Why its important to prioritise mental health in the workplace, especially post-pandemic

Marina Kooijmans, Chief People Officer


Every 10 October, World Mental Health Day reminds people around the globe that mental health issues matter and should be supported. Mental health considerations are particularly important in the workplace, where many people spend a third or more of their waking hours.

The last 18 months, due to the COVID-19 pandemic, took a toll on many professionals’ mental health, whether we realise it or not. The effects from the pandemic on mental health are not likely to change soon.

A recent global study by Motivosity found well-being has plummeted during the pandemic. Consider:

  • Anxiety symptoms increased from 6.33% to 50.9%.
  • Depression symptoms increased from 14.6% to 48.3%.
  • Stress symptoms increased from 8.1% to 81.9%.
  • PTSD increased from 7% to 53.8%.

The mental health issues encountered due to the pandemic put employee engagement – a factor that’s highly related to productivity, retention and profit – in jeopardy as companies navigate a continued remote work situation.

What’s at Risk?

Changing work environments and always-on work technology are contributing to employee stress. The following aspects of work have suffered since the start of the pandemic.

  • Mental health and well-being: According to the Kaiser Family Foundation, in January 2021, 41.4% of adults reported symptoms of depressive disorder and/or anxiety disorder, compared to 11% in January 2019.
  • Ability to disconnect: More than two-thirds (69%) of employees have experienced burnout symptoms while working from home since the pandemic, CNBC reports. Despite burnout, 59% are taking less time off than they normally would, while 42% aren’t planning to take any time off to decompress.
  • Work-life balance: Since the pandemic, remote workers in the U.K., Canada, the U.S. and Austria have seen a sustained 2.5 hour increase to the average work day, according to Bloomberg.
  • Workload: For people in diverse industries, from healthcare positions to on-demand workers, workload has increased in demand. Furloughs and job cuts have also increased the workload for many workers still in pre-pandemic positions. According to Harvard Business Review, since the pandemic, out of workers whose workplace well-being has been negatively impacted, 56% have seen increased job demands.

Mental health greatly affects your employees’ ability to do their jobs effectively and efficiently. Mental health issues in work environments can also lead to physical health issues, from heart disease to chronic pain.

To combat these risks and reduce the effect of a pandemic on employees, Deloitte research shows professionals primarily need these three basic human needs met at work:

  • Trust
  • Safety
  • Connection

At your organisation, you can take steps like the following to protect the mental health of your workers and its effects on your business.

1. Increase access to mental health resources

Provide mental health coverage as part of company insurance plans. Offer free counselling sessions from licensed professionals. Expand your definition of “sick days” to include time off for mental health. Promote mental health tips and resources in company newsletters.

2. Consider a drastic change to overall company flexibility

If you have remote employees and are able to, consider having deadline-based work, rather than set office hours. Some employees work better at night compared to early morning, for example. A flexible schedule encourages work-life balance for employees.

Also, consider enabling work-from-home capabilities at least some of the time. A 2021 study reported by Harvard Business Review found 88% of knowledge workers say they’ll look for flexibility in hours and location next time they look for a new position. Hybrid office solutions are highly appreciated by a lot of people. The hybrid office combines the best of both worlds: the comfort of working from home and the necessary social connection in the office.

3. Destigmatize mental health struggles from the top

Show workers you support them by promoting mental health care from the top down. Most people experience mental health issues at some point in their lives. When managers, executives and other leaders at your company share their struggles, that destigmatises the need for mental health support, which might benefit some of your workforce.

4. Express appreciation for your team members

Employee recognition is associated with talent retention, organic growth and employee productivity. Spotlight a job well done in team and company-wide meetings, in online communications and via rewards. Celebrate, even small, successes as a team regularly. It is the little things that matter.

5. Communicate frequently and consistently

Poor workplace communication can lead to stress, unmet expectations and needs, arguments, high turnover, low morale and dissatisfied clients. Keep employees abreast of company developments so they trust in and feel connected to your company.

6. Budget for home equipment

Not everyone enjoys working from home. Gen Z, in particular, is more likely to feel negatively about remote work. 

One challenge of remote work is a lack of equipment. Set employees up for success by providing secure, easy-to-use devices that enable them to complete all necessary tasks. Support them with technology solutions comparable to what you would do for the office environment.

7. Train management in how they can talk about mental health and well-being with employees

Gallup research shows managers account for 70% of variance in employee engagement. Managers should be at the forefront of protecting employees’ mental health, by providing their team members with the right resources and support. Offer mental health training to employees and teach managers symptoms to look for regarding emotional distress or substance abuse. Regular check-ins are a great way to support employees. Listening can be very beneficial, to give employees the feeling that they are not alone in a difficult situation. And overall, managers should give employees the feeling they are valued.

8. Look for signs of anxiety and stress

Mental health issues like stress and anxiety can lead to poor productivity, absenteeism and a higher incidence of safety issues in the workplace. Identifying mental health signs earlier can help your business prevent these issues. 

Encourage a proactive and supportive approach. Have managers promote help from qualified mental health professionals to their team members.

Mental health affects everyone

Mental health is an invisible but important part of workplace success. Most people have experienced some type of mental health challenge during the pandemic, whether it was stress from adjusting to remote work, or difficulty finding a work-life balance.

As an employer, you can take a proactive approach to supporting your employees’ mental health. Provide mental health resources, encourage an open dialogue, offer training for managers and company leaders, and acknowledge the challenges your employees are facing. Create a mental health strategy to improve productivity and results for your business, while at the same time improving the engagement and belonging of your people.

Marina Kooijmans

Chief People Officer


Auditors: Be proud!

Blog by Bettina Cassegrain, HLB's Global Assurance Leader

24 September 2021

This year, #AuditorProud celebrates ‘the pivotal roles auditors have played in maintaining the integrity of our economies and our businesses’ and the fact that ‘the work they do is more important than ever…’.

Like every year, I decided to do a quick search on the internet to see if anybody is talking about the central role we have undoubtedly played during the pandemic and if #AuditorProud is being discussed.

Interestingly enough, and like in previous years, I found very little. The only auditors who are proud and willing to say so appear to be the ones in Australia and New Zealand. The website of Chartered Accountants Australia and New Zealand (CA ANZ) came up right at the top of my search, acknowledging the many challenges auditors have had to face over the past 12 months and actively encouraging their members to join in the weeklong celebrations.


And yet, our colleagues from Australia and New Zealand are not the only ones who made noteworthy contributions during a truly unprecedented period. Many of us have not only transformed our relationships with clients during these very challenging months but also those within our teams, giving relationships a different focus and making them more meaningful. As a result, an environment where audit quality can improve and stakeholder confidence thrive is steadily emerging. Still, rather than taking a brief moment to focus on the positives and gather some strength to embrace the future, we continue to hide our light under the bushel, as if we were scared of showing our profession in a positive light.

Understating the positive aspects of our profession may simply have become what we are used to, and I am not certain when it happened nor why. All I remember is applying for trainee positions in London during 1999 and not being the only one. We were thousands at the time, and when we had finally landed our dream job, we were extremely proud of our profession and our firm. I get the impression that in many parts of the world audit is no longer the dream career it once was and figures show that demand for staff in the audit market far outweighs supply.

Is it at all conceivable that we as auditors are at least partly responsible for the current situation?  How can we expect others to see us in a positive light when we do not do so ourselves? How can we complain about stagnating recruitment numbers and the negative reputation of our profession when all we talk about is the expectation gap, declining fee levels, never ending audit scandals, difficult to navigate auditing standards and long hours?

Our stakeholders and the wider public will see us the way we see ourselves. If we cannot find anything positive to say about being an auditor, how can we expect anybody else to do it for us?

So, we may not all be used to feeling #Auditorproud, but there really is no better time to try.  Thanks to the many efforts auditors worldwide have made during the past year to assist our clients, our wider stakeholder community, and the economy as a whole, we truly have something to celebrate:  our resilience, our collaborative spirit, our never faltering optimism and our capacity to devise new best practice when it was most required. These are all great attributes, and yet they largely go unnoticed.

At HLB, we often talk about adding value and becoming future proof auditors. It seems to me that we have made a significant step in the right direction during the past year. Let’s therefore all join in the 2021 #AuditorProud celebrations, share and enjoy our successes, strengthen our teams and get ready to continue playing the pivotal role we have been playing recently.

Join the conversation on social media using #AuditorProud.

Bettina Cassegrain

Technical Director & Global Assurance Leader


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


Achieving an equal future in a post-COVID world

Blog by Marina Kooijmans, HLB's Chief People Officer

8 March 2021

In the last 12 months we have seen real acceleration in terms of digital transformation and agile business models. But one of the more radical shifts has been the global acknowledgement of social and economic inequalities across society. Namely how these inequalities affect the workforce of the future and the intake of talent, specifically diverse talent. While the business case for a more diverse workforce has long been held, the conversation has been amplified due to the pandemic. And one group that has been greatly impacted are women.

This year’s International Women’s Day theme, #choosetochallenge, focuses on the major issue’s women face that prevent them from achieving both their personal and professional goals, such as gender bias, discrimination, stereotyping and pay inequality. As a global organisation, we are fully in tuned with the social, economic, cultural, and political impact women make and we are choosing to challenge why it is important to speak out in promoting change.

The impact on women in the workplace

Gender bias is an ongoing obstacle that continues to both downplay and limit the accomplishments of women. We know from our unconscious bias study in the accounting profession, that career progression has been stunted for female professionals. The same could be said for other career fields where biases either discourage women from pursuing certain career paths, or they are shut out of top positions in their field. Stereotyped roles fail to acknowledge their abilities while they often balance the juggling act of navigating family responsibilities and careers. On top of all this, the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) reports that on a global scale, women continue to make an average of nearly 20 percent less than their male counterparts, even when performing the same jobs.

Unfortunately, women have been markedly affected by the economic fall out of the pandemic. Among the impacts they face includes:

  • Job losses due to pandemic-related business closures, which disproportionately impact women;
  • Reductions in overall pay or hours due to social distancing measures, which chips away at already reduced wages;
  • Increased responsibility for children due to day-care closures and the need for home-schooling, prompting larger numbers of women to leave the workforce or abandon their own businesses.

These impacts increase the current pay gap for women and have repercussions for the future. By the end of 2021, UN Women predicts more than 100 million people may be pushed into poverty. Of these, more than half are women. Additionally, as employment protection schemes in various countries come to an end, there is a potential risk that we will see further exits of women from the workforce.

Networking and allyship in times of crisis

The pandemic’s impact on women reveals ongoing opportunities to address gender bias, discrimination, and the pay gap. But what steps can we take to achieve an equal future? Through networking and allyship.

The International Labor Organization (ILO) encourages everyone to become an ally, not just women, in the workplace both at home, at work, and across industries. This includes:

  • Identifying biases when it comes to sharing responsibilities at home;
  • Assessing the environment in your workplace for gender bias and discrimination;
  • Reviewing company policies and procedures to ensure they support equal rights and pay;
  • Initiating or supporting existing programs that support inclusion, including mentorship programs and well as work flexible schedules and family leave;
  • Encouraging women to have a greater voice on the job and increased roles within the company.

Networking also plays an important role in overcoming gender bias and pay disparity. When the opportunity arises, choose a woman as a protege, and share your insights and industry connections with her. In the new virtual space we are all navigating, it may seem that networking is unachievable. Nevertheless, technology has enabled us all to connect and while it will never replace the human touch we are all missing, is has enabled us to continue collaborative working. Reaching out to your network, even if it is just digitally, can allow you to stay visible. Build communities on social medial sites and plan online networking events to help build connections among employees and in specific fields.


#Choosetochallenge: What actions can you take?   

While the pandemic may have heightened gender inequality, it has also shone a light on what needs to change. Having diversity in your workforce and leadership, leads to diversity of thought which enhances creativity and innovation and ultimately improves business outcomes.

Global business leaders are acknowledging that there is now a real opportunity to reset and build back better and women will be at the heart of this. They are recognising the importance of wellbeing and how this influences the job satisfaction of their entire workforce. Therefore, organisation’s need to take stock of how they are fostering a collaborative and forward-thinking culture which puts its people at the heart. Some of the questions an organisation can ask themselves include:

  • How is your organisation thinking about performance evaluations in light of the pandemic?
  • What steps are you taking to redesign the way your business operates?
  • How are you challenging attitudes in the workplace or wider industry?
  • Are you providing the same advancement opportunities for your female employees as you are your male ones?
  • Do we have the right leadership to drive greater innovation and challenge group thinking in our organization?

Planning for the future

Choosing to challenge gender bias and transform unfair practices in the workplace helps to level the playing field for female workers. It also helps to attract talented women to industries while building the confidence they need in planning for and achieving their personal and professional goals. This benefits individuals, families, and society at large. It can also have an impact on talent development in the future.

Diversity and inclusion are key drivers of our talent strategy here at HLB. By leveraging the power of our network in supporting women in their careers we #choosetochallenge and call out gender bias, discrimination, and stereotyping.

Join us, and the conversation, on social media using #choosetochallenge.

Marina Kooijmans

Chief People Officer


COVID-19 – A catalyst for a new model of global collaboration

Blog by HLB Global CEO, Marco Donzelli

20 January 2021

It’s been an interesting exercise to conduct research with clients and business leaders across the globe these past few months. We have just launched our annual global survey of business leaders last week, exploring how executives intend to Achieve their post-pandemic vision to be leaner, greener and keener.

What our research has revealed is the extent to which the lack of global and national coordination around the pandemic has exposed the vulnerabilities in our systems for living, working, trading, plus amplified many familiar challenges for governments across the globe.

Decisions, by governments and businesses, on whether to open or close borders, whether to open or close shops, what vaccine to develop and how to manage their roll-out, all have significant knock-on effects for business and society. Each decision also reveals the trade-offs involved and their impacts on equality, fairness, access to good healthcare, all critical questions governments face to keep people safe from harm, and, at the same time, active in a healthy economy and labour market.

The importance of good government

Despite the disruption and the uncertainty, an impressive 75% of business leaders we’ve surveyed around the globe are confident of growth in 2021. Of course, this ‘stat’ (an average across 55 countries and nearly 600 business leaders) includes some relatively positive sentiment from executives based in countries managing the pandemic well.

In China, for example, 87% of business leaders are confident in their own growth prospects for growth in 2021. It’s not just a case of ‘first in and first out’ of the pandemic, there’s more to it. Experience in managing flu outbreaks, such as SARS, has better-prepared economies in the Asia Pacific (such as China, Korea, Vietnam, and Japan) to effectively contain the pandemic and its economic impacts. More critically, these countries benefit from significant government investment in physical and technological infrastructure as well as well-funded healthcare systems to support physical and economic wellbeing. An adept approach to the crisis, in turn, fosters more trust in governments to manage the pandemic and more support for policies designed to contain further outbreaks (including adherence to restrictions).


Business response to considerable challenges

Given the lack of a coordinated global response, business leaders in many developed economies, by contrast, have been left to their own devices to navigate the pandemic. Leaders have had to adapt their operations, starting first with ‘battening down the hatches’, reducing headcount and focusing on cash flow. Improving operational effectiveness and reducing costs are the top two areas of focus for our respondents in 2021.

Over a third are concerned about increased protectionism and nearly half are worried about the impact of international trade flow disruptions on their operations. Relatively few are outsourcing, in fact some will be onshoring activities and many more working to automate functions. 88% of leaders we surveyed are turning to technological advancements to help overcome cross-border business challenges. The pandemic has accelerated digital transformation as technology has become critical in sustaining business activities.

Beyond peak-globalisation

It’s clear to me that global trade maps, designed around 20th-century ideologies of the free-trade and commercial movement of goods, capital, services and people, are experiencing a shakedown.

At the same time as trade is turning inward, the public are observing governments across the world delivering varying degrees of success in managing the global pandemic. Citizens and businesses expected effective, fair and timely government interventions but their governments have been found wanting. Failings have fuelled further mistrust and misinformation, even prompting social unrest. Indeed, more than half of our respondents are concerned or very concerned about social instability, as public mistrust extends beyond the confines of the pandemic to other causes (from equal rights to climate change). Together, these two factors are prompting a re-assessment of the effectiveness of free-market forces to deliver a stable future foundation for the wellbeing of citizens and the economy.

A new spirit of multilateral cooperation

The free-market mantra around less-government intervention, less-regulation, and the idea that the market will solve for everything, is being replaced by a call for active government investment to support business and save lives. The first step by many governments has been the rollout of significant and coordinated economic stimulus packages — a good start.

Coincidently, or perhaps consequently, a change of leadership in the US is likely to usher in a period of confidence in a more active and effective government. My hope is that globalisation, as we knew it, is likely to be replaced by a new spirit of multilateral cooperation between nations, with relationships based more on trust and values than on trade and capital alone. This change could prove instrumental in solving some of the world’s biggest problems – from COVID19 to Climate Change.

Seeing the light, in a dark year

Blog by HLB Global CEO, Marco Donzelli

8 December 2020

I had such high hopes for the 2020s as we entered the first year of a new decade. Little did we know what was to descend on the world’s citizens and business leaders when HLB launched our inaugural Survey of Business Leaders back in Vienna last January.

Many of the clients we have been speaking with have had to park transformational plans aiming at a new decade of change and growth, to focus on surviving waves of viral infections as they manifest across geographies.

The COVID-19 pandemic has been in full flow throughout the period we have been conducting research with clients and business leaders for our second annual Survey of Business Leaders. The results are now being analysed, and I would like to share some early findings.

As expected, our survey confirms that these are challenging times for many businesses. Nevertheless, change also presents opportunities for new ways of working. Marco Mormone, Co-founder and Partner at Arca Blanca who we have interviewed as part of our research cautions “legacy businesses are going to be heavily challenged, if you are launching with a new business, or if you are quite an agile organisation that can quickly adapt to a new way of working, this is the time for those organisations to thrive.”

In addition to presenting new opportunities, I’m convinced that the experience of coping with the pandemic has created a more thoughtful cohort of business and government leaders across the globe. For instance, we’re seeing this spirit of cooperation amongst business leaders in the biotech and pharmaceutical markets.


One cluster of early findings from our research which I can’t resist sharing ahead, is the very positive response from global business leaders regarding key social imperatives:

  • First, most of the business leaders we have surveyed, believe that how they respond to events which impact society reflects on their brand reputation and how customers think of them.
  • More impressively, over 90% of business leaders indicated that it is even more important, in the current environment, that employers ensure equal support and opportunities to all their people.
  • Equally encouraging, more than three quarters of respondents are telling us that the business recovery process is an opportunity to make changes to their operations in order to profit in the low-carbon economy of the future.

I already sense a change of priorities towards a more long-term, and a more positive and inclusive future for consumers, employees, citizens, and business. Perhaps these are the first signs of light at the end of a dark year? And, maybe 2021 can mark a proper start of a more enlightened decade for business and society?

I look forward to sharing the full results of research at our launch event in January. Please sign up here to reserve your space:

Register for global launch event

Brexit: A new economic reality fast approaching

5 November 2020

The Brexit transition deadline is rapidly approaching and the window for a post-Brexit trade deal is closing fast. At the beginning of 2020, just before the pandemic hit, the UK left the EU with the Withdrawal Agreement, which sets out how the country will exit the union, but not the terms of the relationship going forward.

This means that the new relationship needs to be negotiated, with trade deal terms attracting the most attention among many areas of the divorcing process, which comes as no surprise given how many aspects of the economic reality will be affected by it.

Impact on trade

As the UK’s largest trade partner, the EU is accounting for around half of its trade. If the UK leaves without a trade deal, it could cost the country more than the pandemic. A recent study found that in the long-run, Brexit – even if followed by a trade deal – would decrease UK’s GDP by 3.1% and exports by 6.3% compared to a scenario where the UK remained in the EU. However, without a trade deal, the cost would increase to 3.9% of GDP.

By leaving the EU, the UK left trade agreements, including the single market and customs union, which were the foundation of the member countries’ relationship. The single market agreement means that countries share the same rules on product standards and access to services, while the customs union allows goods to travel among EU countries without border checks and taxes (tariffs).

Without these or any other agreement in place, British goods exported to EU countries will be subject to tariffs, which will make them more expensive relative to domestic European tariff-free goods.

However, there are also non-tariff barriers to trade to consider. They include a wide range of factors that raise trade costs, including border controls, dealing with different regulations, rules of origin checks, etc.


The Northern Ireland protocol

Due to the sensitive historical legacy, the border checks between Northern Ireland and the Republic of Ireland – the only land border between the UK and the European Union – will not be imposed.

Under the Northern Ireland protocol, effective from January 2021, Northern Ireland will continue to enforce the EU’s customs rules and follow the single market rules to prevent border checks with the Republic of Ireland from becoming necessary. 

However, goods from other parts of the country traveling through Northern Ireland to the Republic of Ireland as the final destination will need to be checked and taxed. That means that a regulatory and customs border in the Irish Sea will be necessary to enable checks on goods entering Northern Ireland from Great Britain (England, Scotland and Wales) to ensure that any taxes, known as tariffs, on EU-bound goods are paid and that products comply with EU standards. If the goods stay in Northern Ireland, the taxes will be refunded. The extent of these checks is still to be agreed upon.

The Northern Ireland protocol will be necessary even if the UK and the EU reach a trade deal that eliminates tariffs on each other’s goods because EU law requires some product-standard checks, even if tariffs are eliminated.

Impact on financial markets and financial services sector

The UK’s departure from the European Union will have a considerable long-term impact on the UK and the EU’s financial services sector. From 31 December 2020, when the transition period comes to an end, if there is no Brexit trade deal for financial services, no concessions and no equivalence determinations, the UK will be treated like any other so-called “third country.” This will burden the UK’s financial system as the EU regulatory framework imposes additional registration, equivalence and other criteria on third-country regimes and entities.

For example, the London Stock Exchange’s Main Market will no longer qualify as an EEA regulated market, which will impact the eligibility of debt securities listed there as ECB (European Central Bank) collateral.

Also, prospectuses for public securities issuance approved by the UK FCA after 31 December 2020 will no longer be able to take advantage of passporting, a beneficial feature that allows a prospectus approved by a relevant authority in one EEA jurisdiction to be used to make a public offer or to admit to trading on a regulated market in another.

Equivalence, or the concept that one jurisdiction’s regulatory or supervisory regime is of an equivalent standard to that which applies in another jurisdiction, may serve as one of the solutions. It allows the authorities in one jurisdiction to rely on supervised entities’ compliance with equivalent rules in another jurisdiction. Applied in the Brexit case, it would allow the UK to retain some privileged rights to access the EU market in certain areas. Still, this privilege could become conditional on other concessions from the UK in the trade negotiations such as fishing.

Although the focus remains on the impact of Brexit on financial services in the City of London, given its role as a global financial centre, there are significant clusters of financial services in other UK cities such as Edinburgh, Leeds and Bristol that will also be affected by decisions on issues such as equivalence, regulatory alignment and the ability of UK firms to access the single market. Also, the ease with which closely related professionals such as lawyers are able to travel to the EU for work will be affected. But compared to the City, regional financial clusters may find it harder to adjust to financial services trading relations outside of the single market.

How European producers will be affected

After the United States, the UK is the EU’s biggest export market for goods. With the UK as their second-largest export market, European exporters also need a deal with the UK – most notably car manufacturers. According to official trade figures, road vehicles were the biggest item on the list of EU goods imported into the UK last year. Valued at €53 billion, road vehicles represent almost 20% of all UK goods imports – and around half of all UK’s vehicle imports came from the EU.

 Another sector is agriculture, food and drink as the UK is the top destination for the EU’s agri-food exports since 73% of UK agri-food imports come from the EU. Both sides’ pharmaceutical sector will also be affected, especially if a mutual recognition agreement (MRA) on inspections and testing doesn’t become a part of an EU-UK free trade agreement.

Preparing for the Post-Brexit world

The beginning of the next year will bring major changes regardless of the post-Brexit deal’s nature, with tariffs and regulatory red tape kicking in once the country leaves the EU’s Single Market and Customs Union. Jobs will be lost, but jobs will be created. Recent research reports that demand from the EU countries makes around 12% of the final demand for UK goods and services, translating into around 3.3 million jobs. Not all of these jobs are necessarily at risk from Brexit, but in some sectors like financial services, job losses are likely, while in others, Brexit could see an increase in jobs. 

While UK businesses need to be as prepared as possible, the final outcome and its implications to business will depend on the specifics of the deal that will replace the current arrangements. Given that the UK economy has grown increasingly reliant on the service sector, both as the main driver of job creation and as a source of export demand, the country’s access to export markets in services will be crucial going forward.

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Did it really take a crisis to make us better auditors?

23 September 2020

“There comes a time in every life when the past recedes and the future opens. It’s that moment when you turn to face the unknown. Some will turn back to what they already know. Some will walk straight ahead into uncertainty. I can’t tell you which one is right. But I can tell you which one is more fun.”

When I used this quote by Philip H. Knight, the founder of Nike and a fellow CPA, in my 2019 message, I knew it was relevant but I could never have imagined how much it would gain in significance barely six months later.

With the COVID-19 pandemic and its many implications on how we work, what we have encountered since is the real-life version of the Black Swan event I only knew from strategy lessons at business school. The kind of situation we never expected to have to face, the one where we are standing at the abyss and the future does literally opens up.


Yet, when we examine a range of significant historical events, we see that crises and upheaval have always played an important role in bringing change. When we are faced with what seems to be unsurmountable difficulty, we move forward. One might even argue that we need a crisis to overcome our fears, spring into action, and excel.

It appears to me that the above theory holds true for us auditors. When discussing Auditor Proud Day with colleagues last year, conversations were dominated by negativity: fee pressure, difficulty to recruit and retain young talent, ever-growing expectations and the expectation gap in general were recurring topics.

Looking back at the past six months, the picture is a very different one. Once the first shock was over, many of us experienced a speedy adoption of technology, an increase in communication, collaboration across the traditional boundaries of service lines and, most importantly, an almost unprecedented amount of thought leadership and adaptability with one overarching goal: servicing our clients as best we could and helping them through the crisis.

Rather than lamenting the existence of an expectation gap and responding to it with more of the same, auditors have demonstrated that they could do so much better. Many of us, myself included, have been surprised more than once by what I call the ‘silent heroes’: Colleagues who have always been working quietly in the background and who have suddenly risen to the challenge and made a real difference in the lives of their co-workers and our audit clients.

Maybe someone had a particular gift with technology that suddenly became invaluable, maybe a person excelled in quickly adapting our audit methodology to an environment where all of our work had to be carried out remotely, or maybe someone could just speak to team members and clients with the empathy we all so desperately need these days to keep going.

It is truly inspirational to listen to ideas from all over the world and feel the determination not to see our situation as a never-ending disaster but an opportunity to write new success stories together.

The crisis has forced us to modify our audit approach to one with a lot more client focus. Risks are being analysed differently and solutions adapted, business opportunities around cyber security, GDPR, taxation and a variety of attest services represent a true value add for both firms and clients, communication might be virtual but is often more tailored to individual client situations than before. For the first time in many years, I am getting the impression that we might be closing the expectation gap little by little.

Hermann Hesse said ‘I have always believed, and I still believe,  that whatever good or bad fortune may come our way, we can always give it meaning and transform it into something of value.’

In 2020, auditors have done exactly that: Many of us have not only transformed their relationships with clients but also those within our teams, giving relationships a different focus and making them more meaningful. I for one did not expect that we would be able to turn a crisis into so much positive change and, on the occasion of this year’s Auditor Proud Day, this is indeed something to be genuinely proud of.

Join the conversation on social media using #AuditorProud.

Bettina Cassegrain

Technical Director & Global Assurance Leader


Growing through acquisitions:

A strategy for growth

16 September 2020

Value creation in any business is rooted in growth. All other things being equal, higher-growth businesses enjoy greater transaction multiples (and, consequently, value) than do companies with lower growth rates. Growth in a business comes from five different sources:

  1. Expanding the product set offered
  2. Reaching more customers through existing channels
  3. Expanding sales and distribution channels
  4. Vertical or horizontal integration
  5. Creating new strategic business lines

All of these growth sources can be built internally or bought through acquisition.

To buy or to build?

How do owners or managers decide to buy or build? Generally, teams make decisions based on the tradeoffs between the two, and strategic need will drive such decision making. The tradeoffs that enter into these decisions revolve around speed (a buy decision can execute faster than a build strategy), cost (generally higher and front-end loaded for an acquisition) and risk (a buy decision is usually “all or nothing” while a build decision provides an “out” if the strategy does not execute to satisfaction).

Due diligence and strategy for buying

A growth strategy centered on making an acquisition (or series of acquisitions) should be designed as any other strategy. What is it that you are trying to acquire? The list of attractive attributes of acquisition candidates typically include:

  • Speed of market entry
  • Revenues
  • Customers
  • Supply chain security
  • Product lines
  • Intellectual property
  • Management talent
  • Capacity absorption
  • Operating synergies

Other considerations during an acquisition include:

Affordability: The affordability of an acquisition and having financing sources available to close the deal must also be considered in developing a strategy. Commercial lenders remain inwardly focused on existing portfolios and customers’ credit quality and needs and may shy away from “story” deals that rely on pro forma synergies to work. That said, opportunities always exist, so take the time to develop these relationships.

Culture: Keep cultural fit of a company firmly in mind when considering possible sellers. Take the time up front to create granular criteria of strategic and cultural fit as well as the cost to acquire. Once this criteria is developed, assemble target lists of potential acquisitions on which to focus outreach efforts.

Not knowing the answers to the above questions creates the risk of wasting scarce resources (time, cost of analyzing opportunities, etc.). With a solid acquisition strategy and plan in place, companies will not be reviewing multiple opportunities with targets that do not fit their needs or be distracted from the day-to-day of running the business with sellers that will not fit.

Post-acquisition success

A significant challenge to succeeding with an acquisition strategy is the work involved in integrating operations after the transaction has closed. Even if an acquisition strategy is well designed and executed, not taking the time up front to consider how organizations will be merged can prove costly and time-consuming, and in extreme cases, acquisitions that do not have a properly planned integration fail. Start early and involve the entire management team, particularly finance and HR, once it becomes apparent that a prospective target is becoming a true opportunity. Assess which management team members from both companies will be retained and which will either be superfluous or the best of both organizations.

Involve the rest of the advisory team as an acquisition begins making progress. Both outside legal and accounting teams should be involved from the start. They can help work through term sheets, structures, documentation and how a financial statement combination will look post-deal, as well as tax implications. Experienced attorneys and accountants will provide independent guidance and advise when to put the brakes on before making costly mistakes. Consulting advice before you begin the process to establish acquisition criteria is an important service our Transactions Advisory professionals can assist you with. We support you by building a holistic advisory team to ensure harmony on a company’s side throughout the process.

Looking to the future

The COVID-19 pandemic has created unique opportunities for acquisition success. Competitors may be under financial stress and have need of a lifeline to survive. Strategic customers or suppliers may find themselves in similar straits and may be seeking a merger. In many industries, acquisition multiples have declined materially during the pandemic, presenting more attractive valuations for buyers and making financing potentially easier to obtain.

By David Horwich, HLB USA

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Ireland and Apple successfully appeal EU Commission tax ruling

17 July 2020

In what for many was a surprising outcome, the General Court of the European Union (GCEU) has overruled the decision by the European Commission in respect of Ireland’s tax treatment of Apple.

The Commission ruled in 2016 that Ireland had “granted illegal tax benefits to Apple” resulting in State Aid and ordered Apple to pay €13.1bn plus interest, in unpaid taxes, an accusation both Apple and the Irish government refuted. The Commission’s challenge was not to Ireland’s tax laws, but rather the application thereof.

Whilst the specifics of the Apple case centre around a variation on a now defunct tax structure known as the “Double Irish”, and therefore would not be applicable to foreign corporates looking to Ireland today, the key point on trial for Ireland was the confidence in, and international view of, the Irish tax system’s integrity.

The decision comes as a significant win, not only for Apple but also for the Irish economy. As noted by Ireland’s Department of Business, Enterprise and Innovation, “Foreign Direct Investment (FDI) has been, and will continue to be, a key plank upon which Ireland’s economy is built. Its contribution to the economy is far-reaching and it’s estimated that 20% of all private sector employment in the State is directly or indirectly attributable to FDI”. If anything, that importance is understated as anyone looking at a list of the top 50 companies in Ireland can testify. A decision in favour of the Commission would have cast a shadow of doubt on Ireland’s reputation internationally as a business location and could have impacted the competitive world of attracting FDI.

After much scrutiny, the episode has highlighted two key strengths in Ireland’s approach to FDI. Firstly, it found that Ireland adheres to Irish and European rules in relation to levying tax and operates on a level playing field. This will surely help restore any lost confidence resulting from the 2016 ruling. Secondly, and perhaps most significantly, when the case came against Apple, the Irish government stuck by the world’s largest taxpayer. Rather than accepting the €13.1bn in tax, which evidently would have been wrongful to do, they instead looked to the long term significance of the decision. The government fought to maintain the integrity of Ireland’s tax system and FDI commitments rather than take a short-term political gain. In doing so it has reinforced Ireland’s position as one of the world’s leading places to do business.

The European Commission has two months and ten days to appeal the decision to a higher court. It was widely believed an appeal would be inevitable, regardless of the outcome of the hearing, given the time and resources already committed to the case. Such an appeal may continue to drag the situation out for some years, but for now, at least, Apple and Ireland have won the first battle, sending an important message to other markets, and will approach the next step with renewed confidence as the judgement was robust and decisions in the GCEU are rarely overturned.


By Bruce Stanley, HLB Ireland

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Government bailouts and the opportunity to rebuild better

13 July 2020

The COVID-19 virus hit the world economy swiftly, taking a devastating toll on businesses of all sizes, from small restaurants and family-owned retail shops to multinational corporations. Governments have stepped in to provide more than US$9 trillion in various forms of stimulus to mitigate the long-term fallout.

In the short term, these loans and cash infusions have propped up the economy and provided assistance for business recovery, but the virus has proven relentless and the road to full recovery looks long. The vast majority of countries remain on the brink of recession, which means that more government stimulus is likely to come.

The “Great Reset”

As leaders debate what type of aid to provide businesses, and how much, there is the possibility for governments to use their leverage in rescuing distressed corporations as an opportunity to create a better future — not just back to normal, but a new normal where we emphasise social and environmental responsibility over corporate profits.

The virus essentially hit pause in our lives, and the World Economic Forum has called for a “Great Reset” as we prepare to push play again. We need to reflect on the lessons of the 2008 economic crash, where stimulus packages led to the largest increase in carbon emissions in 50 years, followed by a decade of sluggish recovery that only exacerbated some of our biggest global challenges, so we can use this crisis to create meaningful change.

By attaching the appropriate strings and conditions to bailouts, governments can encourage responsible business practices to address climate change, income inequality, and job insecurity, while protecting against future shocks by creating a more resilient economy.

Rebuilding greener

Just weeks before news of a novel coronavirus started trickling out of China, world leaders were meeting in Madrid for a United Nations climate summit. On the agenda were severe warnings from leading scientists that we are much closer to a global “point of no return” than previously thought. Instability in Antarctic and Greenland ice sheets, sea level rise, and global temperature increases are exacerbating severe weather events and forcing the mass migration of millions living in vulnerable coastal regions. Warmer ocean temperatures may forever alter Australia’s Great Barrier Reef, leading to a profound change in marine biodiversity. Deforestation is devastating the world’s largest rainforest.

In the wake of COVID-19 as governments weigh the requests for assistance from large corporations, some are attaching conditions and requirements to the financial aid — a sort of “green tax” — to address these looming climate crises.

Australian lawmakers, for example, required that a portion of state aid for Australian Airlines be used to hit specific targets for reducing carbon emissions. The final deal includes requirements to reduce total emissions by 30 percent by 2030 and eliminate short-haul flights where a train route is available, among others. France followed suit with its own conditions for an Air France bailout.

Other opportunities include:

  • Providing more subsidies to diversify energy options, adding more renewable energy to reduce reliance on coal and other fossil fuels
  • Strengthening initiatives surrounding sustainability in food production, and requiring farmers to invest portions of bailout money to reduce pollution
  • Requiring disclosure and more stringent reporting about firms’ financial risks and exposure related to climate change or other dual economic-climate threats

Income inequality and job insecurity

Furthermore, COVID-19 has uncovered social inequality across a great number of countries. While pre-pandemic the global economy looked good on paper, the record-breaking global stock markets belied a system where real wealth for most people was stagnate or declining.

Hoping to avoid a repeat of the short-sighted business practices, financial risk exposure, and profiteering that corporations engaged in following the 2008 bailout after the Great Recession, governments should be taking a long-term view by requiring aid to be used for initiatives that prioritise worker well-being over profits. For example, Denmark, Poland, and France all denied bailouts to any company with headquarters in a “tax haven” country, reasoning that companies purposely avoiding taxes should not be able to request handouts from those same tax coffers.

Governments have also attempted to leverage financial aid to stem the tide of employee layoffs. In the US, large companies that took stimulus money must keep at least 90 percent of employees on its payroll through September 30 (some have already announced plans to start laying off employees in October, calling into question how effective the incentive will be). The Netherlands has promised to cover 75 to 90 percent of employees’ salaries for companies that avoid layoffs.

Governments should also use their leverage to limit payouts to companies with large stockpiles of cash, or those loaded with excessive debt from paying out huge dividends to shareholders. Setting limits on share buybacks or dividend payouts makes sense when taxpayer money is used to prop up corporations.

In addition to these short-term measures, now is also a time to consider massive investment in long-term strategies to improve wages and increase wealth for the “squeezed middle” and the poor, such as:

  • Tax credits or incentives for first-time homebuyers, since homes are the largest asset for most middle-class families. Just last week the UK announced a stamp duty holiday, making it more attractive to buy a house in England and Northern Ireland.
  • Investments to make university education more affordable for more people without crippling debt upon graduation. The increased interest in online schooling can play a big role in making education more accessible to everyone.
  • Investment in public infrastructure to guarantee low- and middle-income families access to things like high-speed internet and affordable transportation.

A fork in the road

Right now we are sitting at a significant fork in the road. On one side is the choice to continue down the same road we have been on for decades, a return to “normal” where corporate profits take priority while middle and low income families are further marginalised, and environmental destruction is ignored. On the other side is the choice to force industries and corporations to address climate change in real and meaningful ways, and to strengthen wages for workers who make up the middle and lower income classes to the benefit of the entire global economy. Governments hold the power to require these changes, and COVID-19 poses a unique opportunity to exercise that power.

Germany reduces VAT rates to help strengthen economy

4 June 2020

In order to strengthen the economy and to mitigate the economic consequences of COVID-19, the German government decided on Wednesday evening, 3 June to reduce the VAT rates applicable from 1 January 2007 for goods and services supplied after 30 June 2020 and before the end of 31 December 2020 (hereinafter: change period). The standard tax rate is to be reduced from 19% to 16% and the reduced tax rate from 7% to 5%. The corresponding implementation is pending and can be expected.

It is unclear whether those responsible for this measure were aware of the very considerable amount of additional work this will trigger in the companies. It remains to be seen whether this will actually stimulate the economy or whether it will burden it further.

What does the measure mean for you as an entrepreneur?

First of all, we assume that in the short term a letter from the German Federal Ministry of Finance will be issued on the subject, which will clarify individual questions, – as has been the process in the past – whereby the facts of a tax rate reduction are singular; up to now the tax authorities have only had to deal with tax rate increases. The following therefore attempts to anticipate the implementation of the reduction and to provide an initial overview of which levels of the VAT assessment may be affected.

The general rule is:

  • The time of the agreement of a contract/the order/the offer or a concretely agreed service/delivery date are irrelevant; therefore, the tax rate cannot be “shifted” by this. To determine the tax point for VAT purposes, it’s decisive, when the supply actually gets carried out.
  • The invoice date is also irrelevant. By means of simplification, invoices often state that the invoice date is also the date of delivery/service. However, if this is actually not true, the wrong tax rate may be shown and the wrong amount of VAT calculated; apart from the fact that the deduction of input tax from such an invoice is at risk if the date of delivery/service is incorrect.
  • This means anyone wishing to benefit from the reduced tax rates; for example, because there is no right to deduct input tax (public bodies outside the business sector; entrepreneurs who carry out transactions for which the right to deduct input tax is excluded, such as doctors/banks/hospitals) should check whether it is possible to postpone the actual receipt of supplies/services until the change period, if necessary, in order to reduce the amount of non-deductible input tax.
  • It will become even more attractive for online trading to opt for the “German” tax rate, because the tax rate difference to most EU-member states will increase.
  • It is currently unclear if, for example, it will be possible to use the final invoice in the change period to retroactively reduce the tax rate on advance invoices that have already been invoiced (and possibly paid) and thus trigger a refund from the tax authorities.

We would like to point out the following points separately:

VAT – tax point

VAT (on agreed payment) arises with the supply of the delivery or service. If this point in time lies within the above-mentioned change period, the reduced tax rates are to be applied. If the deliveries/services are provided before 1 July 2020 or after 31 December 2020, the “old” tax rates (19% or 7%) are still or again to be applied.

Please note: If you do not take the reduction into account and continue to invoice at the previous tax rates, you will also owe the excessive VAT amounts until an invoice correction and the refund of overcharged VAT has been made (§ 14c UStG – German VAT Act) – regardless of the amount actually paid by your customer.

VAT (on received payments) arises upon receipt of the payment for the supplies/services rendered. If this point in time lies within the change period, the reduced tax rates are to be applied. If the remuneration is received outside the change period, the conventional tax rates are applied.

Input tax deduction

If you receive incoming invoices that were invoiced for deliveries/services provided in the change period, please note that only the tax owed by law may be claimed as input tax. Even if your contract partner ignores the reduced tax rates, this means that “only” the correct input tax can be claimed (i.e. 16% or 5%). When paying the invoice, please make sure that you only pay the correct gross amount and ask your contract partner to correct the invoice. Make sure that discounts are calculated correctly.

Reverse charge/tax liability of the service recipient

If you make (outgoing) sales for which the tax liability is shifted to your contractual partner, nothing changes for you; the billing of net invoices with the corresponding invoice note remains. If, however, you are the recipient of the service, the tax liability in the case of a service/delivery supplied in the change period must be calculated according to the reduced tax rates and only an input tax deduction of the corresponding amount must be claimed.

Intra-EU acquisitions

The same applies to intra-EU acquisitions, i.e. the purchase of goods from other EU-member states. These are also subject to the reduced tax rates if they are purchased during the change period; in particular when claiming input tax deduction.


We are hoping for detailed regulations for the specific implementation in the areas of partial services/partial payments/down payments/preliminary invoicing/services such as rental, leasing, maintenance etc. Furthermore, special features arise in the case of vouchers issued.

Article by Lutz Meyer

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