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THE EUROPEAN VOTER MIGHT STRIKE BACK

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Yves Kuhn

In October the IMF’s downgrade of expectations for global economic growth, with its forecast for the year ahead reduced to 3.3%, led to a 10% equity sell-off. Weak manufacturing data in Germany, Europe’s economic powerhouse, led to concerns about a widespread European recession. However, subsequently, we have seen what was probably one of the fastest recoveries. The wall of worries includes a recent tumble in oil prices. Initially there were questions as to whether the severe drop was demand-led and not driven by excessive supplies. However, since the OPEC meeting, the capital market has concluded that the rout in crude prices was more supply-driven, as OPEC continues to ignore low prices. Equity markets continued to reach new highs in the US, despite the fact that some large market caps in the energy sector lost 10-15% of their valuation. The oil rout did not stop there. As oil-producing emerging markets started to feel the heat, especially Russia, which was already on its knees, looking feverishly for a means to limit the damage to its economy. Mexico, another oil-producing country, decided to prop up the peso when its drop in valuation against the USD became too excessive.

Lower oil prices are inflationary in the mid-term, as consumers are left with more cash in their pockets. Clearly most cash-strapped Western economies must welcome this Christmas present, and after some initial panic attacks, the market has resumed breathing normally, with risk assets continuing their ascent. We note that not all risk classes reacted positively; especially high yield bonds in the US, which did not fully recover from their sell-off. Energy companies represent over 17% of the US high yield index, and their prospects seem to be gloomier with declining oil prices.

Yves Kuhn

Yves Kuhn

So what would it take to derail this red hot bull market and strike fear into investors’ hearts? There are no limits to what could happen. Russia could default on some of its debt in two years, the Ukraine could collapse, China could fail to recover from its fall in property prices, and so forth. However, one of the most powerful potential outcomes would be if Europe’s voters started to back away from the European project. This might not be too far off, as Greek snap elections bring closer the possibility of an EU country exiting the Euro zone. One must also not forget the far right in France and in Spain, which seem to have majority support.

The uncertainty linked to a disorderly exit by an EU country would be more powerful and more wealth destructive than any war in the Ukraine or in the Middle East. So far, the powerful wall of money provided by the various central banks has side-lined the wall of worries. However, if the market is caught out by rising uncertainty about the Eurozone’s future, even loose monetary policy will not sustain investor interest in risky assets and investors will vote with their feet. If a newly-elected Greek government led by Syriza declares its intention to renegotiate Greece’s sovereign debt, the resulting fears for the Eurozone future would be extremely wealth-destructive.

On the flip side, there is a positive outlook to be found. Europe’s economic growth could surprise on the upside; a 12% correction in the Euro, a 40% correction in crude and the European Central Bank pumping money at an increasingly high speed into European economies could jump-start economic activity. Some estimates predict that over USD 500 bn would be returned to Western consumers through a 40% drop in crude. In fact, one of the best ways to maintain voter support for the European project is job and wealth creation. Many of the larger economies, particularly France and Spain have recognised that the voters’ pain threshold has been exceeded. Luckily the German government’s austerity demands are much less rigid these days.

Our client portfolios continue to see a positive bias towards risk assets such as equities and high yield bonds in Europe. In the short term, the recent oil correction will be extremely deflationary and we are braced for lower global inflation figures, both in European economies and in many emerging markets. Long-duration bonds, especially in the US, might be an interesting short-term trade. It is probably a sign of the times that even in China inflation surprises on the downside, with a 1.4% increase year on year. That said, we will look to reduce our exposure to risk assets if any of the fears over the Eurozone’s future reignite and become more substantial.

By Yves Kuhn, Chief Investment Officer at Banque Internationale à Luxembourg

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How virtual training is changing the game in remote learning

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How virtual training is changing the game in remote learning 1

By Aris Apostolopoulos, Senior Content Writer at TalentLMS and a faithful follower of the eLearning mentality.

Along with the latest leaps in technology, the current pandemic situation has made remote working not just a niche but a necessity. And with it, the need for remote learning has also skyrocketed.

Things are changing fast for most industries: a McKinsey Global Institute research found that, by 2030, some 375 million workers will be required to master new skills. But apart from the practical need for it, continuous learning is also one of the most efficient ways to keep remote workers engaged and productive.

The question then arises: what kind of remote learning should companies be investing in?

Ideally, it should be a type of training that combines the effectiveness of instructor-led training with the flexibility of online learning, to cater to the realities of today’s (and quite possibly tomorrow’s) remote working landscape.

Enter virtual training.

What is virtual training

Virtual training is a broad term that refers to any training that does not take place in a physical environment — rather in a virtual one. This type of training makes use of new technologies, predominantly web and cloud-based, to deliver asynchronous or synchronous learning.

In asynchronous virtual training, learners go through the course (usually modules utilizing a variety of media like videos, PDFs, quizzes, etc.) at their own pace. On the other hand, synchronous virtual learning is virtual instructor-led training (also known as VILT). During VILT, learners attend live classes conducted online via videoconferencing tools such as Zoom. Currently gaining momentum as a delivery method for training, VILT offers the immediacy of instructor-led training — while at the same time it keeps the costs significantly lower and simplifies the organizational side of things compared to traditional, on-site training.

The difference between remote and virtual training

You may have seen these terms used interchangeably to describe any training solutions that take place in online, virtual environs. While that’s not technically wrong, there is a key difference between remote and virtual training.

Remote training refers to a physical distance between a learner and an instructor. This usually requires a training software (like an LMS) that users can log into and attend courses online. Virtual training, originally, only referred to the nature of the delivery method (aka one that takes place in a virtual environment). As such, virtual training could also imply that a learner and an instructor are physically at the same location, utilizing technology to go through virtual scenarios (a popular practice in the sales and customer service industries).

In this post-COVID world we’re living, though, the terms “remote training” and “virtual training,” as well as the term “online training,” have become somewhat synonymous.

Benefits of virtual training 

Companies that are considering investing in virtual training have several things to consider. For starters, virtual training (that also implies a physical distance between learner and instructor) adheres to social distancing rules and is much safer for the health and wellbeing of all involved than real-life training.

But what are some of its other benefits?

Virtual, instructor-led training offers a seamless transition from the classroom (or any physical training space) to an online environment. Videoconferencing sessions are particularly comforting to employees who were used to face-to-face interaction. But they are also suitable for the younger generation of employees — whose inherent need for mobility and flexibility means that being able to attend a lecture on their mobile phones makes it less likely to disengage or drop off from training.

A Training Mag survey on graduates of both the virtual and classroom course found that virtual training is equally, if not more, engaging than its real-life equivalent: 86% of virtual training participants rated the experience “just as engaging” or “more engaging than” classroom training. And there is a well-established link between feelings of engagement and information retention: humans tend to learn faster if they find the subject interesting. This is further supported by findings in the same survey, that see participants averaging a score of 90% on a skill mastery test, which is 1% higher than average scores in traditional classroom sessions. So employees will be more engaged and will retain information better during virtual training — 80% of information, to be precise (according to research by Harvard Business Review).

What about other factors besides engagement and information retention? 

Cutting back on travel costs is also one of the reasons virtual training is gaining momentum. Booking experts to give lectures on-site involves covering travel costs (and quite possibly accommodation) plus all the administrative costs of organizing a real-life session: seating, stationery, food, and beverages, etc. Taking the learning process online allows companies to scale back on all these costs, and instead invest in the things that will really move the needle, like offering reskilling and upskilling training for their employees.

A TalentLMS survey conducted this year shows that 42% of companies stepped up their reskilling/upskilling training efforts after the coronavirus outbreak.

Virtual training best practices 

Like with any new tool or process, virtual training will yield optimal results when best practices are followed. Companies interested in virtual training should consider the following:

The need to cater to learners’ decreasing attention span

Learners can no longer be expected to sit through a 2-hour lecture that doesn’t change modalities frequently. One of the realities of remote working is that employees often multitask — and they may be tempted to do so during a videoconferencing, instructor-led course that drones on for too long. Switching gears frequently by keeping learning segments short and encouraging feedback and conversation in between is key.

The need to decrease screen time

Learner fatigue has become a serious problem, exacerbated by the fact that so much of employees’ time is currently spent in front of computer screens. Keeping virtual training sessions shorter, with breaks in between, combats that phenomenon.

The need for interactivity

We’ve already seen some of the benefits for VILT. However, relying solely on live, video-based learning robs learners from an interactive experience, assigning them to a passive role instead. And yet, interactivity is one of the critical factors that have made classroom learning so useful and practical to humans. Virtual training should therefore comprise different delivery methods, from quizzes and polls to interactive multimedia.

The need for frequent evaluation and data analysis

At the end of the day, a successful virtual training program is one that allows companies to have a clear look at insights regarding learners’ progress. A robust data analysis helps companies identify potential hurdles before they become severe issues and adjust the learning approach accordingly. That’s why investing in the right LMS is crucial to embarking on a successful virtual training journey.

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Businesses need to prepare for Brexit transition now

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Businesses need to prepare for Brexit transition now 2

THE Brexit process has been marred by uncertainty and it still remains unclear what our future relationship with the EU, our biggest trading partner, will be.

By Steve McCrindle, a VAT expert at Haines Watts, looks at things business owners should consider through the transition.

The current transition period is due to end on 31st December, 2020. However, Michael Gove, the Chancellor of the Duchy of Lancaster, revealed in the House of Commons this week that just 24 % of businesses believe they are fully ready for the end of the Brexit transition period. Nearly double – 43% – think the transition period will be extended. The Government however has informed the European Commission that the UK will neither accept or seek an extension to this.

Whether a deal is agreed or we exit on World Trade Organisation terms, it’s clear there will be consequences when it comes to VAT, border control and Customs duty, which, in most cases, will be immediate. This will impact all businesses that trade with the EU.

With only a few months left until the transition ends, businesses need to plan and prepare for all outcomes. While the devil will be in the detail when it comes to the changes, these are some areas that need to be considered.

Supplies of Goods and services and value added tax (VAT)

The movement of goods between Great Britain (GB) (not the UK) and the EU is set to change substantially from January 1, 2021. I use GB because if the Northern Ireland Protocol is executed it will mean Northern Ireland will be treated differently to the rest of the UK. Therefore, it is vital that business owners that trade with Northern Ireland are aware of the consequences post-Brexit.

Exports and imports will replace EU dispatches and acquisitions. Zero-rating for the export of goods will still exist if the relevant conditions are met. As things stand, any goods that are imported are liable for import VAT and potentially Customs duty.

Postponed VAT Accounting for Imports to be introduced

To help lessen this impact, HMRC is going to scrap the current physical charging of import VAT and instead, import VAT will be accounted for by adjustments on VAT returns under a new process called postponed VAT accounting (PVA).

PVA is an automatic process that can help minimise cash outflow for business owners. It will apply to all imports, both from the EU and countries outside the EU. Although there may be different regulations and a process for goods arriving into the UK where the value doesn’t exceed £135.

Status-quo for VAT on services

To avoid double or no taxation, the UK looks set to continue to apply VAT place-of-supply rules in line with the EU VAT Directives, with few changes to the VAT treatment of services envisaged.

What does all this mean for businesses? Well, as examples, business owners will need to think about the business’ liability to be registered for VAT within the EU or alternatively, if they can deregister within the EU. This will be especially important for businesses that provide electronically supplied services to consumers in the EU and also suppliers of goods in GB/UK to non-VAT registered customers in the EU.

New Border Controls

The UK Government confirmed in February that the Brexit transitional arrangements were no longer required and that full Customs controls will be implemented for goods coming into the UK from the EU from January, 1, 2021. However, mainly due to the impact of the Coronavirus crisis, the new requirements will now be introduced in three phases between January and July next year. The Government has also issued a new UK import and export guide to border controls.

During the first phase, businesses importing standard goods will have up to six months to complete Customs declarations. Once the declaration is submitted, any duty will then be due on the goods and the new UK global tariffs (UKGT) will apply. Of course, there will still be checks on controlled goods such as tobacco and alcohol.

From April, the second phase will commence. All imports of products of animal origin, whether that’s meat, honey, milk, egg products or pet food, will need pre-notification and health documentation. This also includes plants and plant products too.

The third phase will kick in from July and any business moving goods will need to make declarations at the point of importation. Customs duty will then be due at this time.

Customs duty

Goods moving between EU Member States are not currently subject to Customs duty and this will remain for UK-EU trade until December 31, 2020. It will only change from January 1, 2021. Businesses will need to plan for Customs duty compliance and also for any financial impact this additional cost will have.

All businesses will need to review their supply chain to ensure they comply with the VAT, border control and Customs duty consequences and requirements post January 1, 2021 and this should be done as soon as possible. Business owners need to prepare for both the administrative and financial impacts – on their businesses over the next few months.

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How to maximise your virtual communications for effective team meetings

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By Tony Hughes, CEO at Huthwaite International leading global provider of sales, negotiation and communication skills development, shares advice on the key skills your team needs to create a great virtual communications culture.

Virtual meetings are now familiar territory. Despite this, many of us are unaware how to make them truly effective.

Understand the purpose

We’re all inundated with video call after video call, whether that’s for business meetings with colleagues or socialising with friends – it’s become a daily occurrence for most. If you had six or seven face-to-face meetings each day, you would quickly become overwhelmed, so consider this when planning virtual meetings too. Ensure each meeting has a purpose and make it clear to all involved from the start.  For example, is the purpose of the meeting to think creatively and generate new ideas or is your aim to get focused and make some important decisions in one or two major areas?  Make sure people know what is expected from them in advance.

Also, take into consideration who is attending each meeting. We’re all aware that communicating via video can lead to problems when there are too many people trying to have their say – so don’t overcomplicate it. On the other hand, you don’t want to create additional meetings to communicate the points already agreed so think carefully about who needs to be involved.   Base your decisions on your meeting invitations around the meeting purpose.

Engage people in a way that achieves your meeting purpose and manage your communication airtime

Our research into communication skills shows that there are three main classes of behaviour important to group interaction in task oriented situations, these are:

  • initiating behaviours– putting forward ideas, concepts, suggestions or courses of action
  • reacting behaviours– putting forward an evaluation of other people’s contributions
  • clarifying behaviours– exchanging information, facts, opinions for the benefit of the whole meeting.

Feedback on the proportions of these behaviours used in meetings can help groups examine their own behaviour and to assess the need for behaviour change. In effective group communications, all three main behaviour classes are present in a balanced way.

A tip to help set a good, cooperative tone for a virtual meeting and encourage a balance of behaviours is to start discussions with a non-controversial issue where people aren’t committed to a particular solution so a straight forward agreement can be reached, before diving into the more contentious areas of the agenda.   This encourages people to listen to and build on others’ ideas from the beginning, will help set the tone for the rest of meeting and will be a useful precedent to refer to. Try to structure meetings in a way that means all points are addressed properly and are fully developed before moving on to another issue or suggestion.

Don’t allow discussions to lead to a breakdown in communication

A strong indicator of an effective meeting is how well people respond to one another’s ideas and proposals. When a creative type meeting is working well, people react positively or at least constructively, to what others say. When a meeting is ineffective, the opposite occurs and tensions can rise leading to a potential communication breakdown which will diminish any successful meeting outcomes.

What we might perceive as a negative attitude can lead to what Huthwaite refer to as ‘Defend/Attack’ behaviour where opinions are expressed more strongly and more directly which can lead to people feeling exposed and becoming overly defensive. Defend/Attack usually involves value judgements and contains emotional overtones.

Avoid these behaviours by responding positively and appropriately and most of all, try to actively listen to what is being said. Really take the time to understand a differing point of view point and respect their position before jumping in with a response. Listening is key and our research shows it is often what separates skilled communicators from unskilled. Taking the time to listen will give you time and space to fully consider other opinions.  If you decide you do disagree with what they’re saying, actively listening will leave space around the discussion which offers the opportunity to react in a constructive, rather than an emotional manner.

Avoid irritating verbal behaviours

There are a few verbal behaviours that can be instantly harmful to meeting discussions and apply to meetings both in person and online. Virtual meetings can present multiple communication barriers such as poor connections and technology issues, leading to irritation for all parties involved so it’s important not to add further irritation with the words you choose. Declarations that you are being ‘fair’ and ‘reasonable’ when talking to people can cause tension as they can undermine the person you’re speaking to and may cause lasting damage to your relationship.

Other phrases, such as telling someone you’re ‘being honest with them’ or ‘that you’re trying to be frank’, can be very misleading.  You don’t intend to imply that weren’t being honest a moment ago but that is the inference you’re allowing by using these kinds of phrases.  Building a reputation that you are selectively honest is the kiss of death to a productive meeting.  Steer clear of this kind of language if you want to keep your reputation intact.

Make sure meeting standards don’t slip and build trust in your virtual environment

If you are hosting a business meeting online, it’s important that you don’t let your normal meeting standards slip. Try to nominate a meeting manager/chair who can focus on managing the discussion, making sure everyone speaks their turn and that you cover everything that needs to be discussed. Their purpose is to steer and guide the conversation in a productive manner. It’s helpful if the chair can clarify the information presented and the meeting outcomes, especially for long or heated discussions where meeting focus can shift about very easily.  This will ensure everyone is clear about what has been agreed.

Arguably, In an online meeting this can be done even more efficiently than in the real world. This is due to video conferencing features such as the ability to ‘highlight’ a particular participant when speaking or sharing links and additional information. So, if you want a meeting to be productive and efficient, use the rich features of the technology available to keep standards high and meetings effective.

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