Leading the Way: Building a Strong Team through Employee Investment
In the world of accounting, employees are often seen as nothing more than a line item on a spreadsheet, a costly expense that needs to be reduced or eliminated. But this couldn’t be further from the truth. Employees are not just an expense, they are the lifeblood of any organization. They are the ones who drive innovation, increase productivity, and generate revenue. And yet, many managers and business leaders continue to view employees as nothing more than a cost to be minimized.
“Being an employee of several different companies, I can honestly say that I’ve felt like nothing more than a line item on a spreadsheet somewhere that an accountant is desperately trying to eliminate.” This comment, written by a reader, highlights the negative impact that treating employees as an expense can have on employee morale and motivation. When employees feel undervalued and unappreciated, they are less likely to be engaged and motivated, which ultimately leads to decreased productivity and revenue.
But great leaders see things differently. They understand that employees are an asset, not an expense. They recognize that employees are the ones who drive innovation, increase productivity, and generate revenue. They view their team as a valuable resource that needs to be led properly to maximize performance. They understand that their team will be at their best when they are loved, appreciated, respected, engaged, and acknowledged.
“Assets are company resources which have future economic value”
When employees are viewed as an asset, the way they are managed and treated changes.
As the late management expert Peter Drucker said, “The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution, whether business or non-business, will be its knowledge workers and their productivity.” It’s time for companies to realize that their employees are not just a cost to be minimized, but an invaluable asset to be nurtured and valued.
It is crucial for companies to adopt the perspective of viewing employees as assets rather than expenses. This viewpoint is backed by extensive research, statistics, and the successes of major companies across various industries. This shift in thinking is essential for long-term success and growth, as it allows companies to invest in and value their employees, leading to improved productivity, reduced turnover, increased engagement and satisfaction, and greater innovation and creativity.
According to a study by the Center for American Progress, the cost of replacing an employee can range from 90% to 200% of that employee’s annual salary. This includes the costs of recruiting, hiring, and training a replacement, as well as the loss of productivity and the negative impact on morale. On the other hand, engaged employees are found to be more productive and less likely to leave their jobs, as reported by Gallup. A separate study by the Human Capital Institute found that companies with high employee engagement outperform those with low engagement by 202%.
Investing in employee development and training, creating a fair and transparent compensation system, fostering a culture that values and recognizes employees’ contributions, and promoting employee engagement and well-being are some of the ways companies can invest in their employees and view them as an asset. Examples of companies that have adopted this approach include, Patagonia, Zappos, SAS, and Netflix. These companies have implemented a range of benefits, such as on-site childcare and fitness classes, as well as opportunities for employee development and skill-building.
As Google CEO Sundar Pichai has said, “Our people are our most important asset, and we strive to create an environment where they can thrive.” Patagonia CEO Rose Marcario similarly states, “We know that investing in our employees is investing in our business.” This kind of leadership and perspective is crucial for companies that want to succeed in the long term.
The pros of investing in employees are:
- Increased productivity and reduced turnover, which can lead to cost savings for the company
- Improved employee engagement and satisfaction, which can lead to a better work environment and improved customer service
- Increased innovation and creativity, as employees who feel valued and empowered, are more likely to come up with new ideas and solutions.
The cons of investing in employees are:
- Initial costs associated with training, development, and benefits
- The uncertainty that comes with investing in employees and not seeing immediate results.
- The risk of investing in employees who may leave the company in the future.
It’s important to note that viewing employees as assets rather than expenses does not mean that a company should not be a good steward of its resources. Companies still have a responsibility to be financially responsible and make smart business decisions. Investing in employees should be part of a larger strategy that balances the needs of the company and its employees. This includes making informed decisions on employee compensation, benefits, and development opportunities that are fair, reasonable, and align with the company’s financial goals. By taking a holistic approach, companies can create a win-win situation for both the company and its employees, leading to sustainable growth and success for both.
“If everyone is moving forward together, then success takes care of itself.” – Henry Ford
Examples of companies that invest in their employees and view them as an asset include:
- Google: Known for its generous employee benefits, Google offers its employees a range of perks such as free meals, on-site fitness classes, and a flexible work schedule. The company also invests heavily in employee development and training, with a dedicated team that focuses on career development and skill-building opportunities.
- Patagonia: Patagonia is a company that is well-known for its commitment to environmental and social responsibility. The company offers its employees a range of benefits that promote well-being, such as on-site yoga classes and a health center. Patagonia also encourages employees to take time off for volunteer work and offers paid sabbaticals.
- Zappos: This company is known for its unique company culture, which values employee empowerment and creativity. Employees are encouraged to take initiative and think outside the box, and the company offers a range of development and training opportunities. Zappos also offers a generous benefits package, including health and wellness programs, and a flexible work schedule.
- SAS: A global leader in analytics software, SAS is known for its commitment to employee well-being and engagement. The company offers its employees a range of benefits such as on-site childcare, health and wellness programs, and a flexible work schedule. SAS also has a dedicated team that focuses on employee development and skill-building opportunities.
- Netflix: The company is known for its unique culture, which values freedom and responsibility. Employees are given a high degree of autonomy and are encouraged to take initiative. The company also offers a range of benefits such as unlimited vacation time and a flexible work schedule. Netflix also focuses on employee development and has a dedicated team that focuses on career development and skill-building opportunities.
These are just a few examples of companies that invest in their employees and view them as an asset, but there are many more companies that have a similar approach. Companies that invest in their employees and view them as an asset will ultimately see a positive impact on the bottom line and a stronger and more productive workforce.
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