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Should you employ good looking people?

Should you employ good-looking people or not so good-looking people?

Whilst the obvious answer would appear to be that it doesn’t matter what a person looks like as long as they can do their job properly, researchers in Japan have found out that the attractiveness of an employee can have an impact on the sales of a business.

Interestingly though, it’s probably not the correlation most people would think applies.

Researchers at the Chinese University of Hong Kong studied retail sales in shops and found that the more attractive the shop assistants of the opposite sex were, the lower the sales were. The researchers found that male shoppers were less likely to go into the shop if the more attractive woman in the research study was serving.

Even if they entered the shop with the attractive shop assistant in it, only 40% of them bought something. This compared to 56% who purchased something when a less attractive assistant was serving.

Lisa Wan of the University said “attractive service providers can lead consumers to become self-conscious or embarrassed. This is especially true when the provider is of the opposite sex. Even when the attractive salesperson is the same sex, consumers may feel a sense of inadequacy through self-comparison.

In either case, the shopper may avoid interacting with physically attractive providers, rendering the salespeople ineffective”.

It’s worth mentioning though that the scientists undertaking the research were monitoring a shop selling figures from Japanese comics and the male shoppers were obsessed with computers.

“Male shoppers obsessed with computers” – surely they would only notice the female shop assistant if she was holding a computer?

Would a good liar make a good accountant?

Do you have children? Have they ever told you a lie? Even a small teeny weeny lie?

Well, if they have then although you may not be particularly pleased with them, it may actually mean that they have good memories and excellent thinking skills.

Psychologists at the University of Sheffield tested 135 children and found that those children that lied performed much better than the honest children in the group.

The children in the study were aged between 6 and 7 years old and during the study they were given a trivia game. The answers to the trivia game were on the back of the card which they had been given. Initially, each child was in a room accompanied by one of the researchers but the researcher then left the child alone with the card with the answer on the back.

Before leaving the room the researcher told the children not to look at the answer but what the children didn’t know was that when they were alone in the room there were hidden cameras which were monitoring whether they would look at the answers on the back.

25% of the group subsequently cheated and looked at the answers on the back of their cards but claimed that they hadn’t cheated when the researcher returned to the room.

At a later stage, all of the children had to perform a separate memory test and the research found that the children who had lied performed significantly better than those children who didn’t lie.

Dr Tracy Alloway, project lead from the University of North Florida was also involved in the research and said that “this research shows that thought processes, specifically verbal working memory, are important to complex social interactions like lying because the children needed to juggle multiple pieces of information while keeping the researcher’s perspective in mind”.

This has got me thinking as a lot of the readers of this blog are accountants or studying to be accountants.

“Thought processes”, “verbal working memory”, “juggling multiple pieces of information” and “keeping other people’s perspective in mind” are all skills which many accountants need.

Does this mean that you would make a good accountant if you were a good liar when you were a child?

Whatever your answer is, I’m not sure I would believe you…

Nicely said Mr Musk

We’ve all been there haven’t we? Long boring meetings that don’t seem to be going anywhere.

Maybe you’ve tried to give the impression of being interested in what was being said but in reality the meeting wasn’t relevant for you and your mind was wandering to other more interesting things.

Well, if you’re not a great lover of excessive meetings then you are not alone. In fact, you share the thoughts of an incredibly successful and admired business person. Namely, Elon Musk.

Mr Musk’s current business interests include Tesla and SpaceX.

In the past he founded x.com which later became PayPal. Paypal was subsequently bought by eBay for $1.5 billion.

He currently has a net worth in excess of $20 billion.

But what does he think about meetings?

In an email to his staff that was leaked to the electrek website there were a few productivity recommendations:

In the words of Mr Musk, these include:

– Excessive meetings are the blight of big companies and almost always get worse over time. Please get of all large meetings, unless you’re certain they are providing value to the whole audience, in which case keep them very short.

– Also get rid of frequent meetings, unless you are dealing with an extremely urgent matter. Meeting frequency should drop rapidly once the urgent matter is resolved.

– Walk out of a meeting or drop off a call as soon as it is obvious you aren’t adding value. It is not rude to leave, it is rude to make someone stay and waste their time.

– Don’t use acronyms or nonsense words for objects, software or processes at Tesla. In general, anything that requires an explanation inhibits communication. We don’t want people to have to memorize a glossary just to function at Tesla.

– Communication should travel via the shortest path necessary to get the job done, not through the “chain of command”. Any manager who attempts to enforce chain of command communication will soon find themselves working elsewhere.

– A major source of issues is poor communication between depts. The way to solve this is allow free flow of information between all levels. If, in order to get something done between depts, an individual contributor has to talk to their manager, who talks to a director, who talks to a VP, who talks to another VP, who talks to a director, who talks to a manager, who talks to someone doing the actual work, then super dumb things will happen. It must be ok for people to talk directly and just make the right thing happen.

– In general, always pick common sense as your guide. If following a “company rule” is obviously ridiculous in a particular situation, such that it would make for a great Dilbert cartoon, then the rule should change.

Nicely said Mr Musk.

How much do Big 4 partners get paid?

KPMG UK released their results last month for their most recent accounting period and they showed a fall of 10% in pay for the KPMG partners when compared to the previous year.

Although the firm’s revenue rose by 5% to £2.2 billion, it’s profit fell to £301 million.

The firm wrote off a number of technology investments.

KPMG, like the rest of the Big 4, have invested heavily in technology companies in an attempt to stay at the forefront of technology.

Unfortunately for KPMG, not all of their investments were successful. Bill Michael, the Chairman of KPMG, highlighted one investment that hadn’t done so well – KPMG had committed £3 million to Flexeye, a tech company that analyses large amounts of data and it hadn’t proved to be the wisest investment.

Whilst profits fell, it hasn’t all been bad news for KPMG as their audit practice grew by 10%.

Back to the average pay of the KPMG partners though and although their average pay fell by 10% I’m sure that the partners will still be able to afford to buy a sandwich for lunch.

The average pay for the KPMG partners was £519,000 each.

That’s not too bad is it?

But how does it compare with the average pay from the partners of the remaining Big 4.

The most recent reported results show the following average pay per partner:

Deloitte – £865,000

EY – £677,000

pwc – £652,000

It looks like Deloitte partners will be having the more expensive sandwiches for lunch.

KPMG fires unethical partners

Picture the scene – you’re the senior auditing partner of KPMG in America with more than 30 years of experience serving some of KPMG’s most prestigious clients. There are over 9,000 KPMG people in the US who look up to you as the boss.

You receive some leaked information about which of your audits the US audit watchdog is going to examine as part of their annual inspection of how well KPMG perform audits.

Do you:

(a) Disclose this unethical breach immediately, or

(b) Try to keep things quiet and make sure that the audit files of the audits selected are perfect?

Unfortunately for Scott Marcello, the (now ex) head of KPMG’s audit practice in America, he didn’t choose option (a).

The background to the issue is that every year the US audit regulator, the Public Company Accounting Oversight Board (PCAOB) selects a sample of audits to inspect and ensure they have been performed properly.

A former employee of the PCAOB had joined KPMG. A friend of his who was still working at the PCAOB tipped him off about which audits would be selected for inspection this year.

The confidential information was then passed up the KPMG hierarchy until it reached Mr Marcello.

We can only guess what Mr Marcello and 4 other KPMG partners were planning on doing with the leaked information but one thing was for sure and that was they didn’t disclose the leak.

Whilst the 5 partners clearly weren’t very ethical, KPMG as an organisation acted quickly once they found out about it.

The 5 partners were fired and Lynne Doughtie, the chairwoman and chief executive of KPMG was quoted as saying “KPMG has zero tolerance for such unethical behaviour. Quality and integrity are the cornerstone of all we do and that includes operating with the utmost respect and regard for the regulatory process. We are taking additional steps to ensure that such a situation should not happen again”.

The PCOAB publish the results of their inspections and the previous results of the KPMG inspections perhaps give a reason for why Mr Marcello was keen for any help, whether it was ethical or unethical.

In 2014 and 2015, KPMG had more deficiencies in their audits than any of the other Big 4 in America.

38% of their inspected audits in 2015 were found to be deficient whilst in 2014, 54% were found to be deficient.

How do you feel?

It’s an unfortunate fact of life that people get sick. In the winter months especially, there can be a lot of cold and flu bugs going around.

But what percentage of working hours do you think are lost to sickness?

The ONS (Office of National statistics) in the UK has just released details of the number of sick days in 2016. The number of hours lost to sickness as a percentage of working hours was 1.9% or to put it another way, about 137 million working days were lost due to illness in the UK last year.

This may sound a lot but of the number of sick days taken has fallen over the last few years. Last year the average number of sick days per worker was 4.3 whereas when records began in 1993 it was 7.2 days per worker.

It looks like the fall in sick days could be down to a number of factors.

The economic downturn in the late 2000’s arguably caused people to “struggle on” through an illness rather than risk losing their job. Companies are also more flexible nowadays when it comes to letting people work from home. If someone isn’t feeling 100%, a lot of employers will let them work from home and even if they are not up to full speed at least they will be doing some work.

The details also show that there’s a difference between the public sector and the private sector. The percentage absenteeism in the public sector is 2.9% compared to 1.7% in the private sector.

The most common reasons for missing work last year included minor illnesses such as colds (25%), musculoskeletal problems such as back ache (22%), mental health problems including stress and depression (11.5%), stomach upsets (6.6%) and headaches and migraines (3.4%).

Your new (waggy tailed) baby

It’s a busy time for new parents when a baby comes along. Lots of employers give maternity and paternity leave for the new mums and dads but what about when your “baby” has 4 legs and a waggy tail?

Artisan Brewers BrewDog are a Scottish beer company who are very successful and sell their craft beers around the world.

They are also pretty unusual. They have grown from having two staff and two investors in 2007 to a current global team of in excess of 500. It has broken crowdfunding records with more than 32,000 shareholders.

More recently though, they became the first major company to offer their employees a week off if they get a new puppy. This will enable the humans to bond with their new pets without worrying that their work will suffer.

Founders James Watt and Martin Dickie, who themselves founded the company with their dog Bracken, said in a company statement that ‘Yes, having dogs in our offices makes everyone else more chilled and relaxed – but we know only too well that having a new arrival – whether a mewling pup or unsettled rescue dog – can be stressful for human and hound both.

‘So we are becoming the first in our industry to give our staff help to settle a new furry family member into their home,’

If any employees are thinking of getting a new puppy, then they won’t be the first in the company with a dog.

As well as providing time off for new dog owners, BrewDog also allow their employees to take their pet dogs into the office and there are currently over 50 employees at their head office alone who take their dogs to the office every day.

It’s maturing nicely…

“Don’t worry, it’s secured with cheese” isn’t the most common phrase you hear when discussing the bond markets but a €6 million bond issue may well change that.

When a company issues a bond, the investor is lending money to that company in exchange for the bond. When the bond matures the company will repay the money that was lent (together with interest).

If you put yourself in the shoes of the investor, then what type of company would you invest in?

The chances are that you would be looking for large, well established and financially secure companies to invest in. That means that smaller companies generally find it challenging to raise funds via bonds.

An Italian cheese manufacturer has found a novel way around this problem.

4 Madonne Caseificio dell’Emilia is a relatively small Modena based cooperative firm which produces 75,000 wheels of Parmigiano cheese annually (nearly 2% of the world production of the famous cheese). It has issued a €6 million bond offering an annual yield of 5% with the capital being repaid in 5 annual amounts starting in 2018 and ending in 2022. The funds raised will be used to support their commercial expansion plans.

The interesting thing about the bond issue though is that it is secured by Parmigiano cheese worth 120% of the bond value. This means that if the company fails to repay the money the investors can get Parmigiano cheese from the company.

€7.2 million worth of cheese – that’s a lot of cheese! Let’s hope the bond matures nicely without any problems.

A good excuse to buy another handbag?

How much do the Louis Vuitton handbags cost?

A lot is the simple answer but some recent research by Deloitte’s has shown that the price of luxury items varies significantly around the world and foreign exchange movements play a big part in that valuation.

According to Deloitte, in US dollar terms London is now the “cheapest” city to buy designer and luxury goods.

Since the Brexit vote in June, at the time of writing the pound has fallen by more than 17% against the dollar (i.e. you need 17% more pounds now to buy the same amount of dollars you would have received back in June).

According to the research, on 7 October a Speedy 30 handbag from Louis Vuitton costs £645 ($802) in London, €760 ($850) in Paris and $970 in New York. China was the most expensive place to buy it with the handbag costing 7,450 Yuan ($1,115).

Nick Pope, fashion and luxury lead at Deloitte, told the BBC that “the trend in luxury pricing in the UK is being driven mainly by the depression on the sterling – thus making the same item more affordable in the UK than in any other luxury market”.

Of course, if your income is in British pounds then the cost to buy the handbag in London remains the same. If however your income is in another currency such as US dollars then it is $313 cheaper to buy in London than in China for example. If you are stocking up on your luxury handbags should you be planning a trip to the UK?

It’s not just the ladies from outside the UK who are buying luxury handbags who could be benefiting from the exchange rate movement.

Any male readers may be interested to know that a Brunello Cucinelli cashmere V-neck sweater now “only” costs £650 ($843) in the UK compared with $942 in France and $995 in the US.

$843 for a sweater?

Please form an orderly queue as you rush to the shops to buy one. Or maybe two…

Standing up for productivity.

How would you feel if your chair was taken away from you at work? Probably not too happy I would guess.

A recent bit of research though may make your boss think otherwise.

Scientists from the Texas A&M Health Science Centre School of Public Health installed “standing desks” in a call centre employing over 150 people. The standing desks could be adjusted so that the employee could work at them either sitting down or standing up.

Half of the employees were given sit–stand desks to use whilst the other half were given traditional sitting desks. The performance of the employees was recorded over a period of 6 months and the results were surprising.

Despite the employees who had the sit–stand desks only using the desks in the standing position for a third of the time, their productivity increased by 50%. Productivity was measured by the number of successful calls that the employee made to the clients with “successful” being defined as being when the company earned revenue from that call.

Each employee typically made in the region of 400 to 500 calls every month and the company wanted them to achieve on average 2 successful calls per hour. Those with the sit–stand desks achieved the target whilst those with the traditional seated desks averaged 1.5 successful calls per hour.

Dr Gregory Garrett from the centre was quoted as saying that “having the ability to move throughout the day really makes a big difference”.

So, is it time to introduce standing chairs in your office?