Outsourcing the Training Function

Why Outsource Training?
by Shum YL 12 April 2007
 

The speed of which the internet is imposing itself on activities in this planet is nothing if not amazing. More and more activities are now done online. For example; banking, shopping, government transactions , education etc. It is of no surprise then that professional associations and institutions have started outsourcing their training activities to 3rd parties who specializes in such services.

What are the advantages of outsourcing?  Well, for one, the exercise can be quite rewarding for the association/institute as such activities will general income without the necessity of investing in manpower and facilities. For example, the The Institute of Financial Consultants outsource its training to two entities called Widelearning™.com and PASSOnline. refer to  http://www.ifconsultants.org/page5.htm.

Having qualifying training and continuous professional education schemes within the association/institution enhances the credibility of the institute and its members. This will demonstrate to the general public that the association/institute is strict in its admission standard whereby only persons who pass their training courses will be accepted. Such training can be both classroom based or distance learning/online based.

© 2007 Shum Ying Loon. All Rights Reserved

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The author is the principal consultant of DRC Services which offers management consultancy , educational services and training. Mr. Shum has many years of senior experiences in financial management and business planning. He has held positions such as director, financial controller, group finance manager and regional business planning manager for multinationals and listed companies. Mr. Shum can be contacted at shumyl@drcservices.biz

What to do during Interviews

What to do during interviews
By Shum YL , March 2006

 Perhaps the most important function of managers is to manage people or human resources. Human resources management is not the primary function of HR Managers but all managers. Although called “Human Resources Managers”, such positions normally only  provide the technical expertise in hiring, training and disciplining of human resources. The job of managing human resources are mainly in the hands of line managers and middle managers. This is especially true when hiring new staff.

 Recruitment is an important managerial task because managers usually have to live with the results for a considerable time[1]. It is therefore imperative that managers hone their interviewing and selecting skills to the best they can as the task can really seldom be delegated. From my experience it is necessary to prepare before any interview and I normally take around 10 minutes or so to research the candidates resume and background. For senior positions you probably can “google” his or her background online as well. Here are some issues in staff hiring and selection for those who want to select good staff.

a)       First of all, managers must ask themselves if the new hire is really necessary. Often when a staff resigns the first thing the manager does is to submit a request for hire form to the personnel manager immediately without looking whether the staff’s tasks can be shared among other staff. For example, when we start a company there are usually a lot of work to be done in the set up phase and the number of staff is normally not enough. However, after the setup stage staff generally have it easy as the number of tasks dwindles down. In this scenario, the most like action if a staff leaves is to redistribute the tasks to other staff or just outsource some of it.

b)      It is imperative for the manager to read through the resume and cover letter of the applicant first before the interview. This will ensure that the manager is familiar with the candidate and does not ask questions which answers are already in the resume. This can also be a form of prescreening the applicants. There is no point in interviewing someone, if it can be read through the resume that the applicant is not qualified for the job.

c)       During the interview the manager must be in control of the process while making sure that he or she is not hindering or intimidating applicants from presenting themselves as much as possible. The keyword here is “guiding”. Interviewers must learn how to guide the applicants during interviews so that they can extract useful information from the applicants. For example, do not keep asking questions that requires just yes no answers.  The interview is not a court session nor an police interrogation session.

d)      Some form of screening before the actual interview is recommended. For example, applicants for a typist position may be tested on their typing speed first before they are  selected for interviews. It may be also in the form of a personality test for applicants appluing for senior positions in order for judge their compatibility with the job and the corporate culture in general.

e)      The manager should refrain from bringing in his or her personal biases to the interview. This will allow the selection to be fair and just.

f)        If there are no candidates who fit the bill, do not make the mistake of choosing the best available. Hiring is a long term commitment on the part of the manager and should be done properly and not in a haste to met short term datelines.

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[1] Ernest & Young, The Manager’s Handbook(revised edition), London, Warner Books, 1994

The author is the business consultant of DRC Services which specializes in management consultancy and training. Mr. Shum has many years of senior management experiences  in various functional areas.  Mr. Shum can be contacted at shumyl@servicescape.net  for assignments on project basis in the field of  human resources management and Business management

Business Planning for Success

Business Planning

By Shum YL

Business planning is many things to various people and although elements of business planning appears in most management literature it has rarely been accorded the status of a stand alone management field.

Some of the reasons why people do business planning:-

1. Trying to get a bank loan to start a business or a project
2. Trying to impress an investor
3. Preparation for listing the company in the stock market.
4. Planning for the budgets of the next financial year
5. Taking stock of the company's financial and feasibility status
6. Strategic planning for the future

A company can actually do business planning for more than one of the reasons above over a period of time. However, the process is more or less the same which requires the following steps.

Below is the my own Business Planning process:-
-Setting broad missions or goals
-Analyzing information
-Setting objectives and targets
-Deciding on strategies
-Commandeering resources
-Implementing the strategies
-Reporting
-Monitoring the progress
-Take corrective actions

While the above is a bit more harder to remember than the often used "PDCA" cycle used in taking action or solving problems it provides a better understanding of what real businesses do. We postulate the above process in order to ensure that no issues are left out in the process and makes the plans awry. For example; in our model the act of reporting is included. Although it make sense and is commonsensical most models in planning ignores this with the result that most companies fail to emphasize in management accounting.

It is sad to see that a lot of companies pay top money to hire accountants who are actually not contributing any effort to improving business decisions but just to produce reports to adhere to accounting regulations and tax requirements.

The author is the business consultant of DRC Services which specializes in management consultancy and training. Mr. Shum has many years of senior experiences in financial management and business planning. He has held positions such as director, financial controller, group finance manager and regional business planning manager for multinationals and listed companies. Mr. Shum can be contacted at shumyingloon@gmail.com for assignments on project basis in the field of business planning.

The article above is an independent work submitted by the above author and does not reflect or represent views of the management, owners and agents of this website.

© 2001 Shum Ying Loon. All Rights Reserved Updated 03/09/01 By Clicking on any hyperlinks on this page you hereby agree by our terms and conditions of using this website. Disclaimer: While every effort is made to provide accurate and timely information in this website may contain errors or omission or factual error The owners does not warrant any information in this website and therefore cannot be liable for any claims or losses by users on this site. The owners also does not have control of any materials and information found in sites linked to this website and cannot be liable or any loss or claim resulting in the use of information and materials used in linked sites. Please consult your lawyer, broker, accountant or financial consultants before making any investment or financial decisions.

Financial Planning for Personal Investments

Financial Planning is one of the building block to “investment”. No matter what we invest in, it is important that we manage our financial position properly first. Proper management allows us to do the following;

-Accumulating a war chest for investment
-Reduces the cost of investments
-Enhances our risk profile

In order to manage our finances, what we need is a financial plan. In general usage, a financial plan can be a budget, a plan for spending and saving future income. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan can also be an investment plan, which allocates savings to various assets or projects expected to produce future income, such as a new business or product line, shares in an existing business, or real estate.

This blog will not be a full fledge financial planning or management guide and we will not cover the various investment techniques and methods of valuation. It is sufficient at the moment to highlight to the reader, what needs to be done rather than how it is done and what are the issues that should be understood in financial planning or investment planning.

What is financial planning?

Essentially, a financial plan offers us a road plan that can be useful for us to navigate our financial journey and to certain extend our life with greater peace of mind. A good financial plan has the following elements

-A set of financial goals and objectives
-A current net worth report
-A personal risk profile
-And an investment plan

Before you embark on doing a financial plan make sure you are aware of all your current financial details and make a list of all possible expenses and income that you may have. For expenses, it is helpful if you can classify them into what is “nice to have” and what are necessities. You may also get a good book on local taxation requirements and practice or get professional tax advice on possible taxation issues.

Who can help you with financial planning?

Most insurance agents and unit trust consultants can help you in your quest to do a financial plan. However, local legislation only allows certain qualified professionals to give professional advise on financial planning, do a financial plan for the client and charge a fee for the service. Two qualifications are current approved for this purpose are the RFP qualification from the Malaysia Financial Planning council and the CFP® qualification from the Financial Planning Standards Board via Financial Planning Association of Malaysia. If you are not based in Malaysia find out from local authorities about the availability of licensed financial planners in the local market. Here are some of the qualifications that are involved in financial planning.

1. Certified Financial Planner®/Malaysia/ Financial Planning Association of Malaysia /www.fpam.org.my

2. Certified Financial Planner®/Singapore/Financial Planning Association of Singapore/ http://www.fpas.org.sg/

3.Certified Financial Planner®/Australia /Financial Planning Association Australia /http://www.fpa.asn.au/

4.Certified Financial Planner®/ United States /Financial Planning Association / http://www.fpanet.org/

5.Registered Financial Planner / Malaysia /Malaysian Financial Planning Council / http://www.mfpc.org.my/

6.Chartered Financial Consultant / Malaysia / Malaysian Association Of Chartered Financial Consultants / http://www.machfc.org/

7.Registered Financial Planner /United States / Institute of Advanced Financial Planners /http://www.iafp.ca

8.Certified Financial Planner® /UK / Institute of Financial Planning / http://www.financialplanning.org.uk/

9.Certified Financial Planner®/ Canada /Financial Planning Standards Council / http://www.cfp-ca.org/

Net Worth

For an individual, the net worth is the value of a person's assets, including cash, minus all liabilities. The amount by which the individual's assets exceed their liabilities is considered the net worth of that person. The net worth statement is then a report of an individual’s financial standing or position. This is similar to the balance sheet of a company.

In order to do financial planning for oneself, the person my have some idea of what his financial position is. This include things like balances in bank accounts, pension funds (Ie; EPF balances) , investments etc. Follow the link below to see a life example of how to calculate your net worth. http://www.fincalc.com/bud_07.asp

What is your risk profile?
“Managing risk is a combination of art and science that incorporates a number of basic characteristics. It involves continually searching out and understanding risk, measuring and managing them.”[1]
We cannot avoid risk. However, we can face it head on and manage it so that it does not affect us too much. We must constantly look for risk, understand it and find ways to circumvent it or manage it effectively. Even, putting money in fixed deposits have certain risk involve. There is the risk of the return from FD not been able to overcome inflation which effectively devalues the investment.

We must also assess our risk tolerance. How much risk can we take? Basically, there are 3 types of risk profile;
-Risk indifferent people
-Risk Averse people
-Risk seekers

However, our risk profile depends a lot which stage we are in our life cycle. Older people will most likely to be risk averse because they cannot afford to loose all their money in investments as they will not have the means or time to earn it back. Lastly, when it comes to managing risk we need to exercise caution , be disciplined and proactive. The need to be proactive is vital because if we get it wrong the impact can be quite big, financially and often irreversible. Like the saying goes, there’s no crying over spilt milk.

Some issues to know in financial planning
As mentioned earlier, this article is not meant to be a comprehensive guide on investment and if you are interested in one you can refer to some of the literature listed at the reference section at the end of this article. Here we would like to highlight some salient points in financial planning which we think could be useful in your understanding of financial planning and investment so that maybe you might be able to enjoy another passive source of income.

Goal Setting- Set realistic, challenging and achievable goals. Do not set out to be a Warren Buffet or Bill Gates. You will be very disappointed later. For one, these guys have a totally different financial and risk profile than your own profile. Chase your own dreams not others.

Know what you want – Set out in general terms what you would like to achieve in managing your finances. Some of us are more concerned about retirement planning while others may be planning for their children education.

Set Priorities – This point can never be mentioned enough. Do what is important and urgent and not what catches your fancies. For example; many give precedence to their child education than their own retirement planning just to keep up with the “Jones”. In this case, the correct priority is to ensure that you plan for retirement planning first because it is 100% sure that you will retire and it is 100% sure that you will need the income from investments after your retire. Education needs are more flexible and in some cases are not very crucial anyway. For example; the child may get a scholarship, mike prefer apprenticeship rather than going to college or may not event want to do a post secondary education at all.

Explore your tax positions – You need to determine your tax positions so that you can take advantage of any tax breaks or tax treatment methods to reduce your tax liabilities. For example, having investment income in a private limited company may have different tax implications than investing under your own name. Consult a tax consultant or your financial planner to ensure you are ware of the opportunities and threats which exist in your tax situation.

Set your planning time frame properly – In doing your financial plan, you will need to ensure that the time frame you use is correct and accurate. If you do it wrongly, you might be way short of achieving your targets. For example, if you are investing in unit trust, ensure you factor in the distribution charge and management fee over the entire period of investment.
Read the prospectus (or terms and conditions)- In what ever you invest in, the prospectus is a very important document as it sets out the fund's goals, investment strategies and policies and the risk-reward position it takes. It may be hard reading being full of legalese, but you must go through the fine print to ascertain that your goals and expectations match that of the fund. The financial accounts will show if the fund is sticking to its game plan and how well it is performing within the plan.

Seek professional advice – Do not be under the illusion that you can do it alone. Even professionals in the financial planning line cannot be expected to be master of everything financial. They would still need to consult tax experts, accountants, stock brokers for specific information.

Where to invest?
Once we are done with financial planning and management and are able to set aside some extra cash then we can start looking into the type of investments available to us. We will cover these possible passive income streams in the next few lessons but we would like to end this article with a list of possible investments vehicles that you can consider.
a.Stocks/shares
b.Mutual funds or unit trust
c.Real Estate Investments Trust
d.Money market instruments
eForeign exchange deposits
f.Fixed Deposits
g.Collectables and precious metals
h.Commodities
i.Derivatives
j.Bonds and debentures
k.Real Estate properties

Footnotes:
[1] Quoted by Grace Kang CFP® in her article “Managing Risk” appearing in the 4E journal published by the Financial Planning Association of Malaysia., Vol.4 No. 1 March 2004.

References:

1.Maximize what you got…No Matter How Much You Have Now, Yap Ming Hui, Whitman Independent Advisors, Selangor, Malaysia, 2006
2.Personal Money, Issue #55 March, 2006 The Edge Communications Sdn. Bhd.
3.Financial Freedom 2, Through Malaysia Equities and Unit Trusts, Cheah, Wong et al, Kuala Lumpur Mutual Fund Berhad, Kuala Lumpur, Malaysia, 2000
4.Malaysian Master Tax Guide 2006, 23rd Ed., Veerinderjeet Singh,Dr & Teo Boon Kee, CCH Tax Editors, CCH Asia, 2006
5.Managing Risk, 4E Journal Vol 4 No.1, Financial Planning Association of Malaysia, 2004
6.Securities Commission Website http://www.sc.com.my/
7.Wikipedia http://www/.wikipedia.org