deliver significant personal and professional satisfaction. When coupled with a work environment that fails to offer them the same career opportunities as before and an ‘out of sight, out of mind’ culture, women often find that the return is not worth the investment. DCU's research found that how women felt about their roles before they returned to work and after their first day back was significant. For example, of those surveyed, 67% felt enthusiastic about returning while on leave, yet by the end of the first day this figure had dropped to 40%; 72% felt determined while on leave compared to 56% by the end of the first day. Retaining mothers in the workplace In order to retain mothers in the workplace, it is vital that organisations consider carefully how they support the reintegration after maternity leave. The DCU research suggests that such a critical period warrants the same level of investment as onboarding programmes for new employees. Some organisations have coaching and mentoring programmes specifically for women at this juncture in their career. Initiatives which make it easier for women to return to work includes making sure to keep them informed while they’re on leave. Offering women the opportunity to be kept abreast of news helps to overcome the disconnect that they can feel at this time. The DCU report suggests an open dialogue approach to a woman's leave, return and settling in period, yet most employers avoid any discussion beyond statutory leave entitlements. Not making assumptions about career/family priorities is paramount. While it might seem counter-intuitive, in my experience of coaching women during this phase, most favour the opportunity to be part of a new project or some form of job enrichment on their return. Most important of all, the report notes that returning to work post-maternity leave significantly impacted on a returnee’s views of her organisation and significantly shaped her future career aspirations. Dawn Leane is Principal Consultant at LeaneLeaders.  

New research carried out by FraudSMART has revealed that over one-third of SMEs have been targeted by a financial fraud scam within the past 12 months and one in 18 of these attempts was successful. Niamh Davenport outlines how SMEs can protect themselves. Emerging technology and improved connectivity have helped SMEs take advantage of new business opportunities, but they have also presented fresh opportunities for fraudsters. The financial fraud experienced by SMEs are still committed by using emails and telephone with phishing emails (72%), vishing (26%) and invoice redirection scams (21%) being the most common. The impact of falling victim to financial fraud can be devastating both financially through lost funds, lost revenue, the cost of any legal action and security upgrades, and non-financial, resulting in a tarnished reputation, loss of trust and low employee morale. Fraudsters are targeting SMEs because they are known to have less security and controls in place. Investing in fraud prevention does not have to be a costly task. Simple processes and procedures, such as verbally confirming new bank account details, can prevent a large payment from getting into the hands of a fraudster who is trying an invoice redirection scam. The same goes for CEO fraud. In these cases, fraudsters will make an email appear legitimate with tactics such as imitating the language used by the CEO or senior executive, or choosing a time when they know the CEO is out of the office on annual leave, making you reluctant to pick up the phone and confirm the email. With vishing, another common scan, fraudsters target a business by phoning and claiming to be your bank, card issuer or service provider. Fraudsters try to extract details about your computer system, business, debit or credit card, PIN number, online banking numbers and passwords. This can then be used to gain access to company bank accounts, carry out transactions or steal personal customer information. Prevention The best chance any company has against being defrauded is prevention. Here are some tips for SMEs. Be informed Ensure employees are fraud aware and understand the controls and procedures in place to prevent fraud. Don’t assume you can trust caller ID. Phone numbers can be spoofed so it looks like a particular company is calling. Fraudsters may already have basic information about you or your business in their possession (e.g. name, address, account details), do not assume a caller is genuine because they have these details. Be alert Be wary of payment requests that are unexpected, irregular or require changes to bank account details, whatever the amount involved. Always exercise caution when forming new relationships with potential customers. Undertake appropriate due diligence. Always check your statements. If you notice any unusual transactions, report them to your bank immediately. Be secure Don’t allow yourself to be rushed. Take your time to do the relevant checks. If a supplier/service provider requests bank account details to be changed, have a verification process in place before making payments. Ensure security and software is regularly updated and maintained using official and reliable software. Niamh Davenport is the Fraud Awareness Manager in Banking & Payments Federation Ireland. FraudSMART’s National Fraud Awareness Week runs from 12-18 November and is focusing on SMEs. To learn more about how you can protect your business, download their brochure Protect Your Business from Fraud on their website www.fraudsmart.ie/business. Simon Delaney will also be explaining five common types of financial fraud scams every day on FraudSMART’s social media channels.

Michael Kavanagh summarises the key points in ESMA’s recently published European common enforcement priorities for 2018 IFRS financial statements.  The European Securities and Markets Authority (ESMA) has issued its annual public statement highlighting the common areas that European national accounting enforcers will be focusing on when reviewing listed companies’ 2018 IFRS financial statements. Why should I care? European enforcers, including IAASA in Ireland and the FRC in the UK, will be required to include the ESMA topics in their examinations of companies’ 2018 financial statements. As such the ESMA statement is essential reading for those within the remit of an EU accounting enforcement regime and could be of interest to all others involved in any aspect of financial reporting. Priorities The layout and style of the ESMA statement are very different to previous years and very focused on the implementation of the new financial reporting standards. Now that the new financial instruments and revenue standards are effective – and with IFRS 16 due soon – ESMA clearly expects companies to deliver the required level of detail and transparency in their 2018 disclosures. There are three 2018 prioritised topics: specific issues related to the application of IFRS 15 Revenue from Contracts with Customers; specific issues related to the application of IFRS 9 Financial Instruments; and disclosure of the expected impact of implementation of IFRS 16 Leases. In addition to the three 2018 prioritised topics, the ESMA statement highlights a number of other financial reporting considerations, namely: Argentina being classified as a hyper-inflationary economy as of 1 July 2018; disclosure of non-financial information with particular focus on environmental and climate change-related matters, and key-performance indicators relating to non-financial policies; specific aspects of the ESMA Guidelines on Alternative Performance Measures (APMs); and disclosures on the impact of Brexit. The detail The Statement goes into considerable detail on the three priorities. Here are some details the preparers should consider. Applying IFRS 15 Identification and satisfaction of performance obligation when assessing revenue recognition patterns. Assessing whether an entity acts as a principal versus an agent. Maximising the use of observable inputs when determining transaction price and how this is allocated to multiple performance obligations. Presentation of contract assets and contract liabilities upon transition. Whether disaggregation of revenue is sufficient to enable users to understand the main drivers in revenue. Whether sufficient information has been disclosed, including more granularity on significant judgements.  Applying IFRS 9 Disclosing the nature and effect of initially applying IFRS 9 per the specific transitional disclosure requirements of IFRS 7 Financial instruments: Disclosures, including:   reclassifications of financial assets and liabilities; and reconciliations of the closing impairment allowances under IAS 39 Financial Instruments: Recognition and Measurement to the opening loss allowances under IFRS 9 New ‘business as usual’ disclosures in IFRS 7 – including new or expanded disclosures about credit risk and hedge accounting. Presentation of interest revenue. There is a specific section dealing with applying IFRS 9 to credit institutions and insurance undertakings/conglomerates.  Disclosures on the impacts of implementing IFRS 16 Entity-specific disclosures including:   imminent changes in accounting policies, transition approach and use of practical expedients;  expected impacts, including quantitative information, which ESMA expects to be known or reasonably estimable; and explaining the differences between the current IAS 17 Leases disclosure of minimum lease payments for operating leases and IFRS 16. For more detail, the ESMA public statement is available here. Michael Kavanagh is a Director in the Department of Professional Practice in KPMG.