Unconscious Bias Awareness Study
Unconscious bias, binding the business success
The extent to which unconscious bias has an impact on our society and the professional services industry is hard to capture in full since the very nature of the problem is evasive and unintentionally cultivated for years. What can be attested with certainty is that a consequence of biased behaviours is an industry lacking diversity, particularly at higher organisational levels. Furthermore, unconscious biases constrains the career progression for certain groups of professionals and is becoming a bottleneck to diverse hiring. All of these practices gradually, but inevitably, erode a firms’ success.
At HLB we believe that it is our duty as professionals to analyse the as-is state of any matter and advise on the best steps towards the desired to-be state. In this report, we look objectively into the current practices and identify where and why bias overtakes objectivity and what can be done to address and resolve unconscious bias within the professional services industry.
While the number of female public accountants has steadily increased, there is still a significant lack of female leadership within the industry. We discovered that several unconscious biases as the cause of this. One example is that the traditional career curve for women in accounting is rarely accommodating motherhood. In addition, the pressure to deliver measurable results and clock in the billable hours is another core factor that eschews the career progression curve for female CPAs.
In addition, the career progression curve for non-white candidates of both genders differs significantly to that of white professionals. Despite the increased number of graduates coming in from different backgrounds, CPA firms are still slow to embrace diverse hiring practices. Our own findings suggest that even in richly diverse areas, there are no shortage of diversity at entry-level, but few non-white CPAs progress up the ranks, with less than 10% promoted above the mid-level positions. In addition, structural reasons such as systemic barriers to education and access to opportunities can explain the lower rate of diverse candidates entering the industry.
While the supply of candidates from diverse backgrounds to the industry has steadily increased since the start of the 21st century, the demographic split within CPA firms is still strongly focused on white males as both our internal and external research suggests. Our profession has been too slow in acknowledging the importance of diversity and inclusion in the workforce, as recognised by 55% of HLB Managing Partners. Yet it’s widely agreed that moving the needle towards more equal power distribution isn’t just a social priority; it’s a key driver for the future viability of the industry.
The lack of diversity in leadership positions comes as a direct result of practices and unconscious bias which exists on the grassroots level within the industry. With a compromised career curve, fewer female and non-white candidates manage to make their way to leadership positions, with many giving up on either their professional growth or the industry. This has a direct impact on the attractiveness of the profession, with 67% of HLB managing partners agreeing that prospective employees look at the demographic make-up of the firm and leadership team when assessing an employer brand. Ultimately, homogeneous leadership structures are holding firms back from realising their full potential and driving outcomes for their clients.
Unconscious biases are small bricks that support our mental ‘mortars’ and stand at the foundations of many organisational practices. Removing all of them at once is neither feasible nor sustainable. However, gradual minor adjustments made both on the grassroots and leadership levels can yield a substantial impact for the professional services industry. Addressing biased behaviours at the leadership level is a priority as such targeted action can facilitate with further dissemination of the practices to the lower levels. The Maintaining the ‘status quo’ on the matters of diversity isn’t an option either as inaction will further heighten the issues of inequality and drive new talent to other industries.
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Can MSME business owners turn COVID-19 into a life-changing opportunity?
Micro, Small and Medium Enterprises (MSMEs) represent the largest number of businesses in the world. They are also the most vulnerable to business disruption caused by COVID-19. The United Nations for Industrial Development Organization (UNIDO) classifies the COVID-19 pandemic as a disaster and issued guidance for MSME business recovery. The United Nations Office for Disaster Risk Reduction (UNDRR) defines a disaster as “a serious disruption of the functioning of a community or society involving widespread human, material, economic or environmental losses and impacts, which exceeds the ability of the affected community or society to cope with using its own resources”. The ability of MSMEs to survive depends on a variety of factors, include entrepreneurship and vision of the owners, financial capacity, nature of the product, the magnitude of the impact, aid from government and development agencies, among others. Irrespective of the different factors, it is believed that with the right support, MSMEs cannot only survive but turn COVID-19 into an opportunity for a brighter future. In this white paper, we will explore the different stages of business recovery for MSMEs based on disaster risk management cycle theory, adopted by key development agencies, and case study examples from Egypt.
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Five strategic priorities to succeed in the new world
The post-pandemic world arises
To increase your post-pandemic readiness and succeed in the new world, we have identified five strategic priorities to unlock business transformation: Digital acceleration, Workforce transformation, Consumer acumen, Cost management, and Supply chain reinvention.
As we head down a path of uncertainty, the risk of sitting tight and not investing in transformation will decrease company growth or possibly result in lost market share. To maintain competitive in the new world, business leaders must adopt greater agility to anticipate change and mitigate its impact. To drive sustainable change in the organisation and re-write the manual, tough questions need to be asked within boardrooms. This report helps you identify the strategic priosities to focus on and the actions to take.
Five strategic priorities to increase post-pandemic readiness
While business transformation through digital technologies has been on the CEO agenda for over a decade, the lockdown measures in response to COVID-19 have forced businesses across all sectors to rapidly adopt technology enabled processes to keep operations running remotely. From home-working arrangements to online sales and distribution channels, they are here to stay. Businesses that do not prioritise digitisation and the adoption of new technology will fall behind the competition and will not be able to keep up with the needs and demands of customers and employees alike.
The well-being of your workforce is directly linked to business performance. In the post-pandemic world, interactions between people in both the physical workplace as well as via digital collaboration platforms must be adjusted to fit a more agile working model. This also includes more flexible arrangements to up or down-size the workforce more easily depending on business needs. Key to success is fostering a flexible and open culture within the organisation.
Findings from HLB’s Global Survey of Business Leaders revealed that pre-pandemic, just 24% of business leaders planned to focus on customer acumen in 2020 to strengthen their business. But in a post-pandemic world, we identify consumer acumen as one of the five strategic priorities in order to succeed. The wants and needs of your customers today are likely to look different from what they did before. With consumer spending in decline, B2C businesses in particular need to make sure their products, sales channels, customer service and brand messages meet the new demands of their customer base.
The foreseeable future remains uncertain, and in times of uncertainty, cash is king. The pandemic has shed light on the importance of cash preservation and cost control. Strategic cash control and cash management will be key to survival of businesses during times of change. The key to your continued survival will be your ability to quickly adapt to unanticipated disruption. Business leaders should centralise cash where possible and optimise operational efficiency and productivity.
The pandemic has uncovered a variety of issues and inefficiencies in global supply chains. One common challenge is replacing or augmenting manual processes which are dependent on the action of individuals. For example, manually inputting information—whether it be for purposes of filling orders or completing a multitude of tasks—can get easily delayed and slow the supply chain process. Data analyses to inform procurement processes and decision-making on inventory requirements can be made more efficient through the use of digital technology.
3 Reasons why you should invest in the Dominican Republic
Luis Quezada, HLB Santo Domingo
At only a two-hour flight south of Miami, we often think of the Dominican Republic as a Caribbean paradise for luxurious beach vacations. However, the country has so much more to offer. Especially for foreign investors looking to find new business opportunities in the Caribbean region. Here are 3 reasons why you should invest in the Dominican Republic:
1. Political and economic social stability
The Dominican Republic has seen substantial GDP growth and significant reduction of poverty over the past two decades. The country’s solid legal framework and various incentives for business, as well as other forms of support from Government entities, provide a political and economically stable business environment. The Dominican Republic has trade agreements with almost 50 countries. Since the 1990s, the Government of the Dominican Republic has been carrying out important reforms in trade policy with the task of increasing the competitiveness of the economy and achieving greater participation in international markets. The main functions of the agreements are trade liberalisation, and the elimination of a wide variety of tariff and para‐tariff restrictions that contribute to expanding and strengthening the country’s export capacity. While the domestic language is Spanish, English and French are commonly spoken business languages. The country’s geographical location and strong infrastructure to North and Latin America and the rest of the Caribbean, make for a strategic location to establish foreign branches.
2. Real estate investment opportunities
Across many industries, various advantages are put in place to level the playing field for foreign businesses, such as fair treatment for local and foreign investors, repatriation of 100 percent of profits, free conversion of funds, free access to international currency in local commercial banks and the Central Bank and a fast and easy registration process. The real estate industry is not an exception and foreign investors are treated the same as local investors. They can buy real estate throughout the Dominican territory, including in touristic and maritime locations. The only exception is for the border region. To purchase property in the Dominican Republic, do not residency nor need a local partner. Property purchases can be carried out through a natural person or a local or offshore company. Once the purchase is complete, the alien citizen has the full and absolute ownership of the property, with all the same use and disposition rights as to which Dominican citizens are entitled.
Furthermore, according with Law 171-07 on incentives to retired people and foreign source renters, the real estate investors can obtain a resident permission in 45 days.
The real estate industry has been promoted significantly by several government measures to stimulate tourism and give significant tax incentives to the investors on Tourist Development Promotion. The goal is to develop the tourism industry in a reasonable and sustained manner, by offering investors several tax incentives. It is worth to highlight the tax exemption for 10 years of 100% on the taxes for income, capital gain, company incorporation and capital increase, real estate transfer and real estate property. Such law exonerates 100% of custom taxes or goods importation taxes, movables estates, equipment and those material needed for building and setting up the real estate facilities purchased.
3. Attractive tax incentives
Over the past 2 decades, the Dominican Republic has opened its borders to international business as part of its strategy for economic growth. For example, tax incentives exist where the Dominican State recognises that a foreign investment and technology transfer contributes to domestic economic growth and social development. This has been reflected in the current legal framework as well as in the international agreements that have recently been signed. Some of these tax incentives include: Law No. 16-95: On Foreign Investment, where the Dominican State recognises that foreign investment and technology transfer contribute to the economic growth and social development of the country; Law No. 84-99: On Reactivation and Promotion of Exports whose interest of the State is to establish new mechanisms and modernise existing ones in order to promote a reactivation and sustained expansion of exports of goods and services; Law No. 8-90: Promotion of the Free Trade Zones of Exportation. This law exonerates all the taxes of exportation, import, re-export, of all the goods and services necessary to perform different types of activities. Law No. 56-07: Declares the sectors belonging to the textile, clothing and accessory chain as a national priority; skins, manufacture of footwear and leather and creates a national regulatory regime for these industries which includes the exempt from payment of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) and other taxes; Law No. 480-08: On International Financial Zones. The purpose of this Law is to create the legal framework for the establishment of International Financial Zones in certain geographical areas. In 2010, the DR Government promulgated the Law for the promotion of cinematographic activity (Law 108-10), which provides various tax incentives for the development of this economic activity.
In short, the Dominican Republic offers numerous opportunities for foreign investors and international businesses looking for new opportunities. We believe the domestic business environment in dynamic and ever evolving for the better. For a more in-depth discussion about investment opportunities and doing business in the Dominican Republic, contact one of our local offices. Our professionals are trained to offer a wide range of integrated Audit, Tax, Advisory and Business services to both local and international clients, focused on the variety of industries operating in the Dominican Republic and Haiti.