Bookkeeping, accounting and auditing clerks have the highest risk of automation

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With 35 percent of all jobs in South Africa (almost 5.7 million jobs) currently at risk of total digital automation within a mere 7 years,  the country could see a crippling effect compounded by a fragile economy and growing unemployment.

Bookkeeping, accounting and auditing clerks have the highest risk of automation. It’s not just manual labour jobs.

Dr Roze Phillips, Post Graduate Diploma in Futures Studies alumnus from the University of Stellenbosch Business School (USB) and Managing Director for Accenture Consulting in Africa says that the country needs to act now to ensure that humans and machines can work together in the future. Dr Phillips presented at a Leader’s Angle hosted today (16 April) held at USB.

“Our research shows that if South Africa can double the pace at which its workforce acquires skills relevant for human-machine collaboration, it can reduce the number of jobs at risk from 3.5 million (20%) in 2025 to just 2.5 million.”

“With the threat of automation growing, South Africa is less prepared than other countries and needs to give its workforce skills to participate in the digital economy. In a country with a staggering 27.7% unemployment and jobless youths making up 75% of unemployment, the future looks bleak.”

Dr Phillips says job transition is not new. In the pursuit of higher productivity at lower cost options, jobs have for many years been shed.

“In recent times, many manufacturing and standard business process intensive jobs were outsourced to countries where labour was cheaper. Those jobs rarely made it back to home soil but at least outsource recipient countries benefitted from the employment opportunities created there. Today, the same phenomenon occurs. But now, the search for labour arbitrage is no longer between physical geographies; today, jobs are lost to the digital world and will, in all probability, never be done by humans again.”

She says that in a country like South Africa where poverty remains, rates of unemployment are high and social security questionable, it’s vital for the country to upskill its people to collaborate with machines to enhance their own productivity, not job losses.

“Machines do not consume things and whilst they can replace human work, they do not drive purchasing behaviour or contribute to GDP. Society will regress if humans can’t work, earn and spend. South Africa needs to learn how to ‘run with machines’.”

Which jobs in South Africa are the most at risk?

Bookkeeping, accounting and auditing clerks have the highest risk of automation says Dr Phillips. It’s not just manual labour jobs.

Her company Accenture researched various job categories drawn from Stats SA to gain insight into human-like (analytical, leadership, social intelligence, creative) and machine-like activities (routine work, transactions, manual labour) taking into account the type of work, skills and tasks, the recent skills evolution in jobs, degree of work automation, work supply demographics and productive structure.

“The results clearly show that occupations that allocate more time to human-like activities have a lower probability of automation while workers involved in occupations such as production, office administration, tellers, cashiers, farming, food preparation, accounting, auditing, insurance claims and policing processing clerks, construction, mining, transportation, installation and maintenance are at highest risk.”

Both white- and blue-collar jobs are at risk. The more predictable and repetitive the activities that make up the tasks, the more likely it is to be replicated by machines or automated. The safest jobs are those that require influencing and advising people, teaching, programming, real-time discussions, negotiating and cooperating with co-workers.

Dr Phillips says that although the research seems to paint a gloomy picture, the opportunity for South Africa is considerable.

“Digital technology will usher in a new economic era, exposing new sources of value and growth, increasing efficiency and driving competitiveness. For South Africa to rise to the challenge the country needs to recalibrate its economy and its workforce for digital, creating entirely new products, services and markets. And the time to do that is now.”

 Which skills are critical to learn?

In the digital economy work will no longer be restricted to one employer, job or team. People will need to constantly learn new skills remain relevant. Accenture has identified six skills that are critical to securing a job and ultimately retaining it.

 Learn to Earn

Foundation skills are critical – literacy, numeracy and digital literacy as well as basic employability skills such as conduct and work protocols (time management, listening, and negotiation)

Build Tech Know How

The ability to use digital devices and share data, working effectively alongside machine intelligence, understanding how technology and data are built, manipulated and applied.

 Apply WeQ

Social and relationship building will gain greater importance with teamwork, collaboration, communication, social and emotional intelligence and ability to manage others as key drivers.

 Create and Solve

Problem solving will require thinking unconventionally, gathering ideas from diverse sources an applying design thinking, critical thinking, reason and logic to assess and analyse problems, and entrepreneurial mindset.

 Cultivate a Growth Mindset

The foundation blocks for personal resilience and ability to cope with and adapt to change will require skills such as the ability to cultivate curiosity, openness, a growth mindset and the capacity of lifelong learning, underpinned by cognitive functions such as flexibility.

Specialise for Work

Specialised work skills will no longer be static or fixed in the digital economy and will need to continuously change based on context, industry, market demand and type of work.

 What leaders need to do today for tomorrow

Leaders will have the opportunity to reshape their organisations and society at large for the better if they accelerate reskilling people. But it needs to happen at an accelerated speed.

Prioritise skills for development

Selecting skills training will depend on the type of machine intelligence automation being used, as well as the size, sector and existing skills levels of an organisation. Accenture has developed a guideline which organisations can access to assist them in this process.

 Reskill at the top of the house

Businesses need new leadership skills to lead that are responsive, responsible and response-able. By engaging with employees and stakeholders, cross-collaboration with other industry experts such as academics, businesses and create learning opportunities for their staff to seamlessly join them on the journey.

 Keep building on what you have

Rapid reskilling can ensure that you keep your workforce but constantly change the way they do their jobs with innovative learning methods, enhancing digital capabilities to meet the challenging expectations of clients, service delivery and production.

 Change the mindset of ‘learning as a way of life’

Shifting from point-specific training to lifelong learning makes workers and organisations nimbler and organisations more adaptable to volatile markets.

 Use digital to learn digital

Digital learning methods such as virtual reality and augmented reality technology can provide realistic simulations to help workers master new tasks so they can work with smart machinery. The same technology can be used to help reinforce correct procedures on the shop floor, monitoring how employees execute tasks and coaching them to do it the best way.

 Create a more flexible workforce model

Rigid, formal job structures do not support the speed and agility demands needed in the face of digital innovation. Redefining and co-creating employment opportunities through more responsive role-based and gig-like work is a reality. These opportunities need to be available to both full-timers and freelancers.

 

Financial Director Salary

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The average pay for a Financial Director is R900,752 per year.

R0R1M
Salary R426,749 – R1,555,477
Bonus R4,894 – R360,647
Profit Sharing R0.00 – R304,649
Total Pay (?) R461,067 – R1,820,829
  • Country: South Africa
  • Currency: ZAR
  • Updated: 12 May 2018
  • Individuals Reporting: 239

Job Description for Financial Director

The financial director is the executive responsible for a company’s finances. They manage the people or teams who gather, analyze, and report financial data related to the company’s operations. Typically, they report directly to the chief executive officer and the board of directors; depending on the company, they may be offered a seat on the board.

Because of their unique insight into the company’s finances, the financial director serves an integral role in their organization’s upper management. They – and their staff – maintain necessary financial records and prepare reports on the company’s financial health. They work regularly with other departments in tasks such as payroll and planning project budgets. The financial director is responsible for keeping track of these projects, including earnings and losses, to forecast accurately their company’s future performance. As the key expert on the company’s finances, they are often expected to speak to investors and stakeholders about these projects and answer questions.

Financial director is typically an advanced position achieved after substantial career experience. These professionals typically have extensive experience in banking, accounting and/or related fields. Additionally, financial directors often hold advanced degrees related to business or finance. They may have status as a certified public accountant (CPA) (Copyright 2018 PayScale.com)

Financial Director Tasks

  • Manages the preparation of budgets, forecasts and accounting activities.
  • Directs the staff operations, business planning and budget development and compliance for the department.
  • Oversees the preparation of regulatory and financial reporting as required, and ensures compliance.
  • Develops policies and procedures to control and report financials.

Pay by Experience Level for Financial Director

Pay by Experience for a Financial Director has a positive trend. An entry-level Financial Director with less than 5 years of experience can expect to earn an average total compensation of R845,000 based on 63 salaries provided by anonymous users. Average total compensation includes tips, bonus, and overtime pay. A Financial Director with mid-career experience which includes employees with 5 to 10 years of experience can expect to earn an average total compensation of R985,000 based on 83 salaries. An experienced Financial Director which includes employees with 10 to 20 years of experience can expect to earn an average total compensation of R1,063,000 based on 126 salaries. A Financial Director with late-career experience which includes employees with greater than 20 years of experience can expect to earn an average total compensation of R1,178,000 based on 54 salaries.

Information courtesy of www.payscale.com

CRYPTOCURRENCIES AND TAX

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The advent of cryptocurrencies, and in particular the substantial gains that are associated with investments in cryptocurrencies, caught the attention and interest of the world – and not least of all, that of the taxman.  Because where money abounds, tax is normally to be collected.

SARS recently issued a statement explaining its views on the tax treatment of cryptocurrencies. In summary, SARS states that cryptocurrencies are not to be treated as currency for tax purposes, and that the normal tax principles should apply to cryptocurrencies as if they are intangible assets.

 

CURRENCY OR NOT CURRENCY? 

The reasons provided by SARS for the view above are that (a) cryptocurrencies are not official South African tender and (b) are also not widely used and accepted in South Africa as a medium of payment or exchange.

If SARS is suggesting that the two reasons afforded for not treating cryptocurrencies as currency are the criteria to determine whether something qualifies as “currency” for tax purposes, no currency other than the ZAR will qualify as currency.  Take for instance the US dollar – it is not official South African tender and is also not widely used and accepted in South Africa as a medium of payment or exchange.  Does that make it something other than currency?  Surely not.

The SARS view, and more specifically the basis for the SARS view, as to why cryptocurrencies are not tantamount to currency appears unscientific and potentially wrong.

 

THE IMPORTANCE OF THE CLASSIFICATION AS CURRENCY OR INTANGIBLE ASSET

Currency is not an asset for capital gains tax purposes, and as such, not susceptible to capital gains tax upon disposal.  Consequently, if cryptocurrency is currency, any capital gains upon disposal will escape the capital gains tax net.  In contrast, intangible assets are, in principle, subject to capital gains tax (or income tax).

Special tax rules apply to foreign currency gains and losses on “exchange items”.  Generally speaking, these gains are taxed or losses are deductible, on an annual basis (and even if they are unrealized), except in the hands of non-trading trusts and natural persons.  A unit of (foreign) currency is an “exchange item” and thus, potentially, subject to these rules.  If, however, cryptocurrencies are not currency, these rules will not apply.

 

CAPITAL OR REVENUE NATURE OF GAINS UPON DISPOSAL OF CRYPTOCURRENCIES

SARS indicated that the normal tax rules apply to categorise cryptocurrencies as trading stock or capital assets.

Given the SARS preference to classify cryptocurrencies as intangible assets, and thus similar to shares in a company, a plethora of tax legislation may ensue to solve disputes about whether a cryptocurrency investment was held on capital or revenue account.

It will be recalled that the abundance of tax litigation on the topic of the capital or revenue nature of shares was one of the reasons for introducing safe haven rules in terms of which profits and gains resulting from a disposal of shares are generally classified as capital if the shares were held for three years or longer.

Cryptocurrency investments generally do not produce returns.  In that respect they are different to equity investments which normally produce (or at least hold the promise of) dividend income.  In many of the tax cases relating to the capital or revenue classification of proceeds on disposal of shares, the taxpayer argued that the shares were held on capital account on the basis that they formed the capital structure which produced income in the form of dividends (based on the tree and fruit scenario).  A taxpayer who invested in cryptocurrency may, as a result of the absence of returns, find it hard to demonstrate that cryptocurrency was held as part of its capital structure.

Having said that, there are numerous other criteria to take into account when determining the capital or revenue nature of an asset.  The mere absence of returns should not be conclusive.

IN SHORT

The crypto-phenomenon’s tentacles reach into many aspects of settled commercial and legal practice. Tax is no exception. Although SARS is correct that cryptocurrencies do not require a separate tax regime, the existing tax framework may need to incorporate cryptocurrencies in a more specific manner in order to avoid confusion and potential unfairness.

Doelie Lessing, tax director at Werksmans Attorneys

Article originally published on: https://accountingweekly.com/