The Bear

1

My earliest memory is of the day when my father brought a bear home. I must have been only four or perhaps five, counting by the Korean method, and my brother must have been only two or three, and my sister was only a baby. The bear was only a cub, I remember thinking that it looked like a ball of black fur, and it made a strange mewling sound.

My father told us that he had found it when he was leading a platoon of his soldiers on a training exercise in the forest not far from where we lived, which was in turn not far from the military base that he commanded, on the eastern edge of Seoul. He said that the bear’s mother had been killed by hunters – this was not uncommon in those days. The soldiers with him had said that the merciful thing to do would to shoot it then and there, as it would not be able to survive on its own, it was too young, but my father would not hear of it. But he agreed that, yes, the cub would soon be killed by another bear or some other creature of the forest if it was left. So the bear came to live with us.

My mother, needless to say, was not happy with this idea. It is a wild creature, she said. It has claws and teeth and when it gets bigger it will surely have a very nasty disposition. And we barely have enough food for ourselves.

You must realise that at this time, the early sixties, Korea was a very poor country, even in the area around the capital. Memories of the war were still fresh, and even though my father was a respected figure in the military – and as a colonel he had a significant role in the administration of our part of the province – there was often just enough to go around and not much more. Having meat in a meal was a treat, let me put it that way.

But my father was adamant that we would take in the orphan bear. And once my father had made a decision there was not much point in further discussion. He said that he would build a little cabin for it from scrap wood in the backyard, a bit like a cave, and the bear could live there in the warmer months and could eat leftovers.

There aren’t any leftovers, my mother said. But then she looked at the little ball of fur, and it made that mewling noise, and, well, she accepted that we could not simply throw it back into the forest. She shook her head and muttered something about another mouth to feed but the bear stayed. Somehow she managed to find food for it. Occasionally, later on, when my father was not at home, and when the bear could sit up, I would see her feeding it little bits of radish while she was cooking. She would see me watching and hiss that I was not to tell my father under any circumstances.

My father gave the bear a name but I cannot remember what it was. My mother, my brother, my sister when she could talk, and I just called it ‘the bear’. In fact, I believe that the first word my sister could say was 곰.

2

I should tell you a little more about my father, I think. He was from a town that was now in the North, but he had fought for the South in the war, and had been decorated and promoted. His medals and letters of commendation, along with his photograph, are in the glass-fronted case that we bow to on New Year’s Day and other significant occasions.

Like many soldiers he could be very stern and strict, and you could sense the steel in him. But there were times when he spoke in a softer voice. He would tell us stories about the war, about the Battle of the Han River and other incidents. He called MacArthur ‘the American general’ but he used the term ‘the General’ for another man, Park Chung Hee, the man who was now leader of the country. He had been a general but had recently assumed the title of President. My father knew the General, they had been in the same class at the military academy, we have a photograph of the graduation ceremony that shows the two of them.

I suspect that they also had had something to do with each other in some part of the war, although I am not sure what. In any case, there was some 정 between them. I suppose that battlefields create those sorts of connections.

My father’s responsibilities meant that he often had to stay at the base, but I recall warm evenings when he was with us in the little house. He would sit on the porch and drink 소주 and my brother and I would sit on the ground and listen to him talk. Aside from stories of the war he would tell us about the little town where he grew up, about planting rice and cabbages, and praying that the rain would be not too little, not too much, just the right amount, and that the winter would not be too cold.

The bear would be with us, sitting on its bottom and listening to the stories as well. I remember my sister sitting there but often, since she was very young, she would lean against the bear and fall asleep. I assume she liked the bear’s soft, warm fur. I mentioned this to her many years later but she said she could not remember it. Well, she was not much more than a baby at the time.

3

The bear had a remarkable talent for mimicry. When it heard my mother singing while she cooked or cleaned, in her sweet clear voice, it would make a crooning sound as well. My mother told me that it liked to sit and watch her putting on her makeup. One day, she said, she found that the bear had got into her cosmetics drawer and had put makeup on its face. I was there at the time, she told me, although I don’t remember it. I wish I could. A bear with lipstick and powder! Now that would have been something to see!

Maybe it happened and maybe it didn’t. I think that not all the stories about the bear that my mother and father told us, a bit later on, were true. Maybe they were just stories for children. But I like to think that that one, at least, was true.

One thing I remember quite clearly was when my mother took me and my brother into the forest to look for berries and mushrooms. She carried my sister in a back-sling. Of course, the bear came with us. I guess that by this time it had been with us about a year, perhaps a bit more, so it was no longer a cuddly ball of fur. But it padded along behind us, on all fours, happy to eat berries when we found some.

At one point the bear stopped. It stood up and sniffed the air. That was the first time, I believe, that I saw it stand upright.

It looked around. It looked at us, my mother and brother and sister in the sling and myself. Then it looked again at the forest.

Then it went down on all fours again and came over to us. It nuzzled my hand, and I scratched its ears in response, as I usually did.

Someday, my mother said, it will have to leave. It is a wild animal, after all, and one day it will have to leave.

4

The bear had been with us three years, I suppose, something like that, when it vanished. It was not in its little cave-cabin and not in any part of the yard, and not in the house.

My father came back from the base that evening, and I remember my mother telling him, very softly, that the bear was nowhere to be found. My father said nothing.

I was surprised that the next morning a truckload of soldiers from the base appeared at the front of our house, and my father gave them a series of orders as he climbed into his jeep.

He saw me watching. He moved over a little to make space on the seat beside him.

Come on, son, he said to me. Let’s go and find our friend.

So I climbed in and we set off through the forest. My father knew where he was going, and eventually we stopped outside a little cave. My father got out of the jeep, and the soldiers climbed out of the truck and raised their guns. From within the cave there was a low growl.

Father, I said. We’re not going to shoot the bear for running away, are we?

No, my father said. But even though this is the cave where I found the bear, there might be another occupant. So stay in the jeep, son. To be safe.

My father walked towards the cave. He called out the bear’s name.

Being a boy, I did not stay in the jeep. I got out so I could see more clearly.

My father called out again.

The bear – our bear – came slowly out of the cave. On all fours, it went up to my father and nuzzled his hand.

My father stroked the bear’s head. The bear gave a soft growl. My father said something to the bear but I could not hear his words.

They stayed like that for a long, long moment. Then my father turned and walked back to the jeep. The soldiers returned to the truck.

My father saw that I had climbed out of the jeep. He gave a little nod, and then helped me in. He looked back. The bear was gone.

You have to go home, he said to no-one in particular. You have to go home.

5

It was early the next morning when my father shook me awake. Get dressed, he said. Don’t wake your mother and brother and sister.

I did as I was told. Then he took me outside and we climbed into the jeep.

We drove along the road that led to the military base. I had not been here before, or at least I could not remember being here, but I recalled him saying that it had recently been expanded.

We drove to the new section. There was a small helicopter on a concrete pad. My father got out of the jeep and talked to a guard standing near the helicopter. I could not hear what they were saying but at one point my father pointed to his badge of rank. Eventually, the guard saluted and opened the helicopter door.

My father gestured for me to come over, which I did. Together, we climbed into the helicopter.

I had not known that my father knew how to fly a helicopter but obviously he did, and he started the engine. He put a radio headset on and spoke to someone, using the words ‘on my authority’ several times.

Then we were off.

I asked him where we were going.

North, he said. There is something I have to see, and show you.

But won’t the Communists kill us if we go to the North? I said.

It’s not a long way over the border, he said. By the time they get planes in the air we’ll have seen what we need to see and be on our way back.

So we flew on, heading to the North. Seoul fell away behind us and we passed over a long strip of green forest.

The DMZ, my father said.

I nodded. Perhaps I should have been worried, even fearful. But my father seemed to be entirely sure of what he was doing, and so I was not afraid.

Occasionally he spoke to someone on the radio. Then there was another voice coming through the little speaker, a voice with a different accent. I realised that it was a Northern voice.

I just want to see my hometown, my father said into the radio. This helicopter is unarmed. All I want is to see my hometown, and for my son to see it.

The Northern voice continued to speak, even more stridently. My father turned the radio off.

Then we came to a town. We circled, and came in low. People in the town came out and looked up at us, unsure of what was happening.

My father pointed at a cluster of little houses. That was where I was born, he said. And my father was born there as well. Can you see the vegetable patch at the back? My mother was born at the other end of the town, in that house over there, you see? That one near the ricefield. They were killed in the war, as you know, but … that was where we lived. Before.

It was a town, like many other towns scattered across the landscape of the Koreas. A town like many others, but special. The town where my father was born.

Do you understand? my father asked.

I thought about it.

I understand, I said.

He nodded. He turned the little helicopter southwards. He was smiling.

6

Years later, after my father had passed, my mother told me that she had been very angry with him, but the way she said it made me think that she understood what he had done, and why.

My father continued to hold the rank of colonel but it was made clear to him, according to my mother, that there would be no more promotions, no more medals, no more letters of commendation. I said that it was surprising that he was allowed to stay in the military, let alone keep his rank. She said: the General.

7

So that is the story of the bear. For many years I did not really think of it, but these days, as I approach the age that my father was at that time, I think of it often. I wonder how the bear fared in the woods, what sort of life it lived. And I wonder if some day I might be able to visit my father’s hometown, to talk to the people there and see the fields of rice. But when I think of this I realise that I do not know the town’s name. My father had never told me, and I had never asked.

bear paw

Providing the steady hand

Appearing in INPRACTICE magazine, April 2020

 

The New Zealand government’s response to the COVID-19 crisis has been swift and determined, legislating a relief package of around NZ$18 billion, equivalent to about six per cent of the country’s GDP. Accountants, working as finance specialists and business advisors, are providing critical support to their SME clients, guiding them through the crisis and ensuring that government support can be accessed.
Saurav Wadhwa, Managing Director of IBBZ Accounting, a practice based in Auckland, believes that providing certainty is essential in a time of stress.
“I see that part of our job is to keep our clients from succumbing to panic,” he says. “We have been taking their calls, providing updates, and trying to give them as much comfort as possible. New businesses, and those that were already struggling, are more concerned than existing businesses. Established businesses are not too worried but that will change if the situation goes on for another six months or so.Saurav Wadhwa
“As for our own business, we are expecting a 30-40 per cent reduction in sales and there has been a marked drop-off in new clients. All our employees are working remotely and everyone’s hours have been reduced to 32 hours as a way of sharing the burden. We had previously invested in the technology to allow remote working and had simplified our processes, and that is now showing the benefits.”
Wadhwa notes that his firm is not charging any professional fees to clients for helping them access government support. Clients have been given extensions of payment terms for other services whenever they have asked.
Bridgette Pretty, Director of the Nelson-based practice Pretty Accounting, likewise acknowledges the crucial aspect of providing reliable information to clients.
“During the first two weeks after the relief package was announced I worked long hours to help clients with information around the subsidy applications. I turned billing off during this time as having access to answers during challenging times can greatly help to reduce stress levels,” she explains. “It’s a way of giving back to clients. And clients have shown remarkable resilience, even those who have been hit very hard.

“It’s important to be here for them, to offer answers and steadiness in a time of stress. That has extended from providing guidance on cashflow planning for the future to developing some coping skills on how not to kill family members during lockdown!”

Accessing support

Bridgette PrettyPretty identifies the wage subsidy as a valuable part of the government support package, allowing businesses to retain valued staff. Assistance has also been important for self-employed people, as it has meant the ability to plan cashflow with the assurance that some money, at least, will be coming in. This part of the support package is fairly easy to access but Pretty’s firm has been there to assist clients with applications and documentation.
Wadhwa agrees that the wage subsidy scheme is one of the most effective government initiatives, and his practice has helped many clients with it. Other aspects of the government support program are more complex, such as the re-introduction of depreciation for non-residential buildings, changes to some tax rules, and the temporary increase in asset write-offs. These usually require professional advice for clients.
Wadhwa is less enthusiastic about the loan scheme. He sees the possibility that some companies will take the loan but then not have the capacity to repay it. But he sees the overall package as very positive in the level of support it has provided.

Recovery phase

Both Pretty and Wadhwa see that the accounting profession will have an important role to play when the economy moves into recovery phase.
“Cashflow planning is going to be a big one, as well as tax planning, which was invaluable in the recovery from the previous recession,” Pretty says. “We will also provide assistance with information to give to client’s banks. That will be important as we come out of lockdown, a means of keeping relationships between clients and the banking sector open.”
She believes that the recovery period will open up new opportunities for many businesses, and is working to ensure that her clients will be in a position to take advantage.
Wadhwa agrees, saying: “Using our expertise to look ahead is one good way we can add value to our clients. We make it part of our regular update service, and we are also providing advice on financial planning and business restructuring.
“Looking ahead a bit further, we will help our clients with disaster recovery plans, which includes contingency funds in the form of liquid cash. For some time I have been working with clients to build contingency funds – nine months of total gross expenses is a good target, in my view, and three months is the absolute minimum. This crisis underlines the value of that.
“As accountants and CPAs, we are our clients’ most trusted source of advice. I believe they need us more than ever before, and we cannot let them down.”

Resources for download

Appearing in In The Black magazine, April 2020

 

AI AsiaAI’s Asian impact

A comprehensive survey of Asian countries conducted by MIT as part of its Technology Review Insights research program has found that AI will create more winners than losers, but its spread will nevertheless involve a period of significant disruption. Over three-quarters of companies expect total headcount to increase over the next five years, including in functions where AI is already being deployed. However, across the region about 12 per cent of current jobs are at high risk of being automated in the next five years. Labor-constrained markets such as Singapore, Australia and Japan are likely to be among the fastest to seize the opportunities created by AI.

Download from:
https://s3-ap-southeast-1.amazonaws.com/mittr-intl/AsiaAItalent.pdf

 

Communication innovation

A useful resource for those who want to improve their presentation ability is the site of communications consultants Storytelling With Data. A recent blog looks at innovative ways to communicate complex data in visual form, moving well beyond traditional pie charts and bar graphs. Other blogs discuss the importance of practice, how to get the best from feedback, and trends revealed at recent conferences and events.

The company site offers blogs in written and auditory forms, as well as podcasts with a variety of experts. Given the importance of presentation skills for finance professionals, it is well worth a look.

Read, watch, and listen to at:
http://www.storytellingwithdata.com

 

Global data

The International Monetary Fund collects a huge amount of economic and financial information, much of it available through its regular World Economic Outlook report, released in April and September/October each year. The report presents the IMF staff’s analysis of economic developments at the global level, in major country groups and in many individual countries.Global data giants: The real insurance disruptors | Latest News ...

However, the WEO report is only one part of the IMF’s research activities. The site also provides links to specialised reports, including the future of global manufacturing and the impact of growing protectionism, policy challenges for emerging economies, and the outcomes of a conference on debt.

Go to:
https://www.imf.org/external

 

Staying skilled

In a survey of 951 Australian employers, three-quarters of respondents said that they were more likely to shortlist a qualified candidate who demonstrates a commitment to upskilling and continuous learning, with an emphasis on ‘soft’ rather than technical abilities. A similar figure nominated “communication” as the most important skill, followed by “adaptability”, and then “digital proficiency in a new technology relevant to an individual’s job”. Coding skills were nominated by only six per cent.

Employers are looking for people who can collaborate across the organisation, and who can pivot to a new role or area of responsibility as circumstances change.

Go to:
https://www.hays.com.au/upskilling/index.htm

 

Integrated reporting

KPMG’s sixth annual survey of corporate reporting trends in Australia has found that 74 per cent of large listed companies are now using integrated reporting to focus on value drivers, up from 48 per cent in 2018. Many large non-listed companies have also turned to integrated reporting. The trend is driven by increasing investor interest, especially from super funds, and changes to the ASX reporting recommendations.

A common thread in the survey interviews was that the process of developing integrated reporting starts to drive integrated thinking within the organisation, and the better use of resources and relationships in strategy execution.

Download from:
https://home.kpmg/au/en/home/insights/2019/11/asx-200-corporate-reporting-trends-2019

Are you ready for AI disruption?

Appearing in In The Black magazine, April 2020

 

Every leader, manager and finance professional now understands the importance of being able to deal with disruption. The story of the past decade has been about one wave of technology-based disruption following another. The idea of disruption is not new – Clayton Christensen described and defined it in his seminal 1997 book The Innovator’s Dilemma – but the game is now moving up a notch. The transition of Artificial Intelligence from the pages of sci-movies and research labs into the business mainstream represents a new set of fundamental challenges, and many leaders in Australia do not seem ready to deal with them.

“AI has potential impacts similar to other forms of technology-based disruption but it also has additional characteristics that need to be considered separately,” says Dr Mathew Donald FCPA, an academic who consults widely on change management and business strategy. He is also the author of an important new book, Leading and Managing Change in the Age of Disruption and Artificial Intelligence*. “This includes the potential to affect a wide range of work. Managers will need to re-write job descriptions, procedures and responsibilities, while trying to build jobs that are satisfying for staff. They will have to recognise that many people remain wary about AI systems.”

Dr Donald’s experience is that the Australian business community is less prepared for the practical reality of AI than comparable countries. Dr Donald cites the UK, Ireland, India, the US and the EU as further along the AI transformation curve. Many Australian corporates – not all – believe that the rollout of AI is still some way off so have not included it on their risk registers.AI Disruption

AI systems such as ‘phone bots’ are already being used to handle simple interactions with clients but will eventually be able to take on higher-level activities. Dr Donald believes that the finance profession will use AI to review and improve transactional and management information, moving up the complexity ladder.

There is good evidence that some business sectors have already moved solidly into the robotic field. Professor Eduardo Nebot, Director of the Centre for Field Robotics at the University of Sydney, notes that robotic systems are already being used in the mining, stevedoring and agricultural industries. Driverless vehicles such as harvesters are being successfully used, and these robots are increasingly being linked to basic AI systems.

Fast transition

Dr Donald believes that AI will not be a ‘big bang’ but a series of waves that occur over time, first in areas where the work is repetitive and the decision principles are easy to determine. Then it will move into areas such as inventory control, stock locations and customer service. Eventually, virtually every area of a business will be affected in some way by AI.

“The most limiting factor for AI will be consumer acceptance, and it will only be adopted once it can be shown to be superior in function to the human equivalent, as well as reliable and safe,” says Dr Donald. “The transition, when it starts, will be fast. There is a real risk that it may happen too quickly for the ethical issues to be fully considered, understood and mitigated.”

For the accounting profession AI raises a host of challenges. Technology has already had a crucial impact on the traditional functions of recording and reconciliation, and AI is going to drive that even further. While many finance professionals now focus on data analysis and trend insight, these areas would appear to also be open to AI disruption. This is the case for accountants in both corporate roles and public practice.
“The capacity of AI systems to process huge amounts of data means that they can provide analysis, reports and new insights in faster time frames,” Dr Donald notes. “The potential for AI to integrate systems between organisations in new ways has already been demonstrated overseas. In Australia, B2B and B2C systems have been around for a while, especially in the space of warehousing, deliveries and orders. Data connectivity is increasing globally, as seen in the social media and marketing fields.”

Changing role for finance professionals

While there are significant problems there are also many new opportunities for finance professionals. The removal of the routine tasks will allow financial specialists to get closer to business decision-making, providing more of their expert opinions and advice. To take full advantage of this they may have to overhaul their business structures, procedures and skills base, so they can offer up-to-date advice in almost real time.

Dr Donald believes that this is an area where the profession should be taking the initiative in the immediate future, rather than allowing others to establish themselves as experts on the advisory element in AI. The key area of opportunity lies in the potential to provide guidance about the most suitable AI system and its implementation, as well as any bias and ethical issues. This will not necessarily require high-level technical knowledge but will be more about business and strategic advice.

As AI moves squarely into workplaces managers will likely be presented with the task of explaining to staff that their roles have changed or diminished, or even eliminated. Staff, especially those with lower levels of skills, will likely become worried about their future, and managers will have to stretch themselves to provide workplaces that people want to work in. On the other side of the coin, highly skilled people will become more valuable. These people may prefer to work from home, or under new arrangements and for higher pay – and they will be making such demands at the same time that the less skilled are being replaced by AI.

“Managing this period of transition is going to be a real challenge, a balancing act,” says Dr Donald. “And in the longer term there will be even more issues to address. Some employees may have to work for rather than with an AI system, and that is a big psychological shift. Managers will have to work much harder to attract and retain staff in this situation.”

He foresees a new period of re-learning for managers and leaders, so they have a conceptual knowledge of the technology and what it may deliver. The spread of 5G communication will assist also AI development. Faster communication speeds will underpin AI-integrated driverless urban vehicles, drones, and even power generation.

Professor Nebot agrees about the importance of 5G. “The game changer will be if 5G can provide the bandwidth and latencies required to move the computational power outside vehicles,” he says. “But there are a lot of challenges to address before we get to that.”

Dr Donald believes that many businesses are likely to soon be interested in AI-based automatic phone systems for customers or will consider drones, driverless cars or robots to do routine tasks. The challenge for the accountant is to provide the tools to determine if the proposals are worthwhile, and to understand the issues arising from the technology.

“Advisors need to be on top of the technical areas of AI while providing broader advice on issues like redundancy, upgrades, and system integration,” he says. “There are many potential new areas for finance specialists who are willing to get involved, but they need to start now.”


* Leading and Managing Change in the Age of Disruption and Artificial Intelligence
, Mathew Donald, Emerald Publishing, 2019.

Thriving, looking ahead, better ideas

Appearing in In The Black magazine, April 2020

Made to Thrive
By Brad Giles
Evolution, $30

Made to ThriveSo you have finally made it to the big chair and you think you can pat yourself on the back and enjoy the status. Think again, says leadership specialist Giles. Your work is just starting, and the areas you have to focus on are the ones that you probably don’t like.

Drawing on academic research and his own experience, he defines five key roles played by highly effective CEOs. Accountability means that everyone in the organisation knows what is expected of them, with systematic lines of authority. The CEO also has to be an ambassador, representing the company values. They must set a positive culture within the company, and tie it to their strategic direction. The final role is about minimising risks through considered succession planning, not just with their own job but in every leadership position.

Giles provides assessment tests for each, noting that few people score well on all. The key is to be willing to admit and address weaknesses, which means getting out of your comfort zone. He offers good advice for this as well as checklists and guides. It is not easy to confront one’s shortcomings but the readiness to do so is the difference between good and great.

 

The Organisation of Tomorrow: How AI, Blockchain and Analytics Turn Your Business Into a Data Organisation
By Mark van Rijmenam
Taylor & Francis, $63

Business-related technology sometimes seems like a highway plunging into the unknown at high speed. Van Rijmenam, an academic who works at the intersection of management and technology, knows how frightening it can be, and in this book he seeks to integrate analytics, blockchain and AI into a digestible, cohesive package. He looks at cases such as Alibaba, Walmart and Microsoft, using their experience to develop a model he calls D2 + A2: datafy, distribute, analyse, automate. Understanding your market, building relationships with suppliers and stakeholders, using data to adapt rapidly to changes and look ahead: it requires good people to understand the platforms involved but, even more, a leadership team that can manage and direct the digital infrastructure.Organisation of Tomorrow cover

He makes the point that the size of an entity will become less important (if it isn’t already) than its technological grasp. In fact, larger entities are more likely to operate like groups of small ones. Supply chains are more likely to be global and collaborative than local and hierarchical.

Van Rijmenam covers a great deal of ground but does so in an ordered and systematic way. So if you are looking for a map of the road ahead, this is a good place to start.

 

 

Building Better Ideas: How Constructive Debate Inspires Courage, Collaboration, and Breakthrough Solutions
By B. Kim Barnes
Random, $50

A good team is an example of the whole being greater than the sum of its parts but too often, says consultant Barnes, team discussions end in defensiveness and acrimony. She offers a range of useful solutions, starting with ways for the team leader to ensure that the project objective is clear and then assigning roles and timelines, with a transparent structure and obvious metrics. She drills down to a substantial depth, even suggesting phrases and speaking modes to encourage team members in questioning assumptions. Members should feel free to critique the contributions of others, but by using data and logical pathways to do so in a positive way. A good idea becomes a great one through development, evolution, and multiple inputs.

Barnes identifies groupthink as a key danger, and looks at cases where a false consensus has led to disaster. This is especially common when the team leader is seen as an authority figure. She emphasises that the leader has to be sometimes willing to step back, acting as a guide rather than an expert. A particularly useful aspect of the book is the appendices, which include worksheets, resources, and templates for planning constructive debates in a team context.

 

 

Flexible work offers benefits but pitfalls as well

Appearing in IN PRACTICE magazine, April 2020

 

Nearly three-quarters of small and mid-sized accounting practices use flexible working arrangements, according to the recent CPA study My Firm, My Future*. Remote working is common, which can mean giving employees the option to work some or all of the time from home, employing individuals to work for a fixed period from home, or using independent contractors, especially to cope with busy periods or special projects. Such arrangements can be good for both the practice and the workers but company principals should be aware of the legal issues and the management pitfalls.

“The basic distinction between an employee and a contractor is that an employee is hired to work, usually exclusively, by one business,” says Nicola McMahon, Senior Associate in the Employment Relations and Safety team at McCullough Robertson Lawyers. “They are paid a wage, after PAYG deductions, and receive entitlements, such as annual leave and personal leave.  Independent contractors work for themselves and sell their services or expertise to one or more businesses. They are paid an agreed rate without PAYG deductions although may charge GST. They do not have paid leave entitlements.”

But there is no definitive test, and sometimes legal advice might be needed. This is important because there have been cases where a business has engaged contractors, but those individuals later argued that they were, in practice, employees, and have brought claims for unfair dismissal or unpaid entitlements.  Also, the ATO may determine that an employer should have deducted PAYG tax for someone they have treated as a contractor, when they were an employee.

“There are also serious consequences for contravening the ‘sham contracting’ provisions of the Fair Work Act 2009 where an employer is found to have disguised the relationship,” McMahon notes. “There are stiff penalties if this behaviour is found to have occurred.”

Working-from-home-1

Clarity needed

Dr Jim Stanford, Director of the Centre for Future Work at the Australia Institute, likewise emphasises that employers should be aware of their responsibilities.

“Some employers might plead ignorance about their responsibilities when it comes to remote workers, but ignorance is no excuse,” he says. “Whether you are talking about employees or contractors, employers have an obligation to know and abide by the legal standards of the relationship.”

An important step is to have a clear policy on remote working. Some large firms have policy documents but many small and mid-sized firms make it up as they go along, case by case. A written policy provides certainty as well as legal clarity to both sides. It also requires managers to consider whether remote working is really appropriate for the company and the work.

“With remote working, employers benefit from not having to provide office space and technology,” Stanford says. “They may experience less absenteeism, and they may find they are able to recruit labour at a lower cost, since the workers will take into account that they don’t have to commute to work in weighing the appeal of the wage offer. On the other hand, employers don’t have clear oversight or direct control over the worker’s activity and effort. That can undermine observed productivity and the cohesiveness of the work.

“Some remote workers may enjoy the convenience of avoiding travel time and being able to work in more flexible time blocks. The downside is the possibility that work expands to take up larger and larger portions of their overall life. Their work is embedded in their homes, which can become very oppressive.”

Relationship building

Ultimately, if an employer wants someone – whether employee or contractor – who works effectively, meets deadlines, and delivers according to the brief, it is in the employer’s interest to invest time and energy in building a positive relationship.

As a part of this, employers who engage home-based employees should also be aware of the OHS issues. They need to ensure that employees working remotely have a safe work environment and are provided with appropriate tools to do their job, which may include IT equipment, desks, and chairs.  Essentially, the OHS requirements are the same as if the employee was in the office.

“Companies should regularly contact employees who work remotely to check their mental health and satisfaction,” advises McMahon. “Working from home has its benefits but it can be socially isolating.”

 

To access a copy of this report go to https://www.cpaaustralia.com.au/public-practice/managing-your-practice/my-firm-my-future

Digital, growth and mindset

Appearing in In The Black magazine, March 2020.

 

Digital is Everyone’s Business: a Guide to Transition
By David Banger
BookPod, $39

Digital is Everyones BusinessMany senior executives understand the necessity of going digital but making the transition from a hierarchy to an organisation where information flows around easily seems like a very daunting challenge. Banger, a CIO turned academic, offers practical advice, starting with the development of a learning-based mindset. For leaders, this can mean admitting their weaknesses in certain areas, which can be a painful step. Finding the most suitable digital platform is important but having the right people in place to make it work is essential.

In many companies there will be long-serving employees who are wary of digitisation, so the leadership group has to be able to present the advantages of the new way of working. The transition also provides the opportunity to reveal activities which are not adding value, a crucial issue in large organisations. There has to be a clear message that innovation and experimentation are critical components of the digitisation journey. Keep the information pathways simple, walk through the changes in plain language, and get up to speed on the technology side, advises Banger.

He explains this concisely and systematically, with helpful tools and relevant analogies. The move to digitisation is not easy but this book offers a useful roadmap.

 

Growth IQ: Get Smarter About the Choices That Will Make or Break Your Business
By Tiffani Bova
Portfolio, $53

Working out how to grow the business is the fundamental, and most difficult, task for leaders. Bova is a specialist in the area and draws upon her consulting experience to set out ten paths, ranging from product diversification to partnerships to extended customer base penetration. She carefully unpacks each of these but she emphasises that in nearly all cases sustained growth requires a combination of ideas. The search for a single magic bullet, in fact, usually ends in failure. Understanding each path means that a leader can develop a coherent suite of strategies to provide synergy and flexibility. There is, however, a common thread: a continued focus on the customer, which is the origin of the “growth IQ” concept.Growth IQ Aust cover

Along the way she looks at companies that have implemented multi-faceted growth strategies, such as Netflix, McDonalds and Apple. She also examines some failures, such as Blockbuster, which provide useful lessons as well.

Don’t think it will be easy, says Bova, and neither will it be quick. She believes that sustainable growth builds up slowly. This willingness to eschew the quick fix is a refreshing aspect of the book, and Bova also has a good eye for practical solutions and solid metrics.

 

The Outward Mindset: How to Change Lives and Transform Organizations (2nd ed.)
By The Arbinger Institute
Penguin, $30

This volume updates a 2016 edition, with an expanded set of case studies and new research material. The Arbinger Institute is a training and coaching group, and many of the stories discussed in the book come from its programs. The authors believe that many companies have become inward-looking, having drawn the wrong lessons from management theories that emphasise internal operations. This isolates a company from its clients and the broader environment. Addressing this problem begins with people changing their personal outlook into one based on collaborative listening and positive interactions.

Employee training is useful but the key is the organisation’s leaders demonstrating the value of an outward-looking mindset, and an important chapter provides a game plan for communicating it. Getting there may take several years but the rewards are significant, with the benefits eventually flowing through the company. In particular, teams become more productive and connected to the firm’s objectives.

Some readers might find a few of the numerous stories difficult to follow but there is always follow-up analysis. The website of the Arbinger Institute has many of the stories available as videos, and there is also an online audit tool to assess progress towards an outward-focused mode of thinking.

Outward Mindset