Thought Leadership articles

The Institute's Head of Northern Ireland, Zara Duffy, considers the employment market and wonders whether we need more jobs or more people. Businesses across Northern Ireland report recruitment as one of their biggest challenges, noting difficulties in talent attraction and retention in the current market. In March 2022, record high levels of employment were recorded across the region with the latest estimates indicating the number of payrolled jobs in Northern Ireland standing at 775,000. Rising wage costs are not helping and in this ongoing period of high inflation, three quarters of businesses across the UK are concerned about the impact labour shortages are having on their competitiveness. This is a relatively new problem for Northern Ireland. Historically, we have been more concerned with job creation than filling jobs. It may well be time that policies designed to attract investment are re-examined, leaning more towards value than role creation. In the meantime, however, is the solution to the region’s worker crisis already staring at us? Businesses starved of workers could recruit from the one third of women who have left the labour market to look after family and home. Many of these women cite childcare availability issues as a barrier to re-entry so a plausible solution would seem to be a government that invests in better childcare and improves access to paid parental leave. A medium-term solution to the problem might be to revisit the caps on the number of students Northern Ireland’s universities can accept. Unlike in England where full fees apply, students are only responsible for a portion of the cost of attending university in Northern Ireland, with the remainder covered by the Department of the Economy. To allow Government to control its spend on these grants, this approach results in a limit in the number of Northern Ireland students that can attend university in Northern Ireland. Some research suggests that these caps encourage nearly a third of Northern Irish students to pursue third-level education in other parts of the UK and once they leave, only 12% return. More encouraging numbers from the Higher Education Statistics Agency show that only 16% of 2018/2019 graduates from Northern Irish universities left the region for work. Northern Ireland’s ability to attract foreign direct investment, particularly in the technology sector, has resulted in a huge demand for qualified candidates. Last year alone, 23% of jobs advertised in Northern Ireland were digital technology roles. If the region is to continue to be the number one international investment location for US cybersecurity firms, we must establish how we plan to continuously grow and nurture our people to give them the skills required to fill these roles. In the short-term, businesses might need to look outside of Northern Ireland to bridge the gap. Newcomers from outside of the UK and Ireland will need a visa to work in the region and employers will in some cases need a sponsor licence to employ workers. The length of time this process takes will be central to the success of getting workers in to fill roles. Removing some of the red tape to make it easier for businesses to meet their staffing needs will need to be explored to open the doors to global talent. In the background, the trend towards automation continues. Additional capital expenditure in this area is expected, as employers look to find ways to minimise their dependency on employees, with the belief that this investment will provide long-term dividends. The growth in opportunities for skilled employees has resulted in difficulties in staff retention. Businesses with deep pockets may be able to meet the calls for higher wages, but not all can. Alongside this, some smaller businesses are losing staff to those offering more flexible working arrangements. Candidates are holding a lot more cards, leaving employers in a tricky position. In the end it will all come down to the economic theory of supply and demand. At the moment, we have the jobs, we just need the people. Zara Duffy Head of Northern Ireland at Chartered Accountants Ireland First published in The Irish News on 24 May 2022

New laws set to come into place in Ireland will bring significant change for both employees and employers. Moira Grassick looks at pending legislation and what employers can do to start preparing. Employment law is constantly changing, so employers must keep track of what is on the horizon. Current changes to employment laws are a top priority for both Government and the Oireachtas, with a raft of new laws being proposed to deal with everything from domestic violence to probation periods.  Although many of these laws are in their early stages, they are expected to pass, meaning employers must prepare for the changes they will bring about. There is a clear indication that cross-party support on several Bills will have a direct impact on the employment relationship by as early as July and August of this year. Paid leave bills underway The Government recently approved a publication of the draft Sick Leave Bill 2022 providing for up to three paid sick days per year. This is planned to increase to five days in 2024, seven days in 2025 and 10 days in 2026. Under the new rules, employers will need to pay 70 percent of normal wages up to a maximum of €110 per day. This isn't the only new type of paid leave that has been proposed, however. The equality committee is set to discuss a bill to introduce paid leave for survivors of domestic violence. This would allow time off for medical visits, criminal and civil legal proceedings, counselling sessions, or for victims to look for a new home. Tips and gratuities Amendments to the National Minimum Wage bill may soon mean that employees in the service sector will be entitled to all tips and gratuities paid by customers. Up until now, it has been up to an employer to pay customer tips to employees. Service charges could be used to subsidise employee pay, so employers may need to make changes to their payroll system in anticipation. Retirement Older workers in Ireland will also be receiving better government support. Although there is no mandatory retirement age in Ireland, an exception allows employers to introduce it if the reason for doing so can be objectively and reasonably justified. The new Employment Equality (Abolition of Mandatory Retirement Age) Bill 2022 would abolish this loophole, meaning that it would be less likely that older workers would be forced out of work before they chose to leave. Redundancy Lengthy legal battles have led to proposed changes in the rules surrounding redundancy. An amendment to the Companies Bill (2021) and the Protection of Employment Bill (2017) aims to provide preferential creditor status to employees in collective redundancies. It follows the campaign by Debenhams employees to receive their full redundancy pay after the company went into liquidation. Right to disconnect With so many people still working from home, many employees will be happy to hear about the Right to Disconnect Bill. Thirty percent of home workers in Ireland have stated that they regularly work past their contracted hours. This bill would allow all home- and office-based employees to have the right not to work routinely outside normal hours. Stay aware Changes to company climate policies, potential changes to pay rates in specific sectors and a drive to ensure clarity around working conditions will all soon be discussed in the Dáil. Every employer must be aware of these potential changes to comply fully with all legislation. Moira Grassick is COO at Peninsula Ireland. 

Dr John McCallig’s research into the accounting system of the future built on blockchain technology and cryptography has earned him a sought-after award for invention, writes Arlene Harris. As Assistant Professor in Accountancy at the UCD Lochlann Quinn School of Business and the UCD Michael Smurfit Graduate Business School, Dr John McCallig has long held a fascination for business, financial systems and the ways in which technology can improve both. Even as a teenager growing up in Claremorris, Co. Mayo, McCallig, now a Fellow Chartered Accountant, recalls an early interest in “the world of numbers” and emerging computer technology. After learning how to programme early home computers, McCallig went on to complete a degree in commerce at NUI Galway followed by a DPA (now Master of Accounting) at UCD.  “My research career began with PhD studies at Lancaster University in the UK and my thesis and subsequent research focused on the relationship between stock market returns and accounting numbers,” said McCallig.  “More recently, I have become interested in how the use of cryptography in business systems could produce better data for decisions by investors, regulators, and the public.” This interest is proving fruitful for McCallig, who was recently named recipient of the 2022 Invention of the Year Award by NovaUCD, the Centre for New Ventures and Entrepreneurs at University College Dublin.  Announced in March at the 2022 NovaUCD Innovation Awards, the prize was given to McCallig in recognition of his research into the use of blockchain technology and advanced cryptography to design accounting systems that could enable transparent access to verifiable data.  Through this research, McCallig has established that building such systems is theoretically possible and could potentially lead to a complete redesign of financial reporting processes in the future. His award-winning invention uses privacy-preserving analytics to collect and share commercially sensitive information about VAT obligations and payments.  This innovation can confirm that the proper VAT payments have been made—in real-time and without breaching the privacy of any individuals or firms involved.  The potential impact of this invention would be to provide the basis for a system that could interact “natively” with the digital economy to help build a modern and fair tax system, according to McCallig.  Now, he is keen to find out more about how his invention might work in practice.  “I have been working with NovaUCD on the commercialisation of my research on the use of cryptography in the VAT reporting and payment system and I am delighted and deeply honoured to have received the 2022 NovaUCD Invention of the Year Award,” he said.  “I appreciate the recognition this award gives to innovative ways of ensuring privacy and data integrity in critical social systems, like the VAT payment system.” Cryptography is the practice and study of secure communication techniques that allow the contents of a message to be viewed only by the sender and its intended recipient. “Many people think of cryptography as all or nothing—you encrypt a file, in which case nobody else can get any information about it, or you leave it unencrypted,” said McCallig. “In fact, modern cryptography provides a rich toolbox of techniques, which can be used to provide partial access to information.  “One example is homomorphic cryptography, whereby mathematical operations can be performed on encrypted data.” McCallig pointed to pay gap research published last year by Boston Women’s Workforce Council in the US, which collected payroll data in a secure manner without revealing information sourced from any individual company involved in the study. “One idea I have been working on myself is how a company’s receivables can be confirmed in a more efficient way,” McCallig said. “This relies on both the company and its receivables encrypting data about the obligations, so that data from the company and the debtors can be compared without revealing the data.” Although he does not foresee a future in which the fundamentals of accounting will change, McCallig is convinced that digital technology will play an ever greater role. “The digitalisation of accounting data in companies is nearly complete. Almost all significant enterprises have sophisticated Enterprise Resource Planning (ERP) systems,” he says.  “The interfaces between businesses are still mainly manual, however, with information being shared using email and PDFs.  “Here, there is an opportunity to design systems that not only allow the secure exchange of information, but also provide access to high-quality information for auditors and stakeholders.” Advanced cryptographic systems are, McCallig believes, ideal for this kind of application.  “I am fascinated by the role of information in business decision-making and resource allocation in the economy,” he said. “Accountants play a key role in providing this information and my interest is in exploring whether advanced information systems could improve the quality of this information.” As he continues his work at UCD—where he teaches financial accounting, financial statement analysis and accounting technology—McCallig is intent on ensuring that the next generation of accountants are fully up-to-speed with the various technologies playing a role in the future of finance. “It has been a privilege to teach and research at UCD and I am hoping to introduce more material on accounting technology, data analytics, blockchains and cryptography into the university’s accounting curriculum in the future.”