James Pinchbeck, partner at Streets Chartered Accountants, unpacks the age-old term ‘our people are our greatest asset’.
How many times have you heard a business leader or company director say our people are our greatest asset? How often we do we take a step back and think what does this really mean? Is it marketing spin aimed at making the organisation look good or to attract new employees, or is there more behind the statement than we might think or are led to believe?
Certainly, from a financial reporting perspective people cannot really be an asset, as they are not owned by anyone or anything, nor can they be affixed a monetary value, salary aside, or used as collateral for investment or borrowings. Well at least certainly not in the 21st century. They don’t appear on the business balance sheet and certainly they are not subject to depreciation, written off over time, nor are they from time to time revalued.
It would probably be fair to say that whilst you may have many highly appreciated and ‘valued’ staff, not all staff might be deemed to be an asset. In fact, some might be deemed, due to perhaps poor performance, or other less favourable behaviours, to be more of a liability than an asset.
Given this background, how might our people be a real benefit and ‘asset’ to our organisation? What might they do to demonstrate the valuable contribution they make to the success and standing of the business?
We take on staff to help to deliver the business strategy, to produce goods and services and to meet the demands of the organisation’s operation. However, the true value of our employees is in much more than this. Whilst most if not all staff will undertake, with the appropriate training and guidance, the task or role they have been employed to do, the additional value is around much more.
In particular, well engaged employees who buy into or feel truly a part of the business and what it stands for are often great ambassadors and advocates, whether it is with existing customers, potential customers, potential employees or other stakeholders. They often help to contribute to improved productivity, even profitability.
In times of adversity, as we saw in the pandemic, valued and well engaged employees often demonstrate true grit and resilience going the extra mile to support the business. There is a true sense of commitment, often with a desire not to let people down with occasions when people will do more off their own back.
Rather than perhaps moan or complain about issues affecting the organisation, valued staff will tend to look to address them, showing initiative around problem solving as opposed to leaving it to others or doing nothing.
Well valued staff or people you might class as an asset often demonstrate more in terms of leadership, often going above and beyond the management of a task or team and looking to enhance the performance of the same.
Perhaps not surprising is the fact that employees who feel a real part of the organisation and its sense of purpose are less likely to seek alternative employment and as such help to improve retention and reduce the burden of recruitment – a situation highly relevant at the moment when most if not all organisations face challenges recruiting.
Whilst we can start to appreciate more about how staff could be an asset, even perhaps our greatest asset, there still is a real challenge around how businesses determine or define this, as well as how they might measure it. It seems that there is also work to be done to ensure the term ‘our people are our greatest asset’ is not such a cliché or passing comment or hollow rhetoric on a company’s website, social media and other marketing material. Such work probably starts with leadership and Board, certainly employees, potential staff and wider stakeholders are and will be challenging unsubstantiated statements and looking at how staff really are valued and recognised.
