Gemma O’Connor outlines practical tips for maintaining employee connections during illness-related absences Keeping in contact with an employee who is off work due to illness can be a delicate balancing act. On the one hand, you need to know when the employee will be fit to resume work. Conversely, you don’t want the employee to feel pressure to return to work before they’re better. If an employee is absent for an extended spell, they may feel out of touch and undervalued if you don’t reach out to see how they are recovering. As this can be a sensitive issue, here are some ground rules around contacting staff who are absent through illness. Making contact It is usually the responsibility of line managers to keep in regular contact with any of their staff who are absent. They typically know the individual best and are equipped to discuss sensitive issues. If it’s a minor illness likely to end within five days, contact is not usually necessary. No matter the duration of the absence, however, a return-to-work interview should be carried out to update people about the status of their work. This meeting also gives your employee a private opportunity to discuss concerns about their health or other matters affecting their performance or attendance. In the case of an employee’s sudden or traumatic illness, communicate your sympathies and use your discretion until a firm diagnosis is made. Call vs text Once you have a diagnosis and time has passed, you will want to contact the employee for further information about their health and return to work. All contact about an illness-related absence is typically by phone. Some employees might prefer to text. To give them time to prepare for a call, managers should send a message to set up a suitable time for a conversation that works for the employee. The discussion The call must focus only on the employee’s health and return to work. Before you pick up the phone, consider what organisational matters need to be in place before the employee returns to work (for example, if a temporary employee has been put in place, will a handover be required, etc.) or what support the employee might need to encourage a speedier return. It’s important not to make assumptions about the employee’s situation. Remember to listen and be flexible and consistent. Recovery times for the same condition can vary significantly from person to person. Do not mention the workload being taken on by other people or strained resources because of their absence. Once you get an absent employee on the phone, ask them how they are getting on and explain it’s a routine call to see how they are and when they will likely be well enough to return to work. If the employee makes it clear they don’t want to talk, remain polite and end the call. Keep records of conversations Keep a note of your conversation with the absent employee. If any subsequent claims arise from the employee’s absence, you must have a paper trail supporting your management of the situation. Ongoing assistance If the employee’s absence is stress-related, try to find out if it’s connected in any way to the employee’s job, conflict with a colleague or some other workplace concern and address any issues when the employee returns to work. Direct the employee to the Employee Assistance Programme if you think a confidential third-party discussion with a counsellor will help. Gemma O’Connor is Head of Service at Peninsula Ireland

With Budget Day approaching, Tom Woods outlines his recommendations for ensuring this year’s measures support social and economic progress With Budget 2024 just two weeks away, Ireland is experiencing mixed economic fortunes. On the positive side, near full employment and significant exchequer receipts would suggest that the Government has an unprecedented range of policy choices to consider. Nevertheless, the economy is also facing constraints. Inflation and interest rates offer limited room for manoeuvre, making selecting the right policy choices much more difficult. Housing KPMG suggests introducing a new low VAT rate on the sale of new builds to help with the affordability of purchasing a new home. We also support the reintroduction of mortgage interest relief to help homeowners with rising interest rates and growing mortgage repayments. We recommend that the taxation of professional landlords be reformed to put them on a similar footing to trading businesses. This would help to attract and retain more landlords and boost the supply of housing stock in the rental market. Reintroducing a controlled and targeted Section 23-type rented residential relief (tax relief applying to rented residential property in a tax incentive area) would also promote housing investment in less sought-after areas. The workforce As a small, open economy, our successful tax policy has helped make Ireland a location of choice for multinational business. As a country at close to full employment, we need an attractive personal tax regime to keep and grow mobile talent to support the growth of domestic and international businesses in Ireland. There is a range of budgetary measures that would help us in this regard, including the widening of the personal tax bands and credits, consideration of a new intermediate tax rate of, say, 30 percent, and the automatic indexation of credits and bands to help dampen the impact of inflation and protect the value of wages. The taxation of share-based remuneration could also be simplified, and we would like to see some improvements to the Special Assignee Relief Programme (SARP). Innovation and entrepreneurship The impact of foreign direct investment (FDI) on the Irish economy can’t be overstated. However, the ongoing changes to the international tax landscape emphasise the importance of having the most enticing regime within the new rules. As mentioned above, an inviting personal tax regime will become more critical, as will having an appealing research and development (R&D) regime to promote and foster more innovation. Several measures could be introduced to promote more innovation, including an upfront entitlement to cash refunds of R&D tax credits for smaller businesses. The R&D tax credit of 25 percent could be improved to either 30 percent or 35 percent to make it more attractive internationally. Moreover, the rules and the application process to qualify for this credit should be simplified. Other jurisdictions continue to refine and improve their R&D offering, so it has never been more important for Ireland’s regime to be as inviting as possible. International changes also underscore the need to support the growth of the domestic sector.  We have made several recommendations to support SMEs. These include introducing a new 20 percent capital gains tax (CGT) rate on the sale of shares in SMEs and some improvements to entrepreneurs’ relief to promote investment in SMEs. We advocate simplifying the rules underpinning the Employment Incentive Investment Scheme (EIIS) to make it more accessible and easier for businesses to raise capital. We also propose that the standard income tax rate of 20 percent be applied to dividends paid by SMEs. This should encourage promoters of SMEs to remain committed to growing their business and enable companies of scale to emerge from the domestic SME sector without the need to sell down equity. Climate Ireland’s ambitious climate goals will present challenges and opportunities for individuals and businesses. Several tax supports could be considered to help Ireland achieve its climate goals. These include measures to promote private finance for green investments via ESG bonds and pension funds. We also believe that tax measures could be introduced to help accelerate the move to electric and hybrid vehicles and support the agricultural sector in its transition to more sustainable practices. Inflation While the exchequer receipts are in rude health currently, this revenue may be vulnerable in the future, and a measured approach will be needed when deploying the available resources. While there is potential for some measures to impact inflation, the significant benefits of achieving policy objectives need to be weighed up against their inflationary impact. The measures unveiled in the forthcoming budget will signal the Government’s direction of travel across many issues. The good news is the resources are there to help sustain our social and economic progress. Tom Woods is Head of Tax at KPMG

Shadow boards can unlock innovation, bridge generational divides and boost profits. Stephen Conmy explains why Many businesses struggle with two seemingly unrelated issues: disengaged younger employees and a lack of response among senior executives to shifting market trends. Some companies have tackled these problems by creating a “shadow board” – a group of non-executive employees who work with senior executives on strategic initiatives so the organisation can gain insights from the younger generation while broadening the view of senior executives. The specific roles, responsibilities and authority of a shadow board can vary widely depending on the organisation and its goals, however. So what exactly is a shadow board? Generational perspective A shadow board is typically sponsored by the CEO and consists of nine to thirteen younger people (either millennials or Gen Z) from a cross-section of the business whose primary purpose is to provide insight, feedback and ideas to senior decision-makers in the company, representing their generation’s perspective. Members of the shadow board learn about the company’s strategy and decisions so that they can share with their peers and network. The shadow board at work Harvard Business Review (HBR) reported that when Gucci created a shadow board of younger employees, its profits soared. By contrast, when Prada didn’t pay attention to the creative input of its younger employees and failed to recognise the growing power of digital influencers, its profits fell. The tale of these two fashion giants is a valuable lesson for all companies regarding the potential creative energy of a shadow board. As reported by HBR, in the past, Prada had high margins, a legendarily creative director and good growth prospects. Since 2014, however, sales have declined. In 2017, the company admitted that it had “been slow in realising the importance of digital channels and online influencers disrupting the industry”.  Meanwhile, during the same period, Gucci created a shadow board.  Gucci’s shadow board is made up of millennials, and in 2015, met regularly with senior management. The shadow board’s insights have “served as a wake-up call for the executives”, and Gucci’s sales grew by 136 percent. This growth was primarily driven by the success of both its internet and digital strategies.  In the same period, Prada’s sales dropped by 11.5 percent.  Types of shadow boards There are three different types of shadow boards: Developmental shadow board Shadow boards are used by certain businesses to prepare and promote younger or less-experienced staff for future leadership positions.  A shadow board, in this context, is made up of people who do not have formal authority inside the organisation but participate in board-like conversations to provide new perspectives, develop novel ideas or gain experience in board-level decision-making.  It’s a learning experience for these people, as well as a method for the organisation to gain diverse perspectives. Checks and balances shadow board In other situations, a shadow board might act as a separate, unofficial group that reviews and critiques the decisions of the official board of directors. It can offer alternative perspectives or point out potential flaws in the board’s decisions. This structure is less common and can sometimes arise in activist or oversight situations. Perspective shadow board Especially in larger or more complex organisations, a shadow board can be formed to offer viewpoints from different parts of the company or from different stakeholder groups. For instance, a non-profit might have a shadow board made up of the people it serves rather than employees. Mutually beneficial arrangement Shadow boards provide younger workers with the visibility and access they desire, which can often lead to significant career advancement. Notably, the impact and insights of the shadow board can drive valuable offshoots more senior executives might otherwise miss. Not only is a shadow board beneficial to both the members and its organisation, it can also contribute significantly to effective governance, innovation and leadership succession planning. Stephen Conmy is Head of Content at the Corporate Governance Institute

In the face of high inflation and looming challenges, Budget 2024 should focus on supporting Irish SMEs, writes Neil Hughes As we look ahead to 2024, there remains much to be optimistic about. Despite high inflation, the latest Azets SME Pulse Survey reveals that fewer than one in five SME leaders anticipates a decrease in revenue and profits this year. This points towards the positivity that surrounds the future of SMEs. It’s not the time to be complacent, however. Challenges lie ahead. Rising prices are putting a squeeze on already tight margins while many businesses are facing difficulties in attracting and retaining talented people. Employing more than a million people and accounting for two-thirds of firms in the private sector, SMEs are the backbone of the Irish economy, and this group should be a major consideration for Government in Budget 2024. SME Innovation Fund We propose the Government set aside €2 billion to establish an SME Innovation Fund, so Irish SMEs can harness the opportunities of the twin digital and green transitions. Putting aside €2 billion from the recent record tax take, taken in conjunction with other measures, could provide an important step in diversifying Ireland’s economic model and ensure that SMEs are nurtured and can thrive long into the future. National minimum wage SMEs across Ireland are concerned with the increasing cost of doing business. We recommend limiting any increase in the national minimum wage next year to the rate of inflation prevailing on the date of the Budget rather than the 12 percent increase recommended by the Low Pay Commission, which would place a significant burden on SMEs. SME Talent Taskforce We urge Government to consider the creation of an SME Talent Taskforce to address the significant challenges facing SMEs in attracting and retaining talented people within the domestic economy. Featuring representatives of Government, Enterprise Ireland, Local Enterprise Offices, employment bodies and the SME sector, it would be tasked with developing a dedicated roadmap to address bottlenecks in the labour market. Bringing together a new SME Talent Taskforce would help ensure that SMEs have a level playing field in attracting and retaining talented people and help them to succeed in a tight labour market. These measures should help SMEs ease the rising cost of doing business and staff shortages, as well as develop sustainable firms. Neil Hughes is the Managing Director of Azets Ireland

The ‘social’ facet of ESG is gaining more prominence with the evolution of gender pay gap rules, consumer trends and employee priorities, writes Doone O’Doherty The ‘social’ elements of environmental, social and governance (ESG) are rising in prominence, having played a secondary role to the environmental and governance pillars for some time. This lack of focus is partly because environmental and governance issues are much more clearly defined, and regulations in these areas are better developed – but things are changing. Local gender pay gap reporting regulations and the EU Pay Transparency Directive are game-changers. These, coupled with changing consumer preferences and employee attitudes, are prompting companies to increase their focus on social issues. The ‘S’ and tax contributions The social pillar of ESG looks at an organisation’s contribution to societal fairness. Total tax contributions are key in this regard, as tax is a key indicator of an organisation’s contribution to society. While the media often focuses on the level of corporation tax earned by the State, it is important to remember that companies are responsible for collecting income taxes via the PAYE system. In 2022, PAYE income tax and the universal social charge (USC) amounted to €25.46 billion. This equates to 30 percent of total Exchequer receipts. In addition, by paying employers’ PRSI (11.05%), employers are a significant contributor to the Social Insurance Fund, which funds social welfare benefits and the State pension. These are important components of an employer’s role in contributing to society via the tax system. This can increase trust in the market and promote an organisation’s overall purpose and values. The ‘S’ and pay equity When it comes to ESG and pay, the focus tends to be on linking executive pay to ESG goals. However, through an employment lens, an ESG strategy isn’t complete unless it addresses issues relating to all employees and supports the growth of a truly diverse workforce that is treated fairly, paid equitably and without bias. Equal pay In Ireland, equal pay provisions are contained in the Employment Equality Acts 1998 to 2021. Under this legislation, an employer is prohibited from paying an employee less (either directly or indirectly) in the same employment doing ‘like work’ on nine different grounds of discrimination. Although an organisation may be fully committed to equal pay, businesses must review their pay systems and consider carrying out an equal pay review to highlight issues they may not be aware of. If there are equal pay gaps, organisations must explain why. If no reasonable explanation can be found, steps must be taken to close the gaps. Gender pay gap Even if employers comply with equal pay obligations, they may still have a gender pay gap. Our analysis of 500 of the country’s largest employers that published gender pay gap reports in December 2022 found a mean gender pay gap of 12.6 percent. Firms must file new reports in December 2023 based on their situation in June. Progress in closing the gap will require a concerted effort that is enabled by HR, but led by business leaders, to improve the representation of women in their businesses. Pay transparency While many organisations already monitor pay equity, the EU Pay Transparency Directive – which must be transposed into national law by 2026 – introduces additional pay transparency measures. Key features of the Directive include: Recruitment: an obligation on employers to provide information concerning pay levels as part of the recruitment process and a prohibition to prevent organisations from asking candidates about their current or historic pay. Pay philosophy: a requirement for employers with more than 50 workers to share information on the criteria used to determine pay levels and progression. Pay information: a right for workers to request information on the average pay level split by sex for workers doing the same work or work of equal value. The ‘S’ and worker classification Spurred by COVID-19, on-demand labour platforms have grown. These offer new job opportunities for workers and convenient, more affordable services for consumers. The gig economy has become a hot topic in many societal and political debates. The debate primarily focuses on the workers’ working conditions and social security status. In Ireland, there are many ways to work and operate a business. Specific legislative protections for workers apply to each type of employment. For employers, it is important to ensure workers are correctly classified in a way that matches the reality of the relationship between the worker and the business. The misclassification of an individual can impact tax, social security and employment law rights and obligations. It can also lead to reputational damage if a company is perceived as treating workers inequitably. Acting as responsible corporate citizens With more focus on the social element of ESG, employers must make the following a priority for their organisation: Understand what legislation requires and the financial and reputational implications of getting it wrong. Ensure that their strategy, processes and systems around the changing regulations that underpin fair pay and workers’ rights are robust and accurate. Validate their organisation’s ability to produce the necessary statistical data to ensure compliance with the legislation. And if they cannot, identify the gaps. Employers should also begin crafting the narrative to explain how they support social progress – treating employees fairly, driving equality and acting as responsible corporate citizens. Doone O’Doherty is Tax Partner of People & Organisation at PwC

Afraid to negotiate? Ornaith Giblin outlines her top tips to help you overcome your fear and come out on top If negotiating a 10 percent discount on a store-spoilt item in a shop makes you feel uneasy, negotiating a large, complex business deal, asking for a pay raise or haggling with a vendor is probably your worst nightmare. Here are five useful strategies to help get what you want in any negotiation. Define your walkaway point and understand your variables Preparation is king, not only to become comfortable with your demand, but to fully understand and equip yourself with a self-made negotiation toolkit. Work out your lowest or highest walkaway point by asking yourself: when would it become financially unviable to continue the conversation? You should also consider what else you can offer your opposition, perhaps intangible, to get the best deal possible. Is it an introduction to another area of your business? An opportunity to tender for next year’s service agreement? These are your variables, your secret armour in the negotiation process. Own, command and use them. Decide what’s at stake Before going into any negotiation, understand two things: there are people, and then there are problems. Without managing both, you won’t agree to a solution. To negotiate effectively, it is important to distinguish your counterpart's underlying motivations from superficial bluffs. For instance, if you find out that their main motivation is to ensure you buy at least 25 laptops because they know they will cut a profitable deal at that volume, you may find that asking for free additional items is the best way forward. Minimise conflict How many times have you entered into a negotiation that has become tense or has even disintegrated because of personality conflict? Negotiation is outside of (nearly) everyone’s comfort zone, which means that, for most, these conversations are approached with mixed emotions. Add to this, the emotional pressures negotiating may bring to the table (perhaps performance-related), and you have a potential recipe, not just for tension, but also aggression and defensiveness. It is imperative that you go into a negotiation with your feathers unruffled. Be sure to watch your tone, try to build rapport and always be polite. No one has ever had a successful outcome by being rude. Don’t let price win or lose you the war You’re going into a negotiation with a walkaway point based on price, and likewise, your counterpart has come into the conversation from the same viewpoint. If you are both stuck on this walkaway point, you have to ask yourself what can be brought into the mix. If the price can’t be negotiated, what can you ask for as a compromise? If you have already identified what’s of value to the other party, and know what is of value to you, you can let that be your bargaining chip. Understanding your variables and theirs is key to optimising a negotiation situation. Find a win-win solution A wise person once said to me that a good deal is in your head. If you’ve achieved your objectives within your boundaries, and you are happy you’ve agreed to a good deal, then you could class yourself as a winner. However, if you’ve done that by derailing your negotiation counterpart, that’s a win-lose. By not finding a middle ground everyone is happy with, you’ve probably ruined your relationship with your vendor (or boss or organisation), leading to other issues down the line. In business, it’s important to never burn a bridge, and agreeing to a win-win solution is key to building mutually productive partnerships. Ensuring your solution is well-balanced and meets enough of both parties’ expectations is key to making sure you walk away from a negotiation with an actual good deal. If you really negotiate rather than barter with your counterpart, your relationship can produce longer-term mutual gains and a situation that can provide lasting returns for both parties. Ornaith Giblin is a consultant of mid-senior qualified accountants at Barden. You can get more information at Barden.ie