Posted: June 04, 2019 by
Workforce Retention and Attraction
Are employees expenses, assets, investments or investors?
Many, many times over the years we’ve heard executives say “Our employees are our biggest assets.” A whole lot of that is sound bite, lip service. In a recent seminar I heard the instructor say employees should be regarded as assets not expenses. However, most employers treat their employees as expenses. Often we hear about the “cost” of hiring.
There are articles that explain the accounting terms of tangible and intangible assets and say that employees can’t be assets because they aren’t owned. Assets, like a building, can’t leave a company but an employee can. Other companies don’t try to steal buildings but do try and recruit employees from other companies.
Michael Leimbach, in an article for Chief Learning Officer, wrote:
“Prior to the 20th century, workers were largely regarded as disposable commodities. They were little more than the other materials that went into making the final product. If one quit — or, more likely, died — they were easily replaced. But with complex machines and highly coordinated assembly lines, organizations recognized the need for uniquely trained workers. One was not so easily exchanged for another.
Treating employees as assets and maintaining or increasing their value with learning and development made sense in the 20th century. The employee as asset model worked because, like machines, people did not leave organizations. Employees often stayed with a single company most of their work career.”
We talk about employees as “talent” and “knowledge workers” these days. Many observers now are calling employees investors. Why? Because today’s employee invests their time, energy and talent when they choose to be employed by a company. They can also choose to make their investment with a different company if they feel they are not getting a good return from their investment. This could mean salary, benefits, company culture, appreciation, etc.
If companies recognized that employees are potential investors, they would recruit employees differently.
Kevin Wheeler, in an article for ERE Recruiting Intelligence, wrote:
“Most companies spend time and executive-level attention courting investors, speaking to investor clubs, writing letters and articles in publications aimed at prospective investors, and so on. Do they expend the same energy for recruiting top-notch employees?”
Employees, as investors, need to know exactly what is expected of them, to be given the tools to grow and succeed and feel they are appreciated and valued. This “return on investment” often comes down to company culture. Most companies think they have a company culture, but they don’t. If a company cannot define their culture and communicate it both verbally and in writing, they don’t really have a culture.
We hear of companies that have unusual arrangements. A local tech firm has unlimited time off. Most companies would go into a tailspin over this idea. Most companies are in status quo mode and treat employees the same way.
Business News Daily cites the following example:
“At Netflix's California headquarters, vacation days and work hours aren't tracked. The company only measures what people get done, so if employees do their work, it doesn't matter when or for how long they're in the office. The company encourages employees of all levels to take time off, including new parents, who it claims often take four to eight months off. However, that vacation time might not be completely off the clock. "We intermix work and personal time quite a bit, doing email at odd hours, taking off weekday afternoons for kids' games, etc.," says Netflix's "Culture" description.”
Companies today are talking about needing talent. I mentioned talent wars in a past blog. There is a lot of competition for talent and there are organized talent recruiting strategies being used by companies and economic development organizations.
I believe that employers and employees are investors. Companies should look at potential employees as investors and recruit them accordingly. But, these same companies should treat them as valuable investors once they become employees. Why put in all that effort at recruiting just to lose them because you don’t have a company culture that fosters retention?