Pride month at work

Blog by Marina Kooijmans, HLB's Chief People Officer

8 June 2021

Every June, the world celebrates diversity and inclusion with Pride month. It is a time to recognise the importance of diversity in our communities and businesses around the world.

Pride month is a global movement to show support for and raise awareness of the LGBTQ+ community. Currently most business, whether they operate globally or locally, big or small, are starting to acknowledge the need for a more inclusive and diverse workplace. Pride month is an opportunity to celebrate the differences and similarities that bind us together and make sure that everyone feels welcome, respected, and comfortable in their own skin, regardless of sexuality, race, gender, religion, or ability.

For the most part, many organisations are supportive of LGBTQ+ employees. However, as with all other forms of discrimination there is still a very long way to go to ensure that we stamp out discrimination against LGBTQ+ colleagues everywhere, once and for all.

The end of discrimination at work starts with the development of strong internal talent policies that focus on diversity and inclusion. An inclusive and diverse workplace matters, not only for the employees of the firm but for long term business success.

What does diversity and inclusion at work look like?

Strong policies are a fantastic start, but diversity and inclusion at work should move beyond a legal policy obligation. In its core, diversity and inclusion in the workplace should be that no-one feels left out, discriminated against, passed over for promotion, or singled-out for a development opportunity because of their gender, sexual orientation, age, ethnicity, or their ability. Everybody is entitled to a sense of belonging.

A sense of belonging is not just a critical component of improving workforce performance, it is woven into the fabric of human nature. Belonging is the feeling of psychological safety that allows employees to be their best selves at work. Even at the most diverse of companies, employees will disengage and leave if they do not feel respected.

Firms that want to remain competitive in a rapidly changing world should continue to focus on adapting their people processes to attract, retain and develop talent from a truly diverse talent perspective.

At HLB International, our people are our biggest and most valuable asset. Each person’s individuality and unique point of view contributes to our success as a global network as we work together towards a common goal. We are committed to creating a respectful and safe environment for every one of our nearly 30,000 people – no matter their race, religion, gender or sexual orientation.

Building an inclusive culture where people can be their authentic selves is at the core of our purpose and values. Engaged, connected employees bring their best ideas and the best attitude to work every day – and in turn, deliver the best services to our customers across the globe. We also know from experience that there is a strong correlation between employee engagement and customer experience.

Why is diversity and inclusion in business important?

As well as the apparent benefits of a healthier, more productive workplace, a diverse and inclusive workforce offers deep and broad benefits across the entire organisation. Having a diverse workforce will create a more heterogeneous group of people, allowing an organisation to see things from different points of view, helping both the individual employees, and the business as a whole to reach their full potential. It creates a better experience for everyone, and, ultimately, develops a culture of creativity and innovation and better outcomes for customers worldwide.

A diverse organisation will gain a better understanding of their customers, because it is likely that customers come from diverse backgrounds as well, with large cross-sections from underrepresented groups. A diverse and inclusive workforce could therefore support a firm to tap into markets represented by their customer base.

A report from LinkedIn about global recruiting trends from 2018 found that diversity is directly aligned with a company’s culture and financial performance. In fact, 78% of companies prioritise diversity to improve culture and 62% do so to boost financial performance.

 

 

Companies that embrace LGBTQ+ policies outperform their competitors. Cultures that embrace the diversity that the LGBTQ+ community represents help to attract top talent and foster innovation, and people perform significantly better when they can be themselves at work. Yet more than a third of LGBTQ+ staff still choose not to disclose their sexual orientation at work for fear of discrimination.


How to support LGBTQ+ colleagues at work

During Pride Month we’d like to suggest ways that your business can support LGBTQ+ colleagues in the workplace:

  • Better anticipate the LGBTQ+ community

Start by ensuring that all your talent activities and policies are created through an LGBTQ+ lens. For example, when it comes to parental leave, not all parents are heterosexual, some fathers are the primary caregiver, and anyone may decide to adopt a child. The various scenarios should be anticipated, and a fitting policy built and communicated to employees.

  • Reward inclusive behaviour

Firms need to be braver in their journey towards a more inclusive and respectful culture. This can start with keeping employees accountable for inclusive behaviour. To be engaged and supportive of inclusion, which includes respecting LGBTQ+ colleagues, means that anyone who is being successful in their role, should be considered for promotion as an essential hallmark of performance.

  • Search for active allies

Allies are proactive in their support and defence of individuals in an underrepresented group. To be a true ally means taking on the struggle of another as your own, carrying the weight felt by those in a marginalised group and never putting it down. Allyship means valuing people with experiences different from your own, learning about privileges and unconscious biases. Allyship is a journey of personal learning and growth, but it is also a powerful driver of broader change. By helping your firm to understand and embrace a wide variety of experiences and viewpoints, it empowers the people in your organisation to challenge themselves and others to drive meaningful change and to create a workplace where everyone can thrive.

Diverse perspectives, combined with an inclusive culture, drive better decision-making, stimulate innovation, increase organisational agility and strengthen resilience to disruption. Inclusive organisations maximise the power of all differences and realise the full potential of their employees. Creating and maintaining a culture of diversity and inclusion can help organisations sustain long-term success in the marketplace. The change we realise inside the workplace will end up having a broader positive impact on all aspects of our lives. And not just this Pride Month, but always.

Above all, Pride month should prompt us to think about the role each of us plays in fostering LGBT+ inclusion. Looking out at the world, with the COVID-19 pandemic highlighting inequalities in our businesses and in society, diversity and inclusion at work is more important than ever. We all have a responsibility to call out bias and inequality if we see it, and we can promote and uphold the fundamental rights and well-being of all.

 

Marina Kooijmans

Chief People Officer

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Understanding the latest tax treaty developments (part 2)

Webinar: 15 June 2021, 1pm BST

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Join us for episode 19 of our International Tax Webinar series as we continue our discussions on the latest tax treaty developments – including the amendment of tax treaties by the MLI and its practical implication, plus insights from India regarding new rules on taxation and the digital economy. This webinar follows-on from episode 18  held on 27 April 2021.

Speakers:

Aaron Boyer, HLB USA

Surabhi Bansal, HLB India

Nick Farmer, HLB UK

Christian Jahndorf, HLB Germany

Till Zech, HLB Germany

 

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Embracing opportunity while overcoming supply chain challenges

HLB's Survey of Business Leaders - Manufacturing analysis

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Key survey findings at a glance:

  • Manufacturing business leaders are more optimistic about the economy than their global peers.
  • Improving efficiency and reducing costs are ‘top of the agenda’ for nearly all business leaders, however launching new products or services was the third most important action for manufacturing business leaders
  • 28% of manufacturing business leaders plan to reassess their supply chain to source closer to home, opposed to 16% of their global peers

When COVID-19 shut down factories, companies across the globe felt the impact. Raw material delays combined with shipping bottlenecks affected nearly every manufacturing segment. Although some manufacturers saw a decline from reduced consumption, others thrived with newfound demand for products. 

Since many facilities require workers on the floor, businesses had to find a way to improve airflow and infiltration. Doing so resulted in higher utility usage and investments in air filter and duct improvements. Higher costs, reduced output, delayed supplies, and a decline in consumer demand posed problems. 

With rising shipping costs and uncertainty about new virus variants, manufacturing executives must improve operations and explore growth opportunities. To gauge executives’ confidence levels across the globe, we conducted our HLB Survey of Business Leaders. From there, we looked at datasets from specific sectors to determine how manufacturing leaders plan to grow revenue and build resiliency into their operations. 

Overall, manufacturing leaders express more confidence about the upcoming months than their global peers. However, uncertainty still exists. Learn about the challenges affecting the industry and what steps leaders are taking to persevere. 

Pent-up demand increases manufacturing optimism

Curtailments during the pandemic drove up demand for manufacturing in certain sectors, such as pharmaceutical and medical equipment. Other segments adapted factory lines to produce goods for the direct-to-consumer (D2C) market. But some, such as food and beverage manufacturers, saw reduced demand for out-of-home products.

 After over a year of restrictions, people are anxious to spend money on goods and services. Moreover, professionals feel optimistic about the continued vaccine rollout and the systems used to ensure business continuity. Consequently, leaders anticipate a surge in consumer and wholesale spending. 

On a global scale, manufacturing leaders are slightly more optimistic about the rate of economic growth. 25% expect an increase, whereas just over 50% believe it’ll decline. Like their global peers, executives overwhelmingly believe economic uncertainty and the impacts of COVID-19 are the top two threats to growth. Nevertheless, the manufacturing industry faces other challenges. 

Lingering questions about barriers to growth

Rising costs and supply chain issues continue to plague manufacturers, as 62% of leaders worry about international trade flow disruption and 58% express concerns over geopolitical uncertainty. Although Brexit initially caused concerns, organisations are adjusting to new regulations and paperwork. Yet, nearly all manufacturers face ongoing supply chain and shipping issues. 

The Suez canal was just one high-profile incident during many months of delays. Bottlenecks at ports reflect an ongoing container shortage, with average container wait times for Asia to North Europe trade increasing by an estimated 35 days. The unprecedented problems even led Ikea to address delays with customers on Facebook, saying: “The surge in demand worldwide for logistical services at this time has resulted in a global shortage of shipping containers, congested seaports, capacity restraints on vessels, and even lockdown in certain markets.” 

The combination of challenges has skyrocketed spot freight rates. Mark Yeager, chief executive officer of Redwood Logistics, told American news station CNBC that “freight rates from China to the U.S. and Europe have surged 300%” compared to March 2020. Additionally, major shippers like Hapag-Lloyd increased congestion surcharges from North America to United Kingdom ports. Container production is expected to increase, but high consumer demand for products creates a cycle of shortages that may impede fast shipments of raw materials and goods manufacturers require for seamless operations. 

Furthermore, 50% worry about regulatory change, and 48% are concerned about exchange rate volatility. Each of these issues can hinder the flow of goods from manufacturers to retailers while increasing costs. To ensure rising prices and other concerns don’t become a barrier to growth, manufacturing leaders aim to enhance operations in various ways. 

Manufacturers’ top growth priorities  

Increasing operational efficiency and reducing costs are at the top of the list for the majority of industries. Compared to their global peers, manufacturing leaders are 15% more likely to focus on operational efficiency. Although organisational improvements are always a goal, the pandemic and ongoing logistics issues emphasised its importance. 

As leaders concentrate on reducing supply chain disruptions, it’s essential to ensure smooth delivery of materials and goods. Operational objectives vary by segment and consist of digital systems, automation, workforce upskilling, and many others. 

The third most crucial action is launching new products, with 43% of executives prioritising it. Consumer behaviour changes drive innovation as manufacturers search for ways to embrace opportunities. Moreover, 41% are focusing on organic growth versus 37% of their global peers. Using existing resources to enhance sales and increase output fits the overall goals for efficiency and cost reductions. 

In addition, 29% aim to invest in human capital, and 24% will prioritise the adoption of emerging technologies. Upskilling workers to meet upcoming technology needs will help manufacturers navigate forthcoming changes. To meet growth objectives, leaders also plan to address business vulnerabilities. 

Goals to strengthen manufacturing weaknesses

Similar to global leaders, manufacturers consider operational effectiveness a core weakness needing improvement in 2021. However, executives in manufacturing cite supply chain issues as a more significant vulnerability than their global peers. With 27% noting it as a weakness compared to 16% globally. 

Before the pandemic, international trade tensions highlighted procurement and distribution problems. But, lockdowns affecting factories in China and Asia also impacted numerous manufacturing segments. Port bottlenecks, shipping container shortages, and labour deficits compounded these issues. Consequently, executives are exploring alternative suppliers and considering sourcing raw materials regionally. 

27% of leaders also emphasise the importance of improving digital capabilities this year. Using technology to reduce errors and optimise processes can support supply chain, cost reduction, and operational goals. 

The manufacturing sector also considers brand strength a weakness, with 25% focusing on it compared to 20% of global leaders. This may be due, in part, to executives looking for opportunities in the D2C sector. As companies moved to online purchases, manufacturers lacking online presences faced stiff competition. To retain and grow market share, leaders must boost brand visibility. 

The expansion of digital capabilities

Digital capabilities vary widely across the manufacturing industry. Therefore high-tech sectors may prioritise technological expansion, whereas more traditional facilities may spend fewer resources in this area. Although nearly 50% of global leaders consider cloud computing important to future business success, only 35% of manufacturing executives say the same. 

Cloud computing, robotics process automation (RPA), and the internet of things (IoT) rank in the top three technology advancements considered most important for business leaders. Both RPA and IoT support operational efficiency while bolstering weak areas, such as operational effectiveness. Likewise, the technologies can help leaders address existing supply chain issues, with 88% agreeing that technological advancements will help overcome cross-border business challenges.

Steps to attract a skilled labour force 

Appealing to a diverse and skilled labour force continues to be a priority for manufacturers, with 81% of leaders saying a more diverse and inclusive workforce will ultimately improve financial performance. Also, 83% acknowledge that building diversity in the board and workforce is increasingly important, and 98% agree on the significance of ensuring equal support and opportunities, particularly in the current environment. 

Interestingly, 65% believe remote working will make it easier to source diverse talent in the future. Although many warehouse and factory positions require on-site workers, technological advancements can enable virtual oversight of critical processes related to safety and compliance. For example, cloud-based gas detection and air quality systems allow management to oversee and act on real-time safety data from any location. 

Factories that adopt state-of-art processes, equipment, and products may have an easier time attracting tech-savvy and diverse individuals. Moreover, growth objectives geared towards investing in human capital can focus on upskilling workers to navigate the shift towards RPA and artificial intelligence. 

Preparation for climate disruption

During the pandemic, many companies put green initiatives on the back burner. However, 72% of business leaders in manufacturing are making changes to their business to profit in the low-carbon economy. Specific segments, such as iron, cement, and steel production and chemical and paper operations, face extra challenges from potential regulations. Countries will continue to monitor direct greenhouse gas emissions and expect corporations to take action or face steep fines. 

Since many regions focus on a greener economy by 2030, manufacturing leaders must act now to ensure compliance and growth. Fortunately, potential tax credits or government initiatives may help manufacturers start small with green goals. By testing various tactics on a smaller level, companies can assess which activities are sustainable and explore ways to create greener businesses at scale. 

Climate concerns also expose potential opportunities for certain manufacturing segments, both with branding and products. Companies can leverage green capabilities to reach a larger market segment while producing goods geared toward climate-aware individuals. Furthermore, sourcing raw materials closer to home and increasing operational efficiencies can support sustainability objectives while helping manufacturers prepare for future climate disruption. 

Re-discovering the human connection

Like global leaders, 94% of manufacturing professionals agree that staff physical and mental wellbeing is a top priority for human resources. Additionally, 83% agree that social distancing and remote working make it challenging to deploy the value of the human touch in their businesses. Social distancing rules on factory floors and remote office workers affect company culture, making it difficult to sustain connections vital to employee morale. 

Indeed, 49% of executives miss collaborative working, 38% report it’s harder to establish trust remotely, and 34% say it hinders creativity. Vaccine rollouts, improved air filtering systems, and an expansion of safety protocols can make workers feel more secure in warehouses and factory lines while enhancing corporate culture. 

Confident in ability to adapt post-pandemic

Our HLB Survey of Business Leaders finds that 93% of manufacturing executives are confident in their ability to successfully steer the business in a new direction in response to the impact of COVID-19. Moreover, they feel more optimistic than their global peers regarding their company’s growth prospects, with 83% of manufacturing leaders expressing confidence versus 75% of global executives. Notably, 35% are very confident in contrast to 25% globally. 

Challenges create manufacturing opportunities

Any challenge opens the door for opportunity, especially for businesses nimble enough to adapt quickly. Although concerns remain about price increases, raw material shortages, and shipping delays, agile manufacturers can assess ways to mitigate issues going forward. As the demand for products and services increases during 2021, leaders who devise strategies that protect their bottom line and grow their market share can stand out from the competition.

Methodology

Findings in this article are based on 88 survey responses from manufacturing business leaders collected in quarter 4 of 2020, as part of HLB’s Survey of Business Leaders 2021. The majority of businesses surveyed are privately or family owned. For the full research report see HLB’s Survey of Business Leaders 2021: Achieving the Post-Pandemic Vision: leaner, greener and keener. 

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HLB Cross-Border Business Talks Podcast Series

Welcome to our podcast series, where we’ll be exploring the latest cross-border business topics with HLB thought leaders and special guests. Our podcast episodes provide bite-size analysis on today’s issues in 10 to 15 minute long episodes.

New episodes will appear regularly, as we share insights and ideas on a range of international business topics, from FDI and global economic trends, to the latest technology advancements in business and sector specific analyses. Sign up to listen to our podcast series via  Spotify or Apple Podcasts.

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    Eps 24: Emerging growth companies and M&A activity during the pandemic

    Eps 23: Cyber-risks in the age of remote working

    Eps 22: How the European investment climate is adapting to the New Normal

    Eps 21: COVID-19’s impact on the North American investment climate

    Eps 20: The ongoing impact of COVID-19 on financial reporting

    Eps 19: Transfer Pricing considerations in light of COVID-19

    Eps 18: Emerging technology trends for 2020

    Eps 17: Transforming business through AI

    Eps 16: Investor confidence remains uncertain but opportunities are ahead

    Eps 15: The role of Not-For-Profits in the development of Africa

    Eps 14: M&A Trends in Africa

    Eps 13: Cities of the Future

    Eps 12: Consumer behaviour changes and the response of global businesses

    Eps 11: Challenges and opportunities in today’s global real estate market

    Eps 10: Why does the world need Cyber Security Awareness Month?

    Eps 9: Blockchain intelligence: A compliance framework for crypto-currency transactions

    Eps 8: Made in Italy: How Italian companies are successfully conducting cross-border business

    Eps 7: The importance of soft skills in business

    Eps 6: A profession in transformation: Audit practices are becoming more technology driven and culturally diverse

    Eps 5: Investor confidence remains fragile

    Eps 4: Why the revision of ISA 540 is creating a more collaborative dialogue between auditors and clients

    Eps 3: The next generation of start-ups: Going across borders

    Eps 2: US-China trade conflict: In every crisis there are always opportunities

    Eps 1: Challenges and opportunities for foreign companies in the US in times of trade uncertainty

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    Fostering lifetime customers after COVID-19 with 2021 hotel trends

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    As more people receive a COVID-19 vaccine, travel may resume as early as the summer of 2021. But are Hoteliers ready for an influx of travellers with new needs and standards? 

    After a year of lockdowns and substantially reduced travel, hotel guests may have different expectations as they slowly start booking trips. While many are itching to enjoy exotic vacations and restore international business relationships in person, hotels can still anticipate easing into welcoming more guests rather than expecting a surge of traffic.  

    As guest expectations evolve after COVID-19, there are a few popular hospitality trends to keep your eye on this summer. Here are the top hotel trends to watch in 2021.  

    Communicating early and often 

    Many guests are more reluctant to book trips, worrying that a sudden COVID outbreak will cause cancelled flights and reservations. These guests want to ensure that if they invest in travelling, the amenities they expect will be available to them when they arrive. 

    That’s why many hotels are prioritising more active communication plans in 2021. Virtual communication like emails and app notifications will take centre stage this year to quell uncertainty.  

    Increasing direct, personalised communication after booking, during their stay, and after they leave can help guests feel more secure in their choice to stay with your hotel. These communications are a great time to update guests on cleaning protocols, open or closed attractions in the hotel or surrounding area, and check-in options. Even if cancellations are necessary or travel restrictions have changed, prompt notification can provide guests with a good customer service experience even when they can’t stay with you.  

    Follow up communication after a stay can encourage guests to leave reviews and offer feedback while fostering a stronger connection to your brand. Remarketing to these customers and providing high loyalty benefits will likely remain popular hotel marketing trends as travel volume rebounds.  

    Focusing on health and safety 

    In 2021, the best hotels will keep health and safety protocols at the forefront. That may mean contactless check-in procedures, flexible cancellation policies, and increased housekeeping needs.  

    Technology can play a major role in empowering a safe stay for guests. Keyless entry, contactless payment, and voice assistants in rooms diminish contact between guests and hotel staff for a safer visit. These features prioritise guest convenience, too.  

    Voice assistants can be a significant contributor to food and beverage success in 2021. Simplifying ordering from local restaurants and enhancing room service ordering capabilities can improve customer experience. Voice requests can also suggest and order products from a hotel’s grab and go market, reducing the need for restocking in-room concessions or managing a storefront in the lobby. 

    While some visitors may still need to quarantine when they arrive at a new destination, technology can make quarantine periods much more convenient and comfortable.  

    Expecting smaller travel parties 

    After a year of limited contact, many people have become more accustomed to spending time on their own. That may mean solo travellers and couple vacations become more popular than group travel, family vacations, and hosting conferences.  

    Adjusting room availability and pricing for small parties can attract those ready to travel. While solo travellers may only need a room with a king bed, they may also be more likely to upgrade to a room with a view or book an extended stay. Providing “business class” amenities to solo leisure travellers can set your hotel apart in 2021. 

    These travellers are less likely to have a pre-planned agenda, too. Promoting and booking local experiences for travellers can help cater to these guests’ desires, differentiate your brand, and provide additional income streams for your hotel. Adding these upsells helps hotels compete with Airbnb and other hotel alternatives. 

    Spending less on third-party sales channels 

    Direct advertising and retargeting past guests are becoming easy ways to save money as revenue lags. Pricy commissions to hotel aggregators and booking companies may not help your hotel get as many bookings as it used to this year. 

    Rather than investing in commission fees, reprioritising your marketing budget to improving your website’s booking experience or your mobile app experience can help you save money while still attracting interested customers. The Hotelier PULSE 2020 Market Trends report shows that over 70% more bookings came through direct channels year over year, so improving direct booking channels is a safe, cost-effective bet for many hotels in 2021. 

    Refocusing marketing spend on organic social media engagements and paid online advertising can help engage guests eager to return to travelling, too. 

    Stay ahead of the evolving hospitality industry 

    There’s no doubt about it: the hospitality industry will continue to see massive shifts throughout 2021 and the years ahead. While it may seem like a year to go back to the basics, there are still some crucial hotel trends you can implement to set your guest’s stay apart this summer.  

    As guests begin travelling again, providing an exceptional experience can mean gaining a lifetime customer. Following these trends is a great way to drive revenue in 2021 and foster a loyal fanbase for years to come. 

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    Addressing digital weaknesses to fuel growth opportunities

    HLB's Survey of Business Leaders - Financial Services analysis

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    Key survey findings at a glance:

    • Confidence in global growth is lower for business leaders in financial services. Only 20% of leaders believe the rate of global economic growth is likely to increase over the next 12 months
    • Undertaking joint ventures a priority for financial service business leaders
    • Digital capabilities considered a weakness, but adopting emerging technologies considered an action for growth over the next 12 months

    As lockdowns began across the world, many in the financial industry were able to complete services online. However, shutdowns of in-person banking posed difficulties for small or rural institutions. Generational differences in consumer technology use combined with less robust infrastructure left some firms scrambling to adopt contactless technologies. 

    Continued restrictions led to revenue losses as business owners and consumers weren’t able to pay loans. The loss of trade and bond values and low interest rates affected profitability. Moreover, business owners began drawing on open credit lines, leaving financial institutions with less liquidity.

    With interest rates expected to remain low, financial executives face a myriad of challenges in 2021. We assessed the confidence levels of executives with HLB’s Survey of Business Leaders. Then we pulled datasets for individual sectors, such as the financial services industry, where we looked at top growth priorities, potential vulnerabilities, and future outlooks.

    Financial executives are less optimistic about international growth prospects than their global peers, and only 12% say they’re very confident in their own growth prospects. Yet, an emphasis on growth tactics while reducing risks can help institutions navigate the current environment. Below we break down sentiments among global financial services leaders. 

     

    The economy: Uncertainty lowers confidence

    Financial services are unique because business activity reflects what’s happening across all industries. Institutions with less client diversity ran into more challenges during the pandemic than firms with assets balanced across multiple sectors. 

    Additionally, traditional financial services face stiff competition from fintech backed by a growing customer base of digital-first consumers. Today’s clients are comfortable using online financial services to crowdsource funds or access loans without partaking in the longer in-person banking process. Add in concerns about regulatory changes, potential rising tax rates, and rock bottom interest rates, and those in the financial sector have plenty to be concerned about. 

    Globally, 23% of business leaders believe global economic growth will increase. But, only 20% of financial executives feel the same way. In comparison, 26% of technology professionals and 25% of manufacturing leaders expect global economic growth to increase. 

    Like other business leaders, 87% of financial executives worry about economic uncertainty, and 78% express concerns over the impacts of COVID-19. The majority of financial leaders also acknowledge potential threats to growth, such as: 

    • 66% cite cybersecurity issues 
    • 65% mention tax risks
    • 63% refer to regulatory change
    • 62% specify social instability

    The combination of security, regulations, taxes, COVID-19, and social instability can lead to less faith in growth prospects for individual institutions. Although 65% reported confidence in their own growth prospects over the next twelve months, this lags behind the global average of 75%. 

    Growth priorities for financial services leaders

    Financial leaders face the same concerns as global peers when it comes to prioritising growth tactics. Nearly all business sectors list improving operational efficiencies and reducing costs as key ways to grow this year. Compared to global leaders, 11% more financial services executives believe the adoption of emerging tech is critical to growth. Furthermore, financial professionals prioritise joint ventures and strategic alliances higher than their global peers, with 12% more making this a top priority.  

    Even before the pandemic, leaders focused on mergers and partnerships to improve digital capabilities and expand technologies. But a shift to remote work and client behavioural changes meant institutions had to speed up digital transformations. Fintech firms, wealth management agencies, and the global payment sector rely on technology to provide secure client and employee tools. 

    To achieve growth, leaders understand they must reduce costs and develop new efficiencies while connecting with partners who can contribute technologies or new customer bases to balance the costs of implementing emerging technologies. 

    Analysing barriers to growth 

    Since 55% of financial leaders say digital capabilities are a weakness and believe it’s essential to growth, most executives will concentrate on expanding their digital platforms. The use of technology will also help leaders address other noted vulnerabilities, such as cybersecurity and talent acquisitions. To achieve results, 24% of respondents want to see more innovation, and 29% will focus on operational effectiveness. Strengthening these weaknesses can help the 60% of leaders with their goal of operational efficiency. 

    Also, digital capabilities differ by segment. The global payments industry takes the lead with contactless payment technologies supported by hefty fees for card-not-present (CNP) transactions. Wealth management companies look to increase access to big data analytics to generate client insights, track business performance, and deliver real-time investment advice. However, smaller institutions may prioritise consumer-facing technologies in rural areas where 5G roll-outs may influence banking decisions. 

    Although many banks are already digital, handling the influx of big data and using it for business decisions is still a challenge. Smaller institutions will continue to look for ways to generate insights from existing data to select the right mix of products and services to increase client acquisitions and retention rates. 

    It’s also important to look at the impact of potential regulations and tax increases. For example, the global payments industry saw rapid adoption of Europay, MasterCard, and Visa (EMV) technology during 2020. But many retailers are pushing back against exorbitant CNP fees. While the customer is paying in person, payment processors may charge the higher CNP fee. Increased pressure could result in regulatory changes, or business owners may seek out options with lower costs. 

    Future success relies on digital capability improvements 

    Like the majority of business leaders, cloud computing is a top priority for digital transformations. However, financial executives are less interested in the internet of things (IoT), virtual reality (VR), and augmented reality (AR) than global peers. Instead, financial services executives identified the following technological advancements as important to future business success: 

    • 37% artificial intelligence (AI)
    • 25% machine learning (ML)
    • 24% 5G technology
    • 23% blockchain

    Blockchain, AI, and ML

    AI and ML both serve prominent roles in the financial industry, so increasing these capabilities are vital. There’s a growing demand for simple online processes with growth in platforms that tout speed and contactless methods for securing funds, approving applications, and transferring money into accounts. AI and ML can automate much of the back-office processes reducing human errors and operational costs. 

    In our global survey, only 10% of respondents consider blockchain essential to future business success, but a digital ledger of transactions presents many opportunities for financial leaders. While some worry about potential revenue losses, others aim to leverage the technology to improve existing systems and reach new markets. With support from prominent financial institutions, such as JP Morgan, Citigroup, PNC, and Wells Fargo, more organisations evaluate ways blockchain can enhance their digital assets. 

    Moving forward, many of these technologies will become less of a perk and more of a necessity. As 5G rolls out, financial institutions can use AI, ML, and blockchain to: 

    • Enable cross-border payments in real-time 
    • Reduce transaction costs and the paperwork required to transfer funds internationally 
    • Comply with anti-money laundering and know your customer (KYC) regulations
    • Attract digital-first generations wanting convenience, transparency, and security

    Accessing talent and increasing diversity 

    With financial leaders listing talent acquisition as a weakness, finding new ways to attract and retain employees is essential. For many in the sector, a shift to remote work has helped break down barriers to talent acquisitions and opened the door to a vast pool of job candidates. Flexible work options allow leaders to source talent with the skills needed for planned technology advancements. In fact, 73% of financial leaders expect remote work to make it easier to source diverse talent compared to 65% of their global peers. 

    Indeed, diverse talent is a must for financial services leaders, with 87% saying building diversity in the board and workforce is increasingly important and 84% saying that a more diverse and inclusive workforce will ultimately improve financial performance. Furthermore, 96% agree on the importance of ensuring equal support and opportunities, particularly in the current environment.

    Greening of the financial services sector

    88% of business leaders in financial services are making changes to their company to profit in the low-carbon economy versus 77% of global peers, making it clear that those in the industry are already feeling the impact of climate change. Since the Network for Greening the Financial System (NGFS) formation in 2017, more executives are tuned into how climate changes affect their organisations. 

    According to the Morgan Stanley Institute for Sustainable Investing, “Between 2016 and 2018, climate change-related weather events caused more than $630 billion in economic damage worldwide.” Some of the effects already felt include defaults on loans in areas with extreme weather events, debtors impacted by environmental fines, or manufacturers in the plastic or water-heavy segments losing business from new regulations and water shortages. 

    Going forward, leaders aim to take measures to protect asset values and create value through innovation, which may be why 24% of financial leaders want to focus on improving weaknesses with innovation. Moreover, 70% of financial services leaders are reassessing their supply chain to source closer to home. Each of these steps may help executives increase operational efficiency and prepare their institution for climate change disruptions. 

    A new way of work

    Staying connected and ensuring business continuity during disruption is vital. Industry leaders believe they can leverage remote work to attract top talent, but many don’t feel an entirely remote workforce is the best solution. Furthermore, 86% agree that social distancing and remote working make it challenging to deploy the value of human touch in their businesses.

    The top issues with remote work include, 55% of respondents say remote work makes collaborative working harder, 42% believe it affects creativity, and 42% think it dampens empathy. However, similar to other global leaders, 89% of financial services executives say physical and mental wellbeing is a top priority for human resource departments. With this in mind, the hybrid model is a way to support wellbeing while offering the flexibility craved by top talent.  

    Looking ahead with optimism 

    Although financial leaders keep a close eye on global and internal growth capabilities, they don’t doubt their expertise to navigate challenges. 94%of business leaders based in this sector are confident in their ability to successfully steer the business in a new direction in response to the impact of COVID-19.

    With the possibility of future tax hikes, new regulations, and an increased focus on climate risks, financial service experts have their hands full. Intense focus on growth opportunities while increasing digital capabilities will allow institutions to cater to digital-first generations, mitigate risks, and remove barriers.

    Methodology

    Findings in this article are based on 93 survey responses from Financial Services business leaders collected in quarter 4 of 2020, as part of HLB’s Survey of Business Leaders 2021. The majority of businesses surveyed are privately or family owned. For the full research report see HLB’s Survey of Business Leaders 2021: Achieving the Post-Pandemic Vision: leaner, greener and keener. 

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    People and technology:

    At the forefront of European leaders' recovery agenda

    HLB Survey of Business Leaders 2021 - Europe outlook

    expect economic growth to decline 59% committed to building organic growth 45% confident in ability to steer their business in a new direction 90% acknowledge weaknesses in talent acquisition 28%

    Risk-averse, but recovery ready

    The pandemic still persists atop European leaders’ agendas. 81% named the ongoing consequences of COVID-19 as the main risk for their business in 2021. Uneven success with the virus containment across countries, manufacturing stop-starts, and repercussions around Brexit understandably made Europeans wary of the economic climate both within the region and globally. Admirably, local leaders managed to find a strong footing amidst the challenging (and constantly changing) operating conditions.

    European leaders are focused on improving operational efficiency, further enhancing their digital collaboration abilities, and carrying on with the adoption of emerging technologies. Tempered in their plans and actions, but fairly tech-savvy European leaders are realigning their business to benefit from the newly emerged digital opportunities, as well as the “green” agenda.

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    Key findings

    Lesley Hornung

    Head of Marketing & Digital

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    E-commerce and VAT: How can you prepare for new EU legislation?

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    On 1 January 2021, changes to e-commerce legislation in the UK came into effect. Following on from these, on 1 July 2021, the EU will change the VAT-legislation on e-commerce, bringing in a new set of rules, with different implications for distance sellers acting from within or outside of the EU. If your business is engaged in e-commerce, it is likely that it will be affected. During this webinar held on on 18 May 2021 our speakers highlighted the changes and what they mean for your business and clients.

    Speakers:

    Ludmila Frangu, HLB Spain
    Karin Korte, HLB Germany
    Maria McConnell, HLB UK
    Gianluca Panizza, HLB Italy
    Pieter Tielemans, HLB Netherlands

     

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    Switzerland

    Tax and financial measures associated with COVID-19

    30 April 2021

    In March 2020, the Swiss Federal Council enacted measures to combat COVID-19. These measures have been well implemented by the population. Its conduct avoided overloading hospital intensive care units. The number of new infections is stable or even declining. For this reason, the Federal Council intends to gradually relax the measures. From the 8th of June 2020, if the forecasts remain encouraging, all sectors of the economy should resume their activities.

    Tax measures

    • Possibility to extend tax payment periods
    • Interest on late payment of taxes from March 20 to December 31st, 2020 has been reduced to zero
    • Automatic extension of the deadline for submitting annual tax returns for 2019
    • Deadline for submission of the VAT statement and payment VAT tax may be extended to 3 months after the expiry of the deadline.
    • Some cantons (e.g. Geneva) provide for an extension of the deadline for tax at source rectification
    • Specific tax measures related to COVID-19 may differ from one canton to the other
    • The legal deadlines (deadline for lodging a claim against a tax decision) are not suspended and must therefore be respected
    • Swiss withholding tax and stamp duty are not affected and that interest on arrears therefore continues to be due for these taxes in the event of late payment
    • In Geneva canton
      • Deadline to submit individual and corporate tax returns: 31.05.2020
      • Deadline to submit tax at source rectification: 31.05.2020
      • Extension of deadline to request of information: 31.05.2020
      • Tax Bills and decisions postponed to 30.04

    Social security measures

    • Companies impacted by the crisis can request a temporary interest-free deferral of the payment of social security contributions (AVS/AI/APG/AC)
    • Interest on late payment of social security contributions until September 2020, will be reduced to zero
    • Companies have the possibility of adjusting the social contributions instalments in case of a significant reduction of total payroll (same as for the independent worker)
    • Employers may temporarily use the employer’s contribution reserves for the payment of employee contribution to the LPP (pension) occupational benefit scheme

    Employee and employer supportive measures

    • Companies can benefit from partial unemployment for a reduction or even a cessation of their activity in connection with the COVID-19 epidemic.
    • The employees should agree in advance for this measure, before the employer applies (amounts to 80% (for full-time employees) of loss of gain attributable to lost hours of work). If the application is accepted, the Employer receives reimbursement by the Unemployment Fund for the salaries paid. The decision is granted for (6) months and is renewable, if the crisis continues.
    • Based on new decisions announced by the Federal Council on April 8, 2020, the rules on partial unemployment have been extended and simplified.
    • Simplified notice request form and simplified statement form
    • Deletion of the notice period
    • Elimination of the waiting period
    • Widening of the circle of employees entitled to RHT indemnities to include, apart from employees with a undetermined duration employment contract: additionally employees on call (provided that they have been employed for 6 months in the company or that their activity rate varies by max. 20%), salaried managers of the company and their spouses working in the company, temporary workers, workers on fixed-term contracts and apprentices
    • Renewal of the notice request when the reduction in the work schedule lasts more than 6 months
    • Removal of the limitation of 4 months of RHT compensation in the event of loss of work greater than 85%
    • Elimination of the obligation to declare to the employer the income derived from another activity during the HTR and elimination of the taking into account of this income for the calculation of the loss of earnings

    Business support

    All self-employed people whose income subject to AVS contributions is between 10,000 and 90,000 francs are now entitled to the coronavirus loss of earnings allowance, in accordance with decisions announced on Thursday 16 April by the Federal Council. This allowance is intended for the self-employed who have suffered a loss of income because of the measures taken on March 13 by the Federal Council to combat the pandemic (closure or other loss of earnings).

    The amount of the allowance corresponds to 80% of the annual income converted into daily gain. The daily allowance amounts to a maximum of 196 francs per day. The allowance is calculated on the basis of the most recent contribution decision for 2019. For this, the annual income is multiplied by 0.8 and divided by 360 days. For example, if your income was 45,000 francs in 2019, the allowance is therefore 100 francs per day (45,000 x 0.8 / 360 days = 100 francs / day).

    The self-employed benefit from this allowance for a period of 2 months, from March 17 to May 16. This period is also valid for the self-employed who can reopen their business on April 27 or May 11.

    Indemnification in the cultural sector

    Loan requests (emergency aid to non-profit cultural enterprises) or compensation for financial losses (for-profit or non-profit enterprises; cultural actors) can be submitted from April 9, 2020 until April 30 2020 if possible, but no later than May 20, 2020.

    Accounting/Audit implications

    Companies benefiting from the COVID loans must follow strict rules about the use of the funds.

    • Companies cannot pay any dividends
    • Companies cannot lend funds to shareholder
    • Received loans should be used to pay current expenses of the company

    As auditor, we need to ensure that these rules are followed. If not, we need to make denunciations to the authorities that the funds are not properly used.

    Of course, there is also the “Going Concern” problematic that should be addressed in both Accounting and Auditing side.

    Bridging loans

    In view of the current COVID-19 epidemic, the Federal Council has adopted a package of various measures, with the objective to helping companies in difficulty to benefit from liquidity.

    The Federal Council has taken steps to provide businesses with access to bank loans. The loans COVID-19 (loans up to CHF 500’000) and COVID-19 PLUS (between CHF 500’000 and CHF 20’000’000) are put in place and provided by various banks.

    COVID-19 loans are fully guaranteed by the Swiss state and interest-free, without guarantee or other collateral, repayable over (60) months in principle. Companies should be seated in Switzerland and created before March 1st, 2020, should have suffered considerable economic damage as a result of the COVID-19 pandemic, particularly in terms of turnover and should be financially healthy, i.e. not in bankruptcy or debt restructuring proceedings or in liquidation. If accepted, this loan is available within few hours, upon receipt of full set of documents by the bank.

    COVID-19 PLUS loans are guaranteed by the Swiss state at 85% and interest of 0.5%, repayable over (60) months in principle. In addition to the conditions above companies should have requested for a COVID-19 loan before asking for a COVID-19 PLUS and pass a credit exam before. If accepted, this loan is available within few days, upon receipt of full set of documents by the bank.

    Other

    • Suspension of debt collection proceedings throughout Switzerland from March 19th to April 4th, 2020, in order to alleviate the situation of Swiss companies. During this period, debtors cannot be prosecuted
    • No court hearing to be held between March 16th and April 19th
    • Only urgent court hearings will be held from April 20th and henceforth

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    Sustainability trending with business growth

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    Sustainability has built up momentum over the past several decades. What some people thought would be a buzzword came to be a new perspective and way of thinking. It now incorporates all industries and businesses. Building sustainability into the brand doesn’t only help the environment, but it also helps businesses that want to cultivate company longevity.

    Environmental, social and governance (ESG) metrics and their impact

    Typically, government bodies and interested investors look at a company’s ESG or Environmental, Social, and Governance metrics. These metrics help to demonstrate how far along a company has advanced with its sustainability measures. Each letter stands for a different metric as sustainability is no longer only focused on environmental concerns but also on how it impacts social and governance matters. Modern sustainability means promoting the health of the environment, the health of the local community, and bringing economic profit back into the sector.

    Research done by McKinsey and Company promotes companies having a higher ESG rating as it has shown to mean a lower cost of equity and debt. These initiatives foster the health and wellness of the company’s community while still improving a business’s financial performance, meaning a win-win situation for everyone.

    Improve brand image = improve the environment

    It goes without saying that a company’s brand image pulls out your audience, allowing you to have more of a targeted reach to the people that will lead to conversion and profit. Using and promoting your sustainability initiatives to your customer base improves your brand image while simultaneously improving the environment and the communities the company works in. 

    Attracts customers and new Talent

    According to a survey done by IBM, almost six out of ten consumers are willing to alter their shopping habits to reduce the environmental impact of their purchases and almost eight out of ten indicated that sustainability is essential. Consumers might drive the change, but it is ultimately up to the company to make it, thereby attracting more of those willing to convert to more sustainably focused brands.

    Improved financial performance

    Ultimately, without increased financial performance, most companies wouldn’t be interested in promoting sustainable initiatives. As the interest and research around them have increased, promoting and sustaining these initiatives has become more affordable. Since these sustainable production methods or support have become more affordable, the benefits often outweigh the financial siphons.

    Increased investment interest

    Sustainable strategies are necessary to cultivate a competitive edge, as seen by 62% of company executives. That competition isn’t just for a consumer base but for investment interest. Sustainability isn’t going away, and many investors consider it the route of the future. Jumping on it now and implementing those ESG initiatives is an excellent way to attract more investment interest.

    Building a successful company often involves keeping one eye on the present functions and another on future possibilities. Modern sustainable enterprises have been proven to lead to business growth in more ways than one. What is stopping you from going green?

    Manosij Ganguli

    Global Sustainability Advisory Leader

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    HLB Cross-Border Business Talks Podcast Series

    27 April 2021

    Welcome to our podcast series, where we’ll be exploring the latest cross-border business topics with HLB thought leaders and special guests. Our podcast episodes provide bite-size analysis on today’s issues in 10 to 15 minute long episodes.

    New episodes will appear regularly, as we share insights and ideas on a range of international business topics, from FDI and global economic trends, to the latest technology advancements in business and sector specific analyses. Sign up to listen to our podcast series via  Spotify or Apple Podcasts.

     

     

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    Eps 24: Emerging growth companies and M&A activity during the pandemic

    For many emerging growth companies, the pandemic has presented unique opportunities. We sit down with Chris DeMayo, HLB’s Global Emerging Technology Leader, Patrizio Prospero from HLB Malta and HLB USA’s David Sacarelos to discuss how these companies have navigated M&A activity during 2020 and the expectations for 2021.

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    Eps 23: Cyber-risks in the age of remote working

    In light of Cybersecurity Awareness Month, HLB’s Chief Innovation Officer Abu Bakkar is joined by Global Advisory Leader Jim Bourke and HLB Digital Partners Almerindo Graziano and Gustavo Solis to discuss the most pressing cyber-risks of today, the lessons learned from lockdown and the road ahead for CTOs to protect against cyber-crime in the age of remote working.

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    Eps 22: How the European investment climate is adapting to the New Normal

    In a follow up to our North America podcast, we sit down with Bart de Volder from HLB Netherlands and David East, Head of FDI at Bureau van Dijk to discuss in what ways the European investment climate looks bright, despite the ongoing pandemic.

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    Eps 21: COVID-19’s impact on the North American investment climate

    The global investment climate has been considerably impacted by the pandemic. We sat down with Anant Patel, HLB’s Global Transaction Advisory Services Leader and David East, Head of FDI at Bureau van Dijk, to discuss the North American investment climate and the impact COVID-19 is having on cross-border activity.

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    Eps 20: The ongoing impact of COVID-19 on financial reporting

    COVID-19 has disrupted most professions across the globe with auditing being no exception. We sat down with HLB’s International Assurance Committee Member Jennifer Chowhan and HLB UK’s Caroline Monk to discuss the broader impact the pandemic is having on financial reporting. This includes some of the key issues global businesses and their auditors need to be aware of in light of operating in the “New Normal”.

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    Eps. 19: Transfer Pricing considerations in light of COVID-19

    With the abrupt change in economic conditions and likelihood for ongoing challenges, existing Transfer Pricing policies may no longer reflect economic realities. We sat down with HLB’s Global Transfer Pricing Leader, Carlos Camacho and Marina Gentile from HLB USA to  explore some of the issues being encountered and transfer pricing policy considerations when addressing short-term business disruptions as well as considerations for developing long-term strategies.

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    Eps. 18: Emerging technology trends for 2020

    Smart technologies such as IOT and blockchain are having a huge impact on global businesses. We sat down with HLB’s Patrizio Prospero and Jim Bourke to understand what new emerging technologies trends are on the horizon for 2020 or if we can expect businesses to embrace these existing technologies more.

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    Eps. 17: Transforming business through AI

    Business leaders across the globe consider Artificial Intelligence (AI) the most important technological innovation for business future success. We sat down with HLB’s Jim Bourke and Claus Frank and guest speaker Heiko Altrichter from AI research laboratory Laxford Capital to understand the benefits and limitations of AI for business.

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    Eps 16: Investor confidence remains uncertain but opportunities are ahead

    David East, Director of Product Strategy at Moody’s Analytics working for Bureau van Dijk and Andrew Mosby from HLB’s Global Accounting and Compliance Services group discuss how increased levels of uncertainty are affecting European FDI trends.

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    Eps 15: The role of Not-For-Profits in the development of Africa

    What role does the Not-For-Profit sector play in the development of Africa and overcoming key challenges such as social integration, unemployment and poverty alleviation? HLB’s Clensy Appavoo and Dave Springsteen discuss the matter.

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    Eps 14: M&A Trends in Africa

    Africa remains an attractive destination for buyers, with its growing middle class, improving economies and increasingly stable political environment. HLB’s Marco Donzelli sits down with Neermal Shimadry from MCB Capital Markets, William Hunnam from Orbitt and Clensy Appavoo from HLB Mauritius to discuss the latest M&A trends across the continent.

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    Eps 13: Cities of the Future

    Some of the world’s most well-known cities are often the most competitive. They must compete for talent and investment to ensure they become global hubs for businesses and people alike. In our latest podcast, Justin Kreamer, Senior Vice President, Partnerships, New York City Economic Development Corporation; Jason Mariarathanam, Practice Leader of Advisory Services HLB Netherlands; and Robin Chin, Senior Partner, HLB Singapore discuss what has made the top performing locations world leaders and where we see the ‘cities of the future’.

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    Eps 12: Consumer behaviour changes and the response of global businesses

    Consumers no longer buy simply on price or brand name -there are now a variety of factors that influence their choices. For global businesses, keeping on top of the latest trends can be a challenge. Barry Sheldon, President & Chief Operating Officer, Illy Caffe, North America & Jim Bourke, HLB’s Global Technology Advisory & Digital Solutions Service Leader discuss the change in consumer behaviour and how global brands are responding to these challenges.

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    Eps 11: Challenges and opportunities in today’s global real estate market

    Mark Robinson from Colliers International and HLB’s Global Real Estate Leader, Ralph Mitchison discuss how the global real estate market is well positioned for growth and why disruption in the market is not just limited to technology.

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    Eps 10: Why does the world need Cyber Security Awareness Month?

    With the number and variation of cyber-attacks continuing to increase, cyber security remains a top concern for business leaders across the globe. On this episode, HLB Chief Innovation Officer Abu Bakkar and Global Technology Advisory Leader Jim Bourke discuss the importance of education and implementation of best practices to minimise cyber security risk.

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    Eps 9: Blockchain intelligence: A compliance framework for crypto-currency transactions

    How is blockchain changing society and the way we do business? Together with HLB’s Patrizio Prospero, HLB CEO Marco Donzelli discusses the societal impact of blockchain technology and regulation around crypto-currency transactions with Giancarlo Russo, Founder of Neutrino and Alessandro Perillo, Innovation Manager at Young Platform.

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    Eps 8: Made in Italy: How Italian companies are successfully conducting cross-border business

    While in Milan, HLB Italy Chairman, Marco Gragnoli, discusses the Made in Italy industry and how Italian companies are successfully conducting cross-border business.

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    Eps 7: The importance of soft skills in business

    Professor Adrian Furnam and HLB’s Bettina Cassegrain discuss how having the ability to influence, persuade and negotiate with others, both inside and outside an organisation, is crucial for leadership success and business growth.

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    Eps 6: A profession in transformation: Audit practices are becoming more technology driven and culturally diverse

    Julie Carman, Head of Global Strategic Alliances and Digital Transformation for Accountants at Sage and HLB’s Jim Bourke discuss the tech and culture driven evolution of the accounting profession across the globe and how it is creating value for clients.

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    Eps 5: Investor confidence remains fragile

    David East, Director of Product Strategy at Moody’s Analytics working for Bureau van Dijk and HLB’s Marco Donzelli discuss global FDI trends and how escalating trade tensions and policy uncertainty is impacting investor confidence.

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    Eps 4: Why the revision of ISA 540 is creating a more collaborative dialogue between auditors and clients

    Bettina Cassegrain, HLB’s Global Assurance Leader and Jennifer Chowhan, Leadership Team Member for HLB’s International Assurance Committee, discuss the importance of the ISA 540 revision and how a new emphasis on professional scepticism will impact and improve accounting estimates.

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    Eps 3: The next generation of start-ups: Going across borders

    In the heart of Silicon Valley, HLB’s Industry X.0 Marco Donzelli, Chris DeMayo and David Sacarelos together with guest speaker Lei Wang, Chairman and CEO of Huahai Technology discuss the next generation of start-ups and the challenges and opportunities to grow across borders in today’s global business environment.

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    Eps 2: US-China trade conflict: In every crisis there are always opportunities

    Zhenge Zhao, General Representative of China Council for the Promotion of International Trade in the USA and HLB’s Coco Liu, Chief Regional Officer Asia Pacific discuss the trade war between China and the US, the impact on FDI activity between the two economies and the opportunities the current situation presents.

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    Eps 1: Challenges and opportunities for foreign companies in the US in times of trade uncertainty

    Trade conflict and Brexit are cause for turbulent times for international businesses. Stephen Cheung, President of the World Trade Center Los Angeles and HLB’s Yan Jiang, Senior Tax Manager specialised in US-Asia cross-border activity discuss current challenges and opportunities for foreign companies operating in the US.

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    Turkey

    Tax and financial measures associated with COVID-19

    26 April 2021

    Short Time Working Compensation

    Companies/ Individual Tax payers that have partially or wholly interrupted their activities are given the right to apply for a short-time working compensation for their employees salaries in Covid 19 pandemic period.

    Short time working compensation will be paid by Social Security Administration Unemployment Fund directly to employees.

    Short-term work compensation will expire on 31.03.2021 if it is not postponed.

     

     

    Ban of Cancellation of Labour Contract and Non-Paid Leave Compensation

    According to law No. 7244, termination of the employment contract by the employer and taking the employee on unpaid leave is prohibited until 17.05.2021, except for ethical provisions.

    Employers have right to give non-paid leave to employees without employees approval. In this time non-paid leave compensation will be paid by Social Security Administration Unemployment Fund directly to employees as 47,70 TL daily.

     

    Credit Package

    It is announced that for micro and small firms in order to support employment, only once, a Loan Guarantee Fund (KGF) will be provided with a loan of up to 100.000,00 TL without repayment for 6 months, which can be extended to a maturity of 24 months.

     

    VAT Rate Reductions For Certain Services

    According to the presidential decree (published in the Official Gazette dated 31.07.2020), reduced VAT rates applied on some goods and services from 31.07.2020 to 31.12.2020.

     

    It was extended until 31.05.2021 in accordance with the presidential decree (published in the Official Gazette of 23.12.2020).

    VAT rate for some services were decreased to 8% and 1% until 31.05.2021.

    VAT rate of workplace rental service was reduced from 18% to 8%. until 31 July 2021.

    VAT rate for  education services was decreased from 8% to 1% until 30.06.2021.

    VAT rate for restaurants is reduced to 8%; for other small restaurants the previous rate of 8% is reduced to 1%.

    The Turkish Ministry of Finance announced the following measures in relation to tax obligations:

    * Introduction of accommodation tax was deferred until January 2022.

    * The withholding tax rate for rental of business premises and rental of vehicles is also reduced from 20% to 10% till 31 July 2021.

    * 1.000,00 TL of aid has started to be provided to families in need by Social Services Ministry.

    It is also announced that 750,00 TL rent allowance will be made in places where the workplaces are located in big cities and 500,00 TL will be paid in other cities and these payments will continue for 3 months.

     

    New Economic Reforms announced for 2021-2021-2023

    The package that is announced 16th March 2021 aims to grow the Turkish economy on the basis of investment, production, jobs, and exports. Turkey focused on public finance, inflation, the financial sector, current account deficit, and employment as part of macroeconomic stability.

    According to reform package a tax exemption for low-income tradesmen will be introduced. Approximately 850,000 tradespeople who are subject to small business taxation rules, such as hairdressers, plumbers, haberdasheries, carpenters, lathe makers, tea shop operators, tailors, and repairmen will be exempted from income tax.

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