Whether a company is a sole trader or freelance, has only directors or employs a number of staff, the one common factor is that at some point in time expenses will be incurred and have to be claimed against tax. Sometimes the rules of expenses reimbursement can seem like a minefield and so, in this article I discuss common issues or mistakes businesses come across when dealing with general expenses.
 
N.B. The information below is a guideline. Companies must check expenses reimbursement in relation to their own business dealings to ensure that all allowances are correct.

​​Business Entertainment
 
With so many people now working as contractors or freelance, some business owners get confused on what can and can’t be claimed as expenses for their staff. The bottom line is that unless a business associate is on the payroll as an employee, the cost of taking them out as a thank you for their work is seen as business entertainment. Therefore the business cannot claim any tax relief or claim the VAT back.
 

Claiming all Food and Drink as a Business Expense
 
A common misconception by business owners and employees is that they can claim ALL food and drink bought when on business as an expense; however this is not the case. Tax relief can only be claimed on refreshments if they are bought outside normal working patterns, i.e. not the usual 9am-5pm. This can be hard to define, but the simplest and most common practice is that the majority of expenses claimed in this manner would be if someone who is usually office bound is away on business overnight or paying for lunch over a client meeting.
 

Vehicle Expenses
 
The majority of SMEs will have employees who use their personal car for business purposes, for example a field sales executive. Any costs incurred in this nature by employees are tax free. There are two simple ways to keep a record of these expenses; however some companies make the mistake of combining the two.

1. Vouched Expenses – the most accurate method, an employee will collect and submit receipts for fuels costs for which they will be reimbursed by the employer. As well as submitting receipts, the employee has to keep a record of the reasons and distance of travel.
2. Flat Rate Kilometric Allowance – the most common method, these allowances are calculated using a standard system to decide the expenses which should be reimbursed by the employer to the employee. The total amount of kilometres travelled in a year by one employee is noted and they are compensated on the following rates as stated on revenue.ie:

Human Resources is responsible for quite a lot more than realised within organisations, whether it is providing advice on employment law or hiring employees, dealing with employees queries and managing difficult work situations. However one element which is often overlooked is talent. Most business owners know the amount of work that goes into finding the correct person for the job, yet once that all-star has been found, it’s just as important, if not more so to ensure their talent is further identified, developed and leveraged.

For talent building to occur, changes need to be made from the top, with managing directors concentrating on providing managers and team leaders with the opportunity to change employee roles to maximise talent. However it is the role of managers and team leaders to communicate with employees, as well as assess certain talents through offering stimulating opportunities and various assignments for changes to take place.
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In this article, I concentrate on what line managers should be doing on a constant basis to ensure they are talent builders within the company they work for.
 

Look Ahead

For a company to succeed, all areas of competition and the industry it operates in should always be monitored to see what might happen in the future. Being a business at the top of its game right now isn’t good enough anymore. Line managers must look at what the company might need with regards to talent to ensure they stay top of the marketplace 12-24 months down the line.

This means that managers have to assess the talent pool to see how certain employee capabilities can be used or moulded to benefit the company in the future.
 

Assess and Reassess

Great managers know their team inside out. They know their strengths and weaknesses and what each person brings to the team. If they don’t then they aren’t managing properly. A team leader should be able to rhyme off high performers without the bat of an eyelid when asked and should be able to realise which employee has the greatest potential.

With this in mind, it is important for managers to have an idea of the plans for each team member. They should ask themselves if they are willing to promote an individual and expand their responsibilities or if they should be in the role at all. Sometimes it’s realised that although and employee is not excelling in one area in the company, it doesn’t necessarily mean they aren’t suited to another role where they could perform strongly. Once the answers to these questions are established, a manager can start to inspire and build talent suitably.
 

Interact with the Team

It’s imperative for line managers to professionally and personally get to know their team to try and get to know their aspirations and professional goals. Offsite team building days and seminars are often the best way to recognise core values and talents, as well as get to know employees out of the working environment. Every staff member should address at least one developmental issue for continued growth, where goals and actions must be noted.

Once developmental objectives have been established, managers can then ensure that team members go through an experience where they have to use certain skills and thought processes that they don’t usually. This will push team members and give them a personal insight into other areas of the business that they might prefer and excel in.
 

Stay in Touch with Previous Employees

As previously mentioned in another article of mine, regrettably talent is often lost due to ‘moving up the corporate ladder’ or even personal issues. Managers must try to stay connected to top talent that has moved on, through the likes of LinkedIn or other avenues. They should connect with previous employees a few times a year to see how they are, ask if they might want to come back or identify other talent that might be interested in working for the company.
 

Employ Talent from Elsewhere

Whilst talent should be built on with existing employees, external talent should also be considered. Managers should take it upon themselves to talk to external recruiters to get a better understanding of top talent standards within their industry.

Head hunting should also be considered, even if there are no current openings, with individuals being called in a bid to establish a relationship with them and to get to know their current employment status. Individuals who bring a fresh perspective are always seen as a positive addition to the mix of talent already employed within an organisation.
 

Never Stop Learning

One of the most important points for managers is to always stay abreast of talent management practices. They should read and learn from great talent developers on how to develop the best team possible and be open to executing new innovations that fit the business needs.  Inspiring leaders are always acting on teaching moments for their staff, asking what they learnt from carrying out a task and finding out what could potentially be done differently next time.


The contents of this article are necessarily expressed in broad terms and limited to general information rather than detailed analyses or legal advice. Specialist professional advice should always be obtained to address legal and other issues arising in specific contexts.

Employee personality tests may seem a bit outdated, but in today’s world, where the number of job applicants far outweighs the number of openings, more and more business owners are turning to personality tests to see if potential and current employees are right for their company.
 
So why turn to personality tests? In recent years, IQ (intelligence quotient) tests have been seen as limited in their measurement of emotional qualities in a person, which we all know is important in the workplace. In 1990, an additional intelligence: emotional intelligence (EQ) was proposed by Peter Salovey and John Mayer. This covers a wide range of personalities and reactions to certain situations, however the four main elements stated in the study comprise of:

1. People need to be able to accurately perceive emotions in themselves and others and have the ability to express their own emotions effectively.
2. People need to be aware of how their emotions shape their thinking, decisions, and coping mechanisms.
3. People need to be able to understand and analyse their emotions, which may often be complex and contradictory.
4. People need to be able to regulate their emotions so that they can dampen negative emotions and make effective use of positive emotions.

 
Employees with high EQs are more likely to stay calm under pressure, empathetic towards their team members, can admit and learn from their faults, lead by example, understand how to settle conflict efficiently, receive criticism well and show grace under pressure.
 
There are many personality tests for companies to choose from, such as the Myers-Briggs Type Indicator or the Hogan Assessment plus many more, all of which use very different and in depth approaches to assessing a candidate’s personality.
 
Whilst personality tests may bring something more to the interview and let employers find out something extra about the interviewee than the age old “What are your strengths and weaknesses?” it’s important for business owners to remember not to use personality tests as the only instrument for selection. Personality tests typically measure five personality dimensions in an applicant: extroversion, emotional stability, agreeableness, conscientiousness, and openness to experience, however body language, tone of voice, previous experience and future goals should all be taken into account throughout the application process and interview.
 
With this in mind, I have listed the pros and cons to using a personality test when hiring potential new employees.
 
Advantages

• If taken before an interview, personality tests help in narrowing the selection of candidates, as it gives an insight into the characters of all applicants and helps employer’s decide which respondents should be invited for an interview.
• The test can also aid in helping managers decide which questions they should ask the candidate when they do come for an interview.
• With only having a limited amount of time in an interview, candidate skills and abilities can often be overlooked on a CV or face-to-face, however a personality test offers a deeper insight into how they might fit into a company work culture.
• There is often a lower turnover of staff within a company if applicants have traits similar to the rest of the workforce.
• Personality tests usually detect interpersonal characteristics that may be required for some jobs.

 
Disadvantages

• Some personality assessments can take a lot of time and effort to complete, which may dissuade a potential candidate from going further with the application process.
• An applicant’s experience and training may conflict with the results of the test, and therefore make it more difficult for a manager to decide how to proceed.
• More often than not, applicants answer personality tests based on pleasing the interviewer or by what is socially acceptable, which discredits the test.
• There could be a lack of diversity in the workforce if all employees have the same traits.
• Personality tests can be expensive, from paying for the tests to paying someone to score the tests. This needs to be weighed against the likelihood that the right candidate will be offered the job.
• Even if an applicant answers the personality test perfectly, this does not mean that they are the right fit for the job and will carry through with the same efficiency if they are offered a role within the company. This point highlights again just how important it is to not solely use a personality test to hire employees.

 
Whether a company decides to enter into the hiring process through using a personality test or not, the advantages and disadvantages need to be considered based on what is right for the business. Some industries and specific roles may benefit more from using this type of test, however as mentioned in the cons, it can also deter an applicant from applying for the role. As previously stated, the most important factor is that the test is not used as a stand-alone method in hiring as this could be more detrimental to business in the long run.


The contents of this article are necessarily expressed in broad terms and limited to general information rather than detailed analyses or legal advice. Specialist professional advice should always be obtained to address legal and other issues arising in specific contexts.