Thought Leadership articles

‘Employability’ refers to the skills, knowledge, experience and personal qualities needed to gain and maintain fulfilling work during an individual’s career. In this article, Dr Mary E. Collins discusses the importance of employability from an employer’s perspective and provides practical strategies to help organisations focus on the issue, whatever their size. Over the past year, the employment market has experienced extreme volatility. Certain sectors have been hit particularly hard, with tens of thousands of jobs in the hospitality and tourism sector the first to feel the full impact of the COVID-19 restrictions. In other sectors, there has been a spike in job openings and, indeed, an employment boom due to the global pandemic. Research from Glassdoor has shown that coronavirus-related job postings have increased in recent months: government, pharma, healthcare and non-profit sectors in the US have all tripled their hiring efforts in response to the coronavirus outbreak. The trend is similar internationally. In Ireland, we have seen increased job vacancies in health, IT and communications, logistics, procurement and insurance. Professional services employment trends remain stable. One certainty in this dynamic, volatile employment market is that talented people always have choices. In fact, the war for talent heated up in the past year with the explosion in remote working. Many roles that were once limited by geographical location can now be fulfilled from anywhere with decent broadband connectivity. What is ‘employability’? The Institute of Employment Studies in the UK defines employability as the “capacity to move self-sufficiently within the labour market to realise potential through sustainable employment… for the individual, it depends on the knowledge, skills and attributes they possess, the way they use those assets and present them to employers.” Employability is the ability to be employed from three perspectives: Gaining initial employment: the ability to get started in a career, leveraging education, careers advice and so on to ensure one has core, marketable skills. Maintaining employment: the ability to keep a job and make transitions between new roles within the same organisation, adapting to new job requirements. Obtaining new employment: the ability to succeed in the labour market and manage employment transitions between and within different organisations. The business case There is now a strong business case for employers to make explicit commitments to employees about supporting them in becoming, and remaining, employable; that working with the organisation will make them more employable for future roles. We have seen a cultural shift whereby younger generations look to their employers for purpose and meaning in an increasingly unpredictable world. Employers who care about their people’s future employment opportunities demonstrate a commitment to the broader ‘covenant’ between employer and employee. The younger generations in the workplace are generally known as Millennials or Gen Y, who were born between 1980 and 1998, and Centennials or Gen Z, who were born from 1999 onwards. These generations hold the balance of power in recruitment, so employers must be aware of their expectations. A new approach is required to attract, engage, and retain them. This includes the provision of: Good work/life balance; Work arrangements with flexible locations and hours; Clear personal development routes; Clear promotion opportunities; Meaning and purpose in work (making a meaningful contribution to society); Support around personal wellbeing; and Commitment to their employability. Some commentators on the future of work predict that Gen Z will change jobs 15 to 20 times in their careers. Regardless of age, the concept of ‘a job for life’ is practically redundant and most people will hold positions with a variety of employers over the course of their working lives. Increased flexibility in working patterns means people need to be prepared to change jobs. It also means better opportunities. Emerging technologies such as artificial intelligence (AI) will replace many roles, while new roles are emerging that never existed before. Employability should be a core element of your employer brand, defined by CIPD as “a set of attributes and qualities – often intangible – that makes an organisation distinctive, promises a particular kind of employment experience, and appeals to those people who will thrive and perform best in its culture.” The CareerEDGE Framework of Employability Developed by Lorraine Dacre Pool and Peter Sewell in their 2007 article, The Key to Employability: Developing a Practical Model of Graduate Employability, the CareerEDGE Framework of Employability suggests that once individuals develop the essential EDGE components (experience, degree subject knowledge, generic skills, and emotional intelligence), this paves the way for the development of the “higher-order” areas of self-efficacy, self-confidence, and self-esteem that are critical in developing employability. Investing in people’s employability The challenge is for employers to focus on investing in the employability of individuals rather than maintaining roles that could eventually become redundant, thereby prioritising an inclusive and lifelong approach to skills development. Using the CareerEDGE Framework, here are some practical steps for employers to consider. Career development Provide access to mentors in the organisation, as this is an excellent way to support development at all stages of employees’ careers. Have career development conversations at least once a year as part of the performance management process. Seek external opportunities for coaching and mentoring from relevant government agencies, professional bodies, and initiatives (for example, the 30% Club Mentoring Programme to improve the female talent pipeline).  Experience A core part of supporting employability is providing appropriate work experience to support personal and career development. Every role should include some ‘stretch’ assignments, which are work projects that provide growth opportunities and challenge in a supportive way. Where possible, allow employees to work in different parts of the business to gain new and diverse work experience. Degree subject knowledge, understanding and skills In the CareerEDGE Framework, this refers to the knowledge and technical skills a graduate gains from their degree course(s) relevant to their career trajectory, and upon which they can continue to build their employability. Employers must support their staff in their continuous professional development and ensure progression to higher levels of attainment. Opportunities to sponsor and co-fund educational activities should be encouraged as a core element of supporting employability. Generic skills Dacre Pool and Sewell present a set of generic skills that employers expect to have been developed in graduates (see Figure 1). Employers should seek ways for employees to develop in all of these generic skills. It is important to note and record skills development as part of the performance planning process. Emotional intelligence Emotional intelligence (EQ) continues to grow in impact and importance. Daniel Goleman defines it as “the capacity for recognising our own feelings and those of others, for motivating ourselves, and for managing emotions well in ourselves and in our relationships”. Employers can support EQ development in the workplace by ensuring that leaders are role models in terms of self-awareness, managing their emotions, showing empathy, flexibility, and – crucial in these times – demonstrating resilience and optimism. Most leadership development programmes incorporate some element of EQ skills development. Self-assessment profiles, such as the Emotional Capital Report (see www.rochemartin.com), can be useful when working with a coach or mentor to develop these core skills from an early career stage. Dr David Foster, Director of Career Development and Skills at University College Dublin and Director of the UCD Careers Network, takes a holistic view of employability. “We’ve used the CareerEDGE Framework at Careers Network as a model for about five years now, and it’s been great as we aim to enhance students’ self-confidence and self-efficacy in all we do. We feel self-confident people can better unlock their mental energies and abilities to negotiate their personal and professional development, which we think leads to employability.” In conclusion, employability is core to the contemporary covenant between employers and employees and has become an important facet in attracting, developing and retaining talent. Even in recessionary times, talented graduates and professionals have choices, especially in a world that has embraced remote working. Focusing on supporting the employability of employees at all stages of the career lifecycle will greatly add to a positive culture where people want to give their best and stay longer, even if it isn’t a job for life.   Dr Mary E. Collins is Senior Executive Development Specialist at the RCSI Institute of Leadership.

Dr Joanne Murphy distils four common themes from the battlefield to help you lead and manage through the COVID-19 crisis and into an uncertain future. The COVID-19 pandemic is frequently referred to as a ‘war’. We hear about the battle for ventilators and the need for collective action against an invisible enemy. But what does the reality of wartime tell us about managing through, and beyond, a system shock like COVID-19? While there is no rulebook to guide our responses, we do know a great deal about the positive behaviour of leaders in other extreme situations, navigating rapid system-wide change, and facing risk and imminent danger. My research on leaders and managers operating in extremis provides some insight into the leadership behaviours and practices that work best in stressful and complicated environments. The individuals I have spoken to have managed to maintain organisational life and direction in contexts of emergency, violence and disruption. These include police and other ‘blue light’ services, those running businesses and public services in Northern Ireland during The Troubles, entrepreneurs in the Basque country during the ETA campaigns and, most extreme of all, those driving organisational activity in Bosnia during the dreadful siege of Sarajevo. The dynamic nature of these environments is akin to the large-scale systems change we are experiencing as a result of COVID-19, and effective responses require a similar set of leadership skills and attributes. Four common themes emerge from these experiences that will help us think about how to lead and manage in extremis, and which are relevant to both these times and the challenges that lie ahead.   Organisation is everything. Let go of the old to make sense of the new. One leader is not enough. Be courageous. 1. Organisation is everything Many of us will feel that we understand the role of military leadership in conflict, but what do civilian leaders do in war? In 1984, the city of Sarajevo hosted the Winter Olympics, memorable for the triumphal success of British figure skaters Torvill and Dean. Only a few years later, in 1992, the Bosnian war brought the siege of Sarajevo, which lasted 1,425 days – the longest city siege in modern history. Ismet Kumalic, a director in a state company in the former Yugoslavia, lived in the purpose-built ‘Olympic’ suburb of Dobrinja which, on the frontline of Serb shell and sniper fire from the surrounding hills, was quickly isolated. Ismet became the civilian administrator, accountable for keeping 30,000 people alive under daily bombardment, with meagre supplies of food or fuel. During the siege, he and his team achieved the extraordinary, including the development of a 10km tunnel network to allow people to move between buildings and avoid sniper fire, the cultivation of every inch of available land to grow vegetables, and the management of a school and medical unit. While many residents were killed, Ismet reflects with pride that no one died of starvation (though sometimes food was rationed to just 300 calories a day). He has three messages about leadership in such an extreme environment.   The first is about the position of leaders: “In such a situation, you are not that important… you are at the bottom of the pyramid, not the top. You are carrying them on your shoulders.” The second is about management: “Organisation is everything. You cannot succeed without organisation. You must think of everything.” And the third is about decision-making: “You have no time. You have to make decisions. To make decisions without time, you have to be brave.” 2. Let go of the old to make sense of the new  As in more normal organisational contexts, in extreme environments, it is also important to distinguish between leadership and management. Management relates to how an organisation functions, the implementation of plans and objectives, and the maintenance of a ‘steady-state’. Leadership is different. It relates to change, communication and vision. Leaders are ‘pathfinders’, able to articulate a shared vision and understand strategy as a dynamic process that is always under review. During periods of crisis and threat, people look to leaders to take action. This requires those tasked with leadership to make sense of confusing environments and mixed messages from stakeholders. The ability to let go of existing models in the face of change and embrace new ways of making sense of the shifting world around you is a key requirement. Leaders need to be self-aware and avoid clinging on to old rules or ways of doing things. Successful leaders in periods of extreme change become more receptive to input from followers, more likely to integrate their efforts into teams, more approachable, and less intimidating. When stress is heightened, certain qualities and behaviours become essential. They include the ability to prioritise, understanding the significance of role clarity, and effective communication. One police leader, who had been instrumental in the controversial and emotional transition from the Royal Ulster Constabulary to the Police Service of Northern Ireland, said: “Just because you think you have said something, it doesn’t mean that people have heard it. You need to present the message in multiple forms. The more important that message is, the more mediums you use for distribution.”   3. One leader is not enough It is not uncommon to perceive leadership as involving charismatic individuals, superheroes who can lead through adversity and overcome incredible odds to succeed. However, in extremely challenging environments, such individual leaders are rarely enough. Instead, we see the cultivation of social networks of leadership. The Basque city of Bilbao features the Guggenheim Museum, an architectural marvel designed by Frank Gehry. This beautiful building is just one aspect of a much broader strategy to revitalise and reframe Bilbao away from its reputation as being polluted by its industrial heritage and scarred by the violent ETA campaign for independence and the equally ferocious security response of the Spanish state. Economic regeneration in such an environment seems almost hopeless. When those who worked for the reimagining of the region and its economic regeneration reflect on their achievements, they speak about two important requirements. First is the importance of teams of leaders operating collectively, and the capacity to navigate troubled waters together with a set of common objectives. This requires collectivisation of leadership, which can be a challenging approach for many. Second, for the revitalisation of Bilbao, it was the primacy of beauty and aesthetics. Change, especially in the aftermath of extreme adversity, requires hard work and a little bit of luck – but also an understanding that there is more to regeneration than the economy. In this case, the creation of a beautiful and authentic cityscape, with pride in the built and natural environments, provided a core motivational dimension.   4. Courage in the face of fear The COVID-19 pandemic is not just a physical health crisis; it also presents a considerable threat to people’s mental health and wellbeing. Anxiety caused by lockdown and isolation, fear of losing one’s job and economic hardship are all overlaid with the danger of ill-health and mortality associated with the virus itself. Those who have managed businesses during conflict often speak about their fear, and sometimes terror. The spectre of having to deal with paramilitaries on the one hand and the police on the other left many feeling isolated and alone. One businessman commented on his investment in a bar and the early days of the business, “We had a door that squeaked, and I thought, ‘sometime in my life I’m going to work in this bar, and that door will squeak, and my stomach won’t tighten. I’ll not have fear in me’… the first year was just like hell”. At times of extreme stress, it is easy to default to task-based decision-making and forget the human element, which is critical to maintaining personal and organisational resilience. The individual courage required to lead, and to keep leading, in such environments should not be underestimated. At an organisational level, keeping spirits up in the worst of times is also a critical leadership skill, one that is often lost in the chaos of rapid change. Others have framed it differently. Irish diplomats tasked with crafting a workable peace process amid the seemingly intractable Troubles spoke movingly of having “a duty of hope”, an understanding of both professional duty and personal emotional response. However it is conceived, it represents the last pillar of leadership for these challenging times.   Dr Joanne Murphy is Academic Director of the William J. Clinton Leadership Institute at Queen’s University Belfast.

Dr Aideen O’Dochartaigh provides an accountant’s introduction to natural capital. Concepts such as carbon budgets, natural capital, and carbon taxes illustrate the increasing interaction between accounting and environmental issues. While nature and the biodiversity crisis are often overshadowed in public discourse by the climate crisis, awareness of the economic and intrinsic value of natural ecosystems is growing, highlighted by issues such as pollinator loss and the spread of zoonotic diseases like COVID-19. One of the most useful tools to account for the human impact and our dependency on nature is natural capital accounting. This article offers an introduction to the emerging thinking and methodologies in this area, exploring its applications and benefits for organisations and considering how accountants can engage with natural capital accounting.   What is natural capital accounting? Natural capital has its origins in the concept of capital as a stock that can give rise to goods and/or services. In the case of natural capital, the stock is natural resources or ecosystems such as forests, water, grassland or air, while the goods and services (known as ‘ecosystem services’) that flow from the stock include raw materials for production and consumption (fuel or food, for example), the absorption of wastes from production and consumption, and the fundamental life-supporting services provided by nature. Historically, goods and services flowing from ecosystems have been accounted for, or rather not accounted for, as ‘free gifts’ from nature. The depletion of natural capital has, in turn, been accounted for as income (the sale of forestry products recorded as income, for example) with no recording of the loss of the services provided by the forest, such as the absorption of carbon dioxide. Mounting evidence indicates that human activity is increasingly threatening the stability of natural systems and the ability of the earth to provide a safe space for humanity, and economic activity, to flourish. Four of the nine planetary boundaries identified by scientists have now been transgressed due to human activity, including two core boundaries, climate change and biosphere integrity, with significant impact on the stability of earth systems. We must, therefore, rapidly develop tools to account for our interactions with natural capital and incorporate the calculations into decision-making at management and policy levels. Natural capital accounting frameworks have largely been developed at country and company level. At country level, the most widely used framework is the UN System of Environmental-Economic Accounting (SEEA). The SEEA methodology measures the scale of the asset, the condition of the asset, the services flowing from the asset, and the benefits to humans. Four thematic accounts are commonly developed: carbon, biodiversity, water, and land, with the valuation of stocks and flows accounted for in both physical and monetary terms. Multiple research institutions are applying this approach in Ireland through the Irish Natural Capital Accounting for Sustainable Ecosystems (INCASE) project, which is funded by the Environmental Protection Agency.   Corporate natural capital accounting The SEEA methodology translates at organisation level to the corporate natural capital accounting (CNCA) approach. The Natural Capital Coalition has developed the Natural Capital Protocol to offer companies a roadmap for implementing natural capital accounting, which is a useful initial resource for accountants interested in applying CNCA in their organisations. Natural capital accounting interacts with several other reporting frameworks, such as the Global Reporting Initiative (GRI) Guidelines and integrated reporting, and is also directly related to several UN Sustainable Development Goals (SDGs). In practice, corporate natural capital accounting requires the entity to set up accounts for assets, maintenance costs, and physical and monetary flow. A simple illustration of the process and the accounts required is shown by the assessment approach adopted by Northern Ireland Environment Link (see Figure 1). Two reporting statements are generated:   The natural capital balance sheet, which presents the asset values and the related liabilities (i.e. the costs of maintaining the natural capital). The asset value must include both the value accruing to the organisation and the value for the rest of society in terms of ecosystem services. The statement of changes in natural assets, which reports the gain or loss in asset values in the reporting period.   An example of the reporting statements is shown in Figure 2 and a comprehensive guide to CNCA, which includes these statements and examples of all the supporting accounts, is provided by the 2015 EFTEC et al. report cited in the figure. In Ireland, Bord na Móna, Coillte and Bord Iascaigh Mhara already apply this approach to accounting for their peatland, forest and marine assets.     Who should use natural capital accounting? The Natural Capital Coalition stress that their Protocol can be applied to any organisation in any industry, and it is recommended that all entities consider their impacts and dependencies on nature and integrate a nature-centred approach into decision-making. Adopting comprehensive natural capital accounting is typically most relevant in the categories summarised in Figure 3:   Sectors that are directly dependent on and/or own large natural capital assets and have a direct impact on these assets (e.g. fossil fuels, forestry, farming, and fisheries). Sectors where raw materials in the supply chain are directly dependent on, and have a direct impact on, natural capital. For retailers in the food and beverage sector, for example, their supply chains are dependent on natural capital such as fresh water or healthy soil. Sectors that rely directly on infrastructure that requires significant land use and/or with significant impacts on natural capital (e.g. energy, transport, and communications). Sectors that are indirectly dependent on large infrastructure through their supply chains (e.g. the technology sector, which relies on energy-intensive data centres).    Why use natural capital accounting? There is an increasing focus on accountability for environmental and social interactions in the supply chain, and natural capital accounting can help organisations understand where their impacts and dependencies lie. For example, luxury goods group Kering has used natural capital accounting to develop its environmental profit and loss (EP&L) account, which illustrates that 90% of the group’s environmental impact relates to its supply chain, largely through raw material production and processing. More nuanced cost-benefit analyses can also be supported by natural capital accounting. In the Netherlands, for example, analysis of peatlands converted for dairy farming revealed that due to the cost of maintaining the land, plus the cost of controlling carbon emissions and water levels, it was not cost-effective to continue to farm the lands. They will instead be converted back to natural ecosystems. Natural capital accounting completed thoroughly and transparently can support reputation management. However, it is important to ensure that information is communicated transparently and consistently to avoid the risk of ‘greenwashing’. Finally, natural capital accounting can help organisations manage nature-based risks such as supply chain disruption, scarcity of raw materials, and new regulatory requirements. The Task Force on Climate-related Financial Disclosures (TCFD) has developed a framework to support organisations in accounting and reporting on climate-related risks and plans to establish a similar task force on biodiversity-related risks. Table 1 illustrates how accountants can engage with natural capital accounting.   Future directions As natural capital accounting develops, it is important to be cognisant of risks and critiques, and for researchers and practitioners to work to address them. As Kering’s EP&L reveals, many organisations will find that their nature-based impacts and risks are largely associated with the supply chain. To date, however, the potential for accounting and reporting on social and environmental issues at supply chain or sectoral level has not yet been fully explored. Inherent in natural capital accounting is a recognition of interconnectedness between ecosystems, species, and human (and business) activity. In this way, the natural capital approach of looking at impacts and dependencies can help us to link organisation-level activity to sectoral and supply chain activity and, ultimately, to global indicators such as planetary boundaries, including vital climate change and biodiversity targets. It is also crucial to be aware of the risks of instrumentalising nature by reconceptualising it solely as natural capital, rather than seeing it as intrinsically valuable. Financialising nature in this way can encourage the use of ‘trade-off’ arguments to justify environmentally and socially destructive activities, which also privilege some actors over others. For example, corporate natural capital accounting could be used to support a decision to harvest forestry in the Amazon, or kelp on the Irish coast, which privileges the company’s valuation of the natural capital asset over both the intrinsic value of the related ecosystem and the value it holds for local or indigenous communities. Natural capital accounting must be accompanied by a holistic approach to performance measurement and decision-making, characterised by community engagement, accountability and transparency. Accountants are encouraged to work with multiple actors in a participatory way as we develop new means of accounting to support a sustainable future.   Dr Aideen O’Dochartaigh ACA is Assistant Professor in Accounting in  DCU Business School.