Companies often say that people are their most important asset. I have always found this term disingenuous and when I hear it I feel that we are all being disrespected. Am I making too much out of a word? I don’t believe so. Words are powerful and convey hidden meanings and create behaviors, sometimes ones we don’t wish to convey.
The dictionary defines assets as resources owned or controlled by a business. Usually, assets are considered to be physical objects or financial assets. They can be sold, rented, depreciated, or discarded. I don’t put people in this category. But we often, inadvertently, impersonalize our candidates and employees and treat them as anonymous, impersonal objects.
When we think of employees as assets – as things we control and dispose of as we see fit - behaviors emerge that create many of the loyalty and engagement issues employers have. When we care more about stockholders than employees, we are disrespecting them. When we care more about our quarterly profits than employees, we are disrespecting them. When we treat candidates impersonally and often dismiss them perfunctorily, we are disrespecting them.
We should think of employees as the most important investors in our organizations. They have freely chosen to share their expertise and skills with us expecting a return on their investment. We should think of candidates as those deciding whether or not to invest in us.
The return on an employee’s investment may be a paycheck, security, meaningful work, relationships, or a combination of these. Each employee has a built-in return on investment meter that is constantly sampling the atmosphere and deciding if she is gaining or losing from a continuing association with the firm. As long as the employee feels that they are gaining, they don’t look for different jobs and they remain engaged. But whenever the balance shifts even slightly, employees become vulnerable to any offer that may present itself. That is why having firms and managers with a history of employee loyalty and low turnover are so desired by job seekers.
When an employee seeks a different position inside the firm, they are looking for a challenge, aren’t happy with their current assignment or boss, or feel that the new position will a better return on their investment. To deny them the opportunity and place an HR policy, for example, in their way is a sure way to lose them. Happy employees who are being treated as investors will be unlikely to leave.
Candidates, too, make decisions and judgments about your firm and the position based on how they are treated. Respected candidates are more likely to join and more likely to refer people to you.
From Asset to Investor
A good example of a company with an investor mentality, even though very unconventional and controversial, is Lincoln Electric.
Located in the American Midwest it has become well known over the years for its lack of “normal” benefits for workers. Lincoln Electric has been in business for more than 50 years yet offers no employee benefits. Employees are not paid sick time or vacation time but choose to work when they wish to. Employees are paid for their output, by the piece, for the work they do. They earn as much or as little as they want by choosing their own working hours. On-the-job training is done on their own unpaid time, but the more skills they have, the more they can earn. Average salaries are higher than comparable jobs at other firms. Only senior-level employees are paid a salary.
Each employee votes on how any profits are distributed. Turnover rate? Virtually zero. Absenteeism? Almost none. Recruiting issues? Standing room only. How does a company with almost no benefits and few amenities get such dedicated employees and excited candidates? Simple. The employees get a clearly understood fair return on their personal investment of time and energy. Their raises don’t come from who likes them but from their performance. It is a simple system, but one that works very well and shows the power of being treated as an investor.
By shifting thinking from asset to investor, new opportunities emerge. Now employee development, apprenticeships, rotations, and internal mobility begin to make good sense. Engagement happens because people are respected and are doing work they consider to be meaningful and fulfilling.
Changing Mindset About Work
Investors are not controlled but exercise their own judgment. Employees treated as investors develop their own flexible working schedules and are empowered to choose projects to work on. Given the newer generation of workers, nothing is more disempowering than being assigned to work without consultation.
The gig workforce, now becoming a core part of the workforce ecosystem, is also not likely to accept work contracts without input into the work requirements or content. Work needs to have clear outputs and end goals. The workers should be empowered to determine how best to achieve them.
The Pandemic has done more to accelerate leadership changes than all the classes and change management programs of the past decade. To position people as investors requires leaders to focus on understanding what motivates and engages them. It enlarges the picture to include the contingent workforce and the permanent as they become key contributors to the success of projects and the organization. Team leadership becomes mainstream as opposed to managing individuals.
When you recruit an investor, you take a different perspective than when you “purchase” an asset. Companies spend time and executive-level attention courting investors, speaking to investor clubs, writing letters and articles in publications aimed at prospective investors, and building their brand. Recruiters need to do the same. They need to treat candidates as investors by providing a personalized and candid experience. They should focus most of their time and energy on communicating with the talent market, not just those that apply. There should be focused outreach, press releases, videos, and whatever other media makes sense to reach as large an audience as they can to show how employees are treated and what it is like to work in their organization.
The simple act of starting to think of candidates and employees as investors will go far in creating a positive candidate experience as well as engaged employees.
Why Upgrade Your Subscription?
We are working on several white papers, introductions to hot emerging products, book reviews, video interviews with cool people, and podcasts.
Please consider upgrading to a paid subscription or recommend this blog to your friends. By doing so, you help me make these possible.
The subscription is only $5 per month or $30 for a full year (only $2.50 per month). Thanks.