Wednesday, January 31, 2018

Employees—Assets or Expenses?

Expense. A cost or charge.
Asset. A useful or valuable item/person that one owns.

If you have not already, you need to stop and examine how you perceive the employees at your company. The way you see your employees affects your employee engagement.


What do you do with expenses in your company? You look for ways to reduce them. When you consider your employees an expense, which they are of course, you strive to have the least amount of employees needed to do the greatest amount of work possible. It may sound a little heartless to consider an employee an expense but when it comes down to it, technically, they are.

As a common rule, a healthy company should spend less than a third of its gross income to pay its employees. This is why, if a company doesn't bring in as much income as it was hoping, it typically has layoffs. With layoffs come lower morale, talent loss, and lost productivity. While layoffs aren't the only way to deal with a overextended budget, frequently that is what's used.


The skills and intellectual abilities your employees possess is something you cannot own. Additionally, since these items are intangible, you cannot assign an exact value to them. For these reasons, employees are not true assets.

However intangible, your employees still possess value. Through their ingenuity, they can solve problems, increase efficiency and skyrocket sales. Additionally, the longer an employee is with your company, the more company knowledge they possess. As they complete tasks and overcome problems, they strengthen and hone their skills. So, if you consider an asset something or someone that appreciates over time, then an employee is definitely an asset.

Treating employees as assets

Treating employees as assets can pay dividends to you in the future and need not incur expense. Here are some ways you can show your employees that you value them as assets to your company.

  • Take time to get to know your employees and their teams
  • Reward the sharing of company knowledge
  • Increase your communication
  • Provide added reassurance during times of change and transition
  • Encourage feedback from all levels of your company on how you can improve your service
  • Listen to the feedback you receive
  • Make commitments and keep them
  • Invite everyone to increase their quality of work
  • Support the initiatives your employees are working on
  • Improve your training programs
  • Teach your managers how to provide feedforward
  • Encourage creativity

What do you think?

Are employees expenses or assets? How has treating them one way or the other affected your company? Share your thoughts in the comments below.

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