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In an era where businesses increasingly lean towards innovative strategies to optimize their workforce, cognitive and personality testing has emerged as a pivotal tool in modern hiring practices. These methods, once peripheral to traditional hiring processes, have now taken centre stage as employers seek to gain deeper insights into the potential of their candidates beyond what is evident from resumes and interviews. This shift towards a more analytical approach to hiring reflects a broader trend in the workplace: a desire to understand the intricate workings of the human mind and its impact on job performance and company culture.

Understanding Cognitive Assessments

Cognitive assessments are designed to measure the "basic building blocks of the way we think and act," promising employers a more objective method of evaluating a candidate's potential. These tests assess abilities such as memory, reasoning, attention, and problem-solving skills. Proponents argue that by focusing on cognitive capabilities, companies can increase the quality of their hires and reduce bias, making the hiring process more equitable.

However, this reliance on cognitive testing is not without its critics. Studies have highlighted concerns over racial disparities and the potential for these assessments to inadvertently screen out neurodiverse individuals. Furthermore, the depth and implications of data collected through such assessments are raising eyebrows, particularly regarding privacy and the ethical use of personal information.

The Rise of Personality Testing

Personality testing offers another dimension to the hiring process, allowing employers to gauge aspects such as temperament, work style, and how a candidate might fit into the team dynamics. Tools like the MMPI-3 and the 16 Personality Factor Questionnaire provide insights into an individual's character traits, which can be crucial for roles requiring specific interpersonal skills or emotional intelligence.

Yet, the effectiveness and fairness of personality testing are subjects of debate. Critics point out the potential for these tests to discriminate, consciously or unconsciously, against candidates based on factors unrelated to job performance. The challenge lies in ensuring that these tools are used responsibly in a manner that respects candidates' privacy and mental well-being.

Integrating Technology in Assessment

The integration of technology into cognitive and personality assessments has introduced new opportunities and challenges. Wearable devices and AI-based tools offer unprecedented access to real-time data on employees' cognitive states and stress levels, like the SmartCap for monitoring fatigue and Neurable’s Enten headphones designed to enhance focus. Raphael Avraham Sternberg, an advocate for ethical technology use, underscores the importance of balancing innovation with respect for individual rights and privacy.

While technology can streamline the hiring process and provide valuable insights, it also raises significant concerns about data privacy, consent, and the potential for misuse of personal information. The allure of technology should not overshadow the need for transparency, fairness, and respect for candidates' mental privacy.

Addressing Legal and Ethical Considerations

The legal and ethical implications of using cognitive and personality assessments in hiring are significant. The U.S. Equal Employment Opportunity Commission's draft enforcement guidelines on technology-related employment discrimination are a step towards addressing these concerns. Employers must navigate the fine line between leveraging technology for better hiring decisions and ensuring they do not infringe upon candidates' rights or contribute to discriminatory practices.

Regular auditing of assessment tools for bias and validity, informed consent, and clear communication about how data is used are essential measures to uphold ethical standards. Moreover, the development of specific rules governing the use of these assessments is crucial to protect individuals from potential overreach.

Looking Ahead: The Future of Hiring Practices

As we move forward, the role of cognitive and personality testing in hiring practices will likely continue to evolve. The potential benefits of these tools are significant, offering ways to enhance workforce quality and diversity. However, their use must be balanced with a commitment to ethical standards, fairness, and respect for individual rights.

The conversation around these testing methods is far from over. As technology advances, so too will the need for ongoing dialogue, regulation, and adaptation to ensure that hiring practices remain just, effective, and respectful of the complexities of the human mind.

The Bottom Line: Cognitive Tests are a Double-Edged Sword

Cognitive and personality testing represents a double-edged sword in modern hiring practices. While offering the promise of more objective and efficient hiring decisions, these methods also pose significant ethical, legal, and social challenges. It is the responsibility of employers, regulators, and society at large to navigate these challenges thoughtfully, ensuring that the pursuit of innovation does not come at the expense of fundamental human rights and dignity.

Business is an ever-changing landscape. In 2020, businesses had to rethink their working practices and adapt to remote working methods. As we move into the post-pandemic era, many business owners are rethinking their business goals, strategies and employees. Inclusion and diversity should be at the heart of every business’s values and recruitment processes.

In more recent times, we have seen the value in employing those living with a disability – for example, being able to use British Sign Language. In the UK, over 7.7 million people are living with a disability or health condition. Consider curating a workplace that reflects your diverse customer base and local community if you are currently hiring.

Here is how you can make your workplace more friendly for employing those with disabilities.

Train your employees

Communication is the key to fostering a positive and equal workplace. Consider educating your current employees about disability and how it can impact an individual’s experience in the workplace. When hiring individuals with disabilities, it’s important to encourage open communication within the office.

Make your office a safe place for employees to share their concerns and difficulties at work. It may be a case of switching up job roles or educating your team about disability. You could also invest in equipment, like wheelchair accessible vehicles, to make your office as inclusive as possible.

Get your name out there

Consider partnering with a charity or brand who work with, or sponsor, disabled individuals. These businesses can help open more opportunities for you to hire those with a disability. These organisations can also help you advertise your job advert in the right places and advise you on how to encourage equal opportunities within your business. Research how you can make your company a fair and ethical one.

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Promote being an equal opportunities business

People want to know what kind of company they are applying to work for. If you have taken steps to be an equal rights company, make sure you showcase that to prospective employees. You need to offer inclusive recruitment practices that work for you, your employees and the company.

Advertise your job advert in the right places

Post your job advert on disability-friendly sites and social media groups that may help you find potential candidates. Make sure the text is large enough to read, and do not exclude anyone in the job ad. For example, avoid making a statement like ‘must have a driving license’ unless it’s essential for the role.

If you find an applicant you want to interview, make sure to ask if they need any adjustments made to the interview process. You should evaluate whether your office premises are fully accessible and what changes you can make to make your space fully inclusive. For example, changing the room layout or lighting to fit the applicant’s requirements.

With the market for both new cars and used cars ever growing, we are spoilt for choice. Many people, however, have their eyes set on a particular model. Going after your dream car can be an expensive endeavour, but the feeling of driving off the forecourt in your dream car is like no other. Join us to find out how you can afford the car of your dreams without breaking the bank.

Option 1: Credit card

Before going down this route, make sure you speak to your car dealer first as some dealerships do not accept credit card payments.

A benefit of credit card purchases is that your credit card company can give you added protection on the full purchase cost (often as long as the value of the vehicle is over £100 and less than £30,000). Of course, you have to be able to meet your monthly payments too.

If you buy a car in this way, you’ll be allowed to put down an even lower deposit than 10% and pay the remaining money off using a debit card. It’s best to consider all options here, as often the interest that you pay on a credit card could be significantly higher than that of a finance agreement.

Option 2: Hire purchase agreement

This method involves monthly payments with the option to purchase the car at the end of your agreement based on its new value.

The standard deposit to pay when purchasing in this way is 10%, but it is always an option to pay more and have less to pay off later. The rest of the car is then payed off in instalments over a period of one to five years. The longer this period, the less you have to pay each month but due to interest charges, the total cost of the car becomes higher.

Option 3: Personal Contract Purchase agreement

This option is quite similar to opting for a hire purchase agreement. In this scenario, the end value of the car is agreed at the start of the contract, so you can plan your payments accordingly. Payments are often less than what you’d pay in a hire purchase agreement as you pay the full price of the car, plus interest but minus the guaranteed future value of the car. You must pass credit checks before you’re eligible for a PCP agreement.

If you can afford it, it’s a good idea to put down a larger deposit, therefore lessening the amount you have to pay back monthly. Saving a lump sum for a large deposit is easier than saving up for a car, while reduced monthly payments can really help out too. Always evaluate your current monthly payments before you agree to a finance agreement, as being behind on your payments can lead to financial issues.

At the conclusion of your PCP agreement you have two options. You can either pay off the future value of the car to become the full owner, hand back the keys or trade the car in as a deposit for a new finance agreement.

One thing you must be aware of with this agreement is the danger of exceeding the forecasted mileage. If you exceed the mileage on the car, there will be further charges to pay. This is because more miles decrease the value of the car. Also, any damage to the car will be charged to you, so you must be prepared to take good care of the vehicle.

Considering all the options, your dream car isn’t as far out of your grasp as you might have thought. As we can see, there are a range of finance options available to you for purchasing new cars — allowing you to drive that dream car you’ve always wanted without forking out loads of cash. Save up what you can for a significant deposit and always make sure that you can cover the payments before signing any agreements.

Their success is down to many things – luck, vision, hard work, but too often ignored - because of good hires. Thanks to effective recruitment, they have been able to bring their vision to life, bringing transparency, access and customer experience to the banking industry. The results speak for themselves – they have a million customers using their debit cards.

The quality of their employees has been a huge contributing factor in their success. Monzo have put customer satisfaction at the heart of their company and made it their mission to shine a light on the ineptitude of legacy banks. Hind Ali, Operation Support Analyst at Monzo, believes that customer experience is fundamental to the business. She explains that the business has built their reputation on providing a level of real-time customer service and insight that the established banks don’t offer. “Undermining this would have far-reaching implications”, she says. “We have to continue to deliver the most transparent and usable app, and to do that we need the best Customer Operations team. We don’t just need bodies; we need personable people with the right problem-solving skills to provide the customer service we expect.”

One of the byproducts of achievement is demand, and in the Autumn of 2018, Monzo felt the full force of their success. They found themselves in need of 60 new full-time employees and set the ambitious target of having them all hired by Christmas – a huge task for a company so young. Hind tells us that the start-up was running at full capacity, holding two to three assessments each week which they were sometimes struggling to fill. “So, we needed to find other ways of sourcing great candidates”, she adds.

Start-ups such as Monzo are in existence to disrupt the industries, and their recruitment process should be no different.

Start-ups such as Monzo are in existence to disrupt the industries, and their recruitment process should be no different. Technology is central to their evolution, and video-based hiring was the answer to their concerns.
It provided an opportunity to improve the quality of candidates, whilst simultaneously simplifying the process. This not only saved time and therefore money, but also had the added benefit of meaning people could be onboarded in the recruitment team with minimal training.
Hind explains that “what’s great about Tempo is that they give us control of the process. We could choose to put less emphasis on previous experience and instead focus on the candidate’s soft skills. We really needed to assess skills like empathy from the start. There’s usually no emotion or personality in a CV. It can be very difficult to get an idea of someone’s soft skills by looking at a list of jobs they’ve done. With Tempo, we see a 30-second video introduction from the candidate, and we could ask applicants questions in real-time. This meant we could see how they reacted to challenging situations, before inviting them to an assessment day.”

Through optimising their recruitment process through technology, Monzo managed to hire 200 people, as opposed to the initial (albeit ambitious) target of 60. Efficiency and peace of mind are what Monzo now associate the recruitment process with, phrases that typically don’t spring to mind when organisations are hiring.

“Tempo has been an incredibly useful tool for our recruitment process. Rather than hiring the 60 people we set out to, we’ve been able to hire 200! They were the best choice for getting in quality candidates, quickly. The main differences have been in two areas – efficiency and peace of mind. Some of our assessment days had a 50% success rate. As anyone in the recruitment industry will confirm, that’s a fantastic return.”

“We’re now able to immediately see which candidates are engaging and would fit our culture before we invite them to assessment days. As a result, we’ve been able to host larger and more successful assessment days. That’s saved our team of four a huge amount of time and effort, which we can spend on hiring for technical roles or improving onboarding and internal processes”, added Ali.

However, if you fail to spot the right candidates, your firm runs the risk of needlessly overspending and wasting resources across the searching and recruitment process.

To find top talent, Molly Evans, an administrator for StellarSelect.co.uk, suggests switching to these creative strategies:

1.       Interview first before relying on an algorithm

Companies make use of computers in candidate selection to remove bias from the equation. However, algorithms are not yet that sophisticated to gauge important human traits like influencing skills. Such limitations are probably why big companies like Amazon have temporarily suspended their online recruitment platform.  So consider interviewing some of the applicants before letting the algorithm eliminate them.

2.       Don’t limit the interview with questions

After selecting a group of potential candidates, your next step is probably to ask standard sets of questions. However, don’t stop there. Aside from asking them about their work experiences, you can ask them to demonstrate their skills.

For example, you can set a scenario where they have to advise clients about their mortgage needs. See what strategies and ideas they come up with on how to meet the client’s needs. Such an assessment can tell you right away if they will be a valuable asset for your company.

3.       Consider the talents working for you in the long term

Hiring the best talents is hard, but retaining them is harder. Many top performers are aware of their skills and abilities. Keep in mind that high salaries are not enough to keep them. Instead, you can give them:

Also draw attention to their current role’s importance and status, as well as possible promotions or greater responsibilities for staying with your company.

4.       Pick people who are willing to learn

Changes in an organisation’s structure are inevitable. You’ll need people who are agile, excellent communicators, and willing to collaborate. You’ll also need people with a creative mindset who can innovate and adapt. You’ll need candidates that are:

You can learn these qualities by making your interview questions detailed and specific. For example, you can ask them how they would handle a lost account.

5.       Hire people from your community if possible

One of the best places to start looking for potential employees is within your community or industry. You can do this by reaching out through:

 

6.       Get thinkers not taskmasters

Successful candidates know how to delegate tasks. However, if you want your company to grow, you’ll need thinkers. They are the people who are always asking ‘why?’, pushing for quality and efficiency. If implemented correctly, they can change the company’s culture for the better. Consider encouraging and supporting these kinds of talents. You may have to adjust or change the old ways but this is a small price to pay for raising your company’s competitiveness.

7.       Get referrals

There are advantages to getting referrals both from within and outside your company. Your staff will usually refer you to top performing people rather than underperforming ones. Consider providing incentives to your current employees for their referrals. Outside the company, you can look for job candidates from financial recruiters like StellarSelect.co.uk.

8.       Develop talents for the job

Finding and hiring the best people isn’t cheap and could take time. So why not try to develop those talents within your company? Consider investing in your employees through training, coaching, seminars, and workshops. Also, don’t forget to give them continuous feedback to sharpen their abilities. By recruiting the best talents from within, you could boost loyalty and productivity in your company.

9.       Use trial periods

If it’s possible, you can ask potential employees to undergo trial periods first. Once they’ve passed, you can then choose to offer them full-time work. Trial periods are like internships except that the pay is better with more serious work responsibilities. You can run it for several weeks or months – just enough time to assess their performance.

For example, you can get the candidate to start by assisting or handling minor client accounts. During that time, you will be able to gauge their attitude and skills for the job. It’s also important to pay the candidates fairly to avoid any legal and moral complications.

Conclusion

CVs and algorithms are useful for providing a list of skills. However, to build a great team of talent, you need to ask more than routine questions. Use the interview to learn how they work based on their skills and capabilities. By doing so, you’ll know that you’ve found the right people. Remember also to cast your recruitment net wide to increase your opportunities for finding the best-skilled people. This means maintaining links with your industry and community and using incentivised candidate referrals. Follow all these strategies and you’ll be in the best position to encourage top talent to beat a path to your door.

HR leaders in UK financial services firms are finding themselves caught between a rock and a hard place. Here, Steve Girdler, Managing Director EMEA at HireRight, looks at the future of FS firms in the UK and discusses the issue of skill shortage and migration of business.

On the one hand, the financial services (FS) sector is heavily reliant on the skills, diverse experience and local knowledge of the European workers who help make London a thriving international financial centre – a talent pool that’s at serious risk of drying up post-Brexit.

On the other hand, London’s historic advantages, which extend beyond its access to talent – factors like specialised infrastructure and even its geographical position between mainland Europe and the US – make it very hard for firms to conceive of a finance hub anywhere else in the continent that could rival the City, at least in the short term.

It is now a delicate balancing act, as firms look at hedging their bets to safeguard themselves against the potential risks of leaving the EU, while also keeping one foot firmly in the UK. With the challenge very much at the feet of HR departments, the approach taken over the months ahead will not only help to define what the future looks like but also determine how successfully and profitably their firms navigate through it.

Navigating the storm

Recent research from Deloitte shows that 47% of highly skilled UK workers – the lifeblood of the financial sector in London – are planning to quit the UK in the wake of Brexit. Inevitably, being highly skilled also means being highly sought after and these workers are not short of options if their future in the UK exceeds their appetite for risk and uncertainty.

But amid the storm clouds gathering over the City, there remain a few rays of sunshine. A recent study we conducted among over 2,500 HR leads around the world found that in the UK’s financial services sector, optimism remains. Almost two thirds (63%) of HR teams within UK FS firms expect their workforce to grow in the coming year. In contrast, only 4% are even discussing stopping recruitment in the UK in reaction to Brexit.

How not to gamble on the future

However, hiring in the UK will inevitably become more complicated as the government starts to dig into the specifics around which regulations to hold onto and which to scrap. This will be needed to keep us suitably in line with best practice on the continent, and identify what is likely to be tweaked to give the UK greater global appeal. These aren’t questions that it’s wise or even safe to try to assume answers to, because getting it wrong could prove costly.

Instead, a lot of companies are taking a middle approach, by trying to walk the line between cost efficiencies and covering all eventualities. A good example is the increase in UK FS giants opening up satellite units with head office potential in places like Frankfurt. In the current regulatory environment, it can take as long as two years to get an office fully functional in some European markets, so waiting to see what happens isn’t an option. If the UK becomes less hospitable, the escape route has been readied. If not, then the loss is limited to the short term maintenance of an additional office. Expensive, but not a disaster.

For HR teams the challenge is even more complicated. Reining in hiring of European workers may seem like the safe option to offset risk, but doing so en masse would bottom out the jobs market and speed up the exit of those talented foreign nationals. On the other hand, leaving themselves too reliant on the skills of non-UK workers comes with its own risks, especially if any form of “hard Brexit” becomes a reality.

No margin for error

One thing that’s immediately apparent is that any hires that are made need to be as risk free as possible, which means two things: trusting a candidate’s credentials – their ability to do the job honestly, fairly and diligently – and remaining compliant whatever the situation.

This calls for a high level of due diligence to be performed on all significant hires, or indeed anyone with access to sensitive information. Whichever way the regulation goes, backtracking from the recent Senior Managers Regime, where all senior staff must be thoroughly vetted, seems unlikely.

However, compliance with the FCA is only part of the picture. With budgets stretched by policies trying to offset risk, and growth restrained by uncertainty, a costly reputational scandal becomes an even greater concern, even if it’s not accompanied by a hefty fine.

A fork in the road

It’s going to be difficult for firms to know what the best course of action is with so much uncertainty ahead and no obvious stability on the radar. To come out the other side in the best shape, they need to forecast ahead to the regulatory landscape over the next few years.

But whether the UK develops its own unique position as a regulatory pioneer – as has been the case within the EU – or whether it aims to make itself more competitive by relaxing regulations, maintaining security precautions around the individuals at the top is one thing that’s almost guaranteed. Removing these measures would directly make banks more susceptible to malpractice, scandal and fraud, at a time when the UK is more worried than ever about its international reputation as a “strong and stable” finance hub.

Corporate hiring plans for 2017 point to robust employment opportunities for graduates of MBA and business master's programs, according to a new employer survey report from the Graduate Management Admission Council (GMAC). Globally, 86% of companies plan to hire recent MBA graduates this year, up from 79% that hired them in 2016. Demand for these MBA graduates is strongest in the United States and Asia-Pacific, where 9 in 10 companies plan to hire these candidates.

"Despite the political uncertainty about the status of immigration and work visas in the United States and other parts of the world, companies are keen to hire graduates from this year's MBA and business master's programs, including international candidates," said Sangeet Chowfla, GMAC president and CEO. "This signifies the value these programs create for students and the vital role their skillsets bring employers."

At the time GMAC conducted the Corporate Recruiters Survey in early 2017, respondents in Asia-Pacific, Europe, Latin America and the United States declared their companies are staying the course with plans to hire international graduate business candidates. Overall, 59% of the survey respondents plan to hire or are willing to hire MBA and business master's graduates requiring legal documentation - a gain of seven%age points from 2016.

Most US companies (55%) either plan to hire (28%) or are open to hiring (27%) an international candidate in 2017 - up from 49% that had such plans last year. The technology industry in the U.S. is the most likely to hire international business graduates this year. Half of U.S. tech firms (50%) plan to hire such candidates in 2017 - up from 27% that planned to hire them last year.

GMAC conducted the 16th annual Corporate Recruiters Survey in February and March 2017 together with survey partners EFMD and MBA Career Services & Employer Alliance (MBA CSEA), in association with 97 participating graduate business schools. Survey findings are based on responses from 959 employers representing more than 628 companies in 51 countries worldwide. Two additional organizations, CEMS and RelishMBA, assisted with recruitment of survey participants.

Additional Key Findings

As the outlook for MBA hiring continues to look bright, so do projected hiring trends for 2017 business master's graduates, especially those with Master in Management and Master of Accounting degrees.

The largest increase in hiring demand compared with 2016 is seen in the share of companies that plan to hire Master in Management graduates; globally, 59% plan to hire recent Master in Management graduates, up nine%age points from last year.
Notably, 70% of manufacturing companies plan to hire Master in Management graduates in 2017, up from 50% of companies that hired them in 2016.
Data analytics expertise continues to be in high demand. Sixty-nine% of employers plan to place recent graduate business school hires into data analytics roles in 2017, just trailing marketing, business development, and finance roles - each with 71%.

For the first time, this year's survey report breaks out the responses specifically among start-up companies, revealing a promising 2017 hiring outlook for business school graduates. Three in 4 start-ups plan to hire recent MBA graduates in 2017, up from the 52% that hired them in 2016. More start-ups also plan to make 2017 hires from graduates of Master in Management (37%), Master of Accounting (23%), and Master of Finance (25%) programs.

Globally, more than half of survey respondents (52%) report that MBA base salaries will increase at (34%) or above (18%) the rate of inflation in 2017. Latin America (74% of respondents) and Asia-Pacific (59%) have the greatest share of companies that plan to increase MBA salaries either at or above the rate of inflation this year.

A majority of European and U.S. companies (57% and 51%, respectively) will maintain 2016 salary rates for new MBA hires in 2017. The projected median base starting salary for recent MBA graduates in the U.S. in 2017 is US$110,000, up from a median of US$105,000 in 2016. This represents an 83% premium over recent bachelor's-degree holders in the U.S., who can expect to receive a median starting salary of US$60,000 in 2017.

"Once again, this year's report brings to light the continued value of the MBA degree to the marketplace," said Megan Hendricks, executive director of MBA CSEA. "The increased interest in specialty master's talent provides further indication of the relevance of these programs at our member

(Source: GMAC)

With GDPR just around the corner (May 2018), the new EU rules are probably something you want to start thinking about, and companies could risk serious vulnerability in the face of data protection. But do the rules require you to hire a data protection officer? Richard Henderson, global security strategist at Absolute, provides Finance Monthly with the expert tips you’ve been looking for.

In just over a year the EU’s General Data Protection Regulation (GDPR) comes into effect, with part of it stipulating that some organisations will need a data protection officer (DPO). Impacted companies that haven’t already assessed their data protection technology, policies and processes against the regulation’s mandates, need to take action now to address any shortcomings.

The regulation may have been four years in the making, and amended throughout the process, but what has been clear from the start is that it intends to define an era where lax data management is not tolerated. The letter and spirit of the regulation reflects an expectation that data protection should be a priority, not an afterthought. Individuals’ rights around their data will be strongly upheld and companies found wanting will face tough punishment.

In this, the financial services sector has some experience. Despite being responsible for a relatively small percentage of the total security breaches reported to the Information Commissioner’s Office (ICO) in 2015-16, it attracted a third of the financial penalties the ICO pursued. With fines for data protection non-compliance set to rise significantly under GDPR (up to four per cent of annual global turnover), the industry cannot afford not to take note and to prepare.

The overall aim of GDPR is to make EU privacy laws fit for the 21st century. While there is a major emphasis on enforcement it also introduces mandatory data breach reporting requirements, in some cases within a challenging timeframe of 72 hours.

 

The role of the data protection officer

The requirement to appoint a data protection officer (DPO) is summarised as being in the case of “public authorities,” “organizations that engage in large scale systematic monitoring” and “organizations that engage in large scale processing of sensitive personal data”.

Organisations meeting these requirements will need to make someone responsible for data protection. It will be extremely important to have the right person for the job so legal advice should be considered when hiring.

The DPO must have expertise on data protection law and practices, is expected to keep their knowledge up to date and to report directly to the highest level of management. In short, this is not a responsibility to be taken lightly or to be tagged onto an existing role where the necessary level of expertise, knowledge and responsibility does not already exist. ​It is a professional role, expected to be accorded a sufficient level of seniority, with standing in the firm and the resources to maintain and build on knowledge.

DPOs will need to be supported by a thorough assessment and (where necessary) overhaul of policies, processes and procedures to ensure GDPR-readiness. A big part of their job will be ensuring the right technology is in place to prevent data breaches, while maintaining and reporting on security.

 

Enough is not good enough

The cyber-attack threat landscape continually changes, forcing businesses to evolve their security strategies and policies to keep up. The risk of non-compliance with GDPR is simply too high, not just in terms of potential financial impact but also corporate reputational damage from compromised data. A DPO will be central to safeguarding the organisation’s reputation, maintaining the right technology and ultimately, preventing a large-scale data breach.

GDPR recognises that situations have changed immeasurably since its preceding 1995 Data Protection Directive when the internet was still in its relative infancy. Today, larger volumes of data are not only created and stored but also widely transferred and held on mobile devices.

GDPR had to bring data protection enforcement up to date for the modern day. By setting the fines level for infringements at the level it has, it is sending out a clear message that ‘enough’ is not good enough. Companies need to make data protection part of the fabric of their organisation or pay the price for not doing so.

The price could be hefty indeed for UK business. If cybersecurity breaches stay at the level reported in 2015, fines could rise from £1.4 billion to £122 billion, according to the Payment Card Industry Security Standards Council.

Companies with limited IT knowledge and expertise may feel that punishments meted out after the event should be balanced by guidance and instruction on breach prevention, so that they can prevent falling foul of the regulation. While it is rightly incumbent on companies to adequately secure data, the options available to them to do this are matched only in their number and variety by the methods hackers have for getting in.

EU GDPR is incontrovertibly punitive but companies looking at it in full must see the opportunity the regulation gives to them to avoid incurring penalties.

 

Taking stock

By interpreting what the measures require companies to do, they can take action to keep data safe and thereby avoid non-compliance. This includes putting in place processes to provide data to subjects if they ask for it and to remove records if requested when it’s no longer necessary to hold them. It includes potentially putting in place the data protection officer and - perhaps above all - mandates ‘privacy by design’, meaning that data protection has to be built in to systems when they are designed rather than afterwards as an add-on.

This last measure is – if any were needed – the clearest indication of the regulator’s intention to instil into all companies a culture of data protection, one that drives systems and processes rather than the other way round.

A designated DPO dedicates a level of time and expertise that is required now for robust data protection. After all, 72 hours to report a breach is a short space of time and staying on top of policies and processes around data retrieval, access and removal is a big job. Organisations need the capabilities in place to manage data across their entire device estate. A single point of contact with specified responsibilities stands to help the company at the same time as helping the regulator.

Above all else, a dedicated data protection role will help companies prevent data issues, safeguard their reputation and avoid potential non-compliance.

For one particular part of the financial services sector, GDPR presents a specific opportunity. Strict new rules should mean the cyber insurance market will grow. With breaches set to be more widely reported under the new regulations, more data will be available to insurers to set premiums so we are likely to see an increase in the number and range of cyber insurance offerings.

Companies concerned by the length and breadth of the EU GDPR should step back and consider that, in simple terms it obliges organisations to put in place security measures appropriate to the risks. If a data breach occurs it will be hard for that organisation to argue that it had done this. Therefore, the goal will be then what it is now – to have in place the resource, policies, processes and technology to prevent breaches.

Companies should reassess how they detect suspicious activity on their network and consider options for persistent connectivity and encryption for systems, devices and data. The threat of higher fines certainly focuses attention on data protection but in reality, it must always be a top priority for the financial services sector.

No one wants to have their good company name smeared in the headlines because of a breach or incident that could have been avoided. It’s up to all of us in the security space to ensure that we are doing everything we can to keep the data entrusted to our protection safe from harm. We owe it to ourselves, our shareholders, and the public who trust us to steward their most sensitive of data.

by Greg Thorpe, Managing Director, Howett Thorpe

Until recently AAT qualifications were cut and dried. Either it was a pass or a fail. Employers had no idea whether a candidate with an AAT Qualification had just scraped through, or was top of the class.

As of September 2016, this all changed with the introduction of a new grading system. Anyone who has taken or is studying for the new AQ2016 qualification will be graded as follows: unclassified, pass, merit or distinction. For line managers, Finance Directors, HR professionals and those responsible for talent acquisition, this could provide you with an additional way of shortlisting candidates for your finance and accountancy roles.

However, not all new qualified candidates or students currently studying towards AAT will be assessed using the new criteria. Until 31 December 2017 it is possible to continue to study the old AAT Accounting Qualifications 2013 (AQ2013) if already registered, and pre hiring assessment therefore be assessed as either a pass or a fail. All students that have registered since September 2016 will take the new AQ2016 qualification.

What Does This Mean to Your Business?

The AAT accounting qualifications have been updated to make them more relevant to business today. A key difference between AQ2013 and AQ2016 are ‘synoptic assessments’: linking together multiple connected topics and testing students on their understanding of the whole syllabus, not just each unit. Synoptic assessments have been developed to assess core accountancy skills and the student’s ability to apply them in the workplace.

Students will also have fewer opportunities to re-sit exams at levels 2 and 3, they will only be allowed to attempt each unit twice within 12 months. On average, it takes between 6 and 12 months to complete each level. It therefore follows that any candidate with a new AQ2016 qualification, as of March 2017, will have successfully passed each unit first time around.

Anyone who is interviewing candidates that are currently studying towards AAT, may find it a useful talking point to gauge how well it is going for them. Candidates that have failed a unit more than twice will have to wait for the next 12-month assessment period to open, and this may have an impact on their suitability for your role.

As mentioned above, the new grading system will also give employers a way of identifying more highly qualified candidates. A distinction represents a 90-100% success rate, combining all unit assessments and the synoptic assessment for the level.

For example, a Level 2 Foundation Certificate in Accounting has 4 unit assessments (Bookkeeping Transactions, Bookkeeping Controls, Elements of Costing, and Using Accounting Software), and a synoptic assessment that may also test students on the ‘Work Effectively in Finance’ unit, as well as other units. Each unit assessment counts to 16-22% of the overall grade; the synoptic assessment is 30% of a Level 2 grade.

Naturally, candidates with distinctions will be much sought after. However, academic achievements - whilst desirable - are not the only qualifications you should be looking for when shortlisting candidates. Cultural fit, motivation, interpersonal skills - amongst other personal attributes - are all important; so don’t overlook those candidates with just a pass or a merit if they are strong in these areas.

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