International Institute of Business & Tax Excellence Newsletter (IIBTE.com)
Edition 7: Critical Thinking - August 2020
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Welcome to the seventh edition of the IIBTE newsletter, welcome to The Critical Thinking Edition!
The International Institute of Business & Tax Excellence is poised to harness globalization, one business at a time.
In this edition:
The Role of Artificial Intelligence in HR
by Nazneen Adam of Coral International Asset Managers (Pty) Ltd
www.coralassetmanagers.comRent Concessions – Amendment to IFRS 16
by Azhar Mia of Kreston KZN
www.krestonsa.com/kzn/Article 1:
The Role of Artificial Intelligence in HR
The Human Resources function has historically been perceived as being exclusively related to humans, and why shouldn’t it be – the name essentially gives us this idea. It may then come as a surprise that AI (Artificial Intelligence) has an integral role to play in the success of organisations as they work towards merging people, process and technology.
HR Professionals can find that repetitive, administrative tasks are time-consuming whilst leaving them with little capacity to focus on strategic planning and tasks that require more focus which would enable them to confidently make organisational decisions.
The below are some areas where AI can have a significant positive effect:
Recruitment
This is an area of HR that is greatly impacted by the use of AI. Human resource professionals spend much of their time on the talent acquisition process that for the most part is purely administrative and could be greatly reduced by the introduction of AI systems.
AI can be used to analyze candidates’ work history and skills and find suitable job opportunities for them. This alert to a candidate, in the form of an electronic notification will invite the individual to apply – which if done, would translate to a suitably qualified individual on a shortlist.
Unlike current, now seemingly archaic systems of reviewing CV’s and filtering through them for suitability, AI chatbots can communicate with prospective employees and complete this step for us. They can whittle down the CV’s to only the ones who meet the job requirements and can even setup the interview.
It can also eliminate the repetitive nature of completing personal information during the recruitment process by importing this from their CV’s to an online system that can be stored for future applications.
Onboarding
A successful onboarding process is key in retaining an employee and therefore any way that this can be improved is essential to consider.
Once an employee is hired, an AI system will essentially onboard the new employee by providing them with their job description, the names of their team members, tasks for completion, the reporting structure as well as company specific information without the necessity of human intervention. Although the human element is vital to building relationships, the speed with which this information can be relayed via laptops using AI, and the ability to refer to this without having to look at physical documentation makes this the ideal route to introduce the employee to the company.
Customised employee experience
In addition to having a successful onboarding system in place, AI chatbots can also facilitate an easier way for employees to communicate.
Chatbots can authenticate employees and provide them with their personal information if required. – this would include items such as their address, approval status of leave requests, emergency contacts, payslip information etc.
These chatbots can also assist on an ongoing basis in relation to FAQ’s related to employment or benefits which are tasks that are repetitive and whilst this consumes HR’s time, it does not add value to the process. AI helps to automate this to save time and allow HR to focus on other areas of strategic management.
Learning and Training
AI technologies can assist in upskilling employees and ensuring that they are constantly aware and skilled in any new technologies within their respective areas.
AI has the ability to recommend learning programs to employees using the requirements of their jobs as a starting point. It can also inform HR of specific training it recommends as a result of an analysis of employee’s activities.
E-learning is also an accessible way for employees to learn new things but also improve on their currently capabilities but in a manner that they feel comfortable with and at a speed they are in control of.
An effective career path for an employee can be created using AI systems using the information at its disposal. Employees feel guided to achieve career goals and the idea is that their attainment contributes to a sense of pride and accomplishment, which ultimately contributes to an effective and productive team.
AI technology has a very important role to play in the success of organisation - there certainly is a business case for it in the era we find ourselves in. The opportunities created to increase the productivity of employees cannot be ignored and may soon be a differentiating factor of success.
References:
Durrani, K (2020) The Impact of AI in Human Resource Decision-Making Processes. Available at: https://www.hrtechnologist.com/articles/ai-in-hr/the-impact-of-ai-in-human-resource-decisionmaking-processes/#:~:text=AI%2Dbased%20software%20can%20automate,%2C%20manage%20payrolls%2C%20and%20more.&text=Additionally%2C%20it%20can%20also%20allocate,time%20to%20more%20valuable%20tasks.
Ernst and Young LLP (2018) The new age: artificial intelligence for human resource opportunities and functions. Available at: https://www.ey.com/Publication/vwLUAssets/EY-the-new-age-artificial-intelligence-for-human-resource-opportunities-and-functions/$FILE/EY-the-new-age-artificial-intelligence-for-human-resource-opportunities-and-functions.pdf
Nicastro, D (2020) 7 Ways Artificial Intelligence Is Reinventing Human Resources. Available at: https://www.cmswire.com/digitalworkplace/7-ways-artificialintelligence-is-reinventing-human-resources/
Article 2:
Rent Concessions – Amendment to IFRS 16
The COVID-19 pandemic has led to a global economic crunch. This has forced all sectors, including individuals, to seek assistance in any way, shape or form and one instance of this assistance sought is rental concessions.
During May 2020, the International Accounting Standards Board (IASB) issued an amendment to IFRS 16 Leases to account for these rent concessions such as rent holidays, temporary rent reductions and rent deferrals.
Previously, such concession would result in a lease modification, which may be complex. This amendment however exempts lessees from having to consider individual lease contracts to determine whether rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications and allows lessees to account for such rent concessions as if they were not lease modifications.
This optional exemption gives relief to lessees and allows them to continue providing information about their leases that is useful to investors.
A lessee that applies the optional exemption is not required to assess whether such rent concessions are lease modifications, and accounts for them in accordance with other applicable guidance. Therefore, the accounting treatment will depend on the nature of the rent concession. An example would be that if the concession is in the form of a once-off rent reduction, it should be accounted for as a variable lease payment and be recognised in profit or loss.
The optional exemption will only apply if the following are present:
the revised consideration is substantially the same or less than the original consideration;
the reduction in lease payments relates to payments due on or before 30 June 2021; and no other substantive changes have been made to the terms of the lease.
Should an entity elect to apply the exemption, it would be required to disclose the following:
that fact, if they have applied the exemption to all eligible rent concessions and, if not, the nature of the contracts to which they have applied the exemption; and
the amount recognised in profit or loss for the reporting period arising from application of the exemption.
For lessors, no exemption is available and are therefore required to continue to assess if the rent concessions are lease modifications and account for them as such.
References:
Ifrs.org. 2020. IFRS. [online] Available at: <https://www.ifrs.org> [Accessed 24 August 2020].
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