People Are Our Most Important Asset!

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About how often have you heard or said this sentence in the last 5 years? As a “reformed accountant,” this phrase embarrasses me more than any other commercial euphemism in use today. What exactly is an asset? The dictionary defines an asset as “an item of value that is owned”. From an accounting perspective, an asset can be a desk, a building, a computer, or a truck.

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Almost all assets have in common that they are depreciated or used up by the company until they are worthless. Then they are discarded. Now you can understand why that sentence makes me cringe. the “use and discard” rule. Land, stocks or even works of art are examples of assets that appreciate in value and are worth more over time than when you first bought them.

But is that how you treat your employees? Many companies today seem to be burning out employees. Employees are hired, commissioned, perform at their best for as long as possible and then, when they are no longer viable, are fired and replaced. Like a disposable item. Oddly enough, there really seems to me to be a correlation between how companies treat their teams and how they treat their employees.

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In good times, companies spend money on their equipment. You perform routine maintenance; they keep gear well oiled; Buy upgrades and add-ons; and they go to great lengths to ensure the equipment is in the best possible condition. Then the market conditions change and the company suddenly finds itself in more difficult times. What do you do? They try to control spending by reducing or eliminating any spending that doesn’t pay off immediately.

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Instead of performing preventive maintenance on your equipment every 30 days, it is extended to 90 days. Instead of updating computers with new add-ons, companies are trying to do without the upgrades. Instead of keeping the equipment well-oiled, they cut back on the staff doing the job just to save money. The result of these cost-cutting initiatives is also clear.

In the short term, costs are reduced and profits are preserved. But after a few months, the process of cost containment begins to show its true impact as equipment wears out, breaks down or is no longer able to do the job as it is now required. Similarly, we see the same pattern with employees. In good times, companies spend money to hire the right people through careful selection processes. They spend money to train employees in technical and soft skills to improve their performance. /p>

And they reward employee performance with pay increases and fringe benefits.