Employees: Your Greatest Asset
A dive into why many businesses are missing out capitalising on the most profitable asset they have.
When one thinks of a company’s assets they may imagine, their product, any proprietary software, or any owned real estate listings. There is another that is often overlooked, The Employees. They are a business’s greatest asset, they make everything happen. The entire reason a business hires an employee is to complete a task that they either don’t have time for or can’t complete themselves. In that alone, they are your greatest asset.
Unfortunately, this seemingly glaring subject is often overlooked by businesses in current times. So often when it comes time to pay salaries it is often seen as a loss that the business suffers. More often than not many businesses will do whatever they can to pay their workers the bare minimum and push for extraordinary work. This then leads to overwork of employees, and a crash in quality and productivity. The logic behind this way of operating isn’t there, you can’t put cheap petrol and subpar oil in your car and expect it to drive at its peak performance, you can’t eat fast food every day then run a marathon. The same goes for your employees, they have to be nurtured and praised to give you the best work. Investing more money and time into your employees is investing in your company, that’s business 101 “invest in what you’re building”.
There are numerous case studies that show when a workforce is paid well and treated well the work completed is to a higher standard more efficiently. The logic behind this is simple, if you enjoy going to work and doing your job you’ll have far more motivation to do your best work.
E.g. If you enjoy playing Soccer you’ll make a greater effort in training and therefore will be able to play at a higher standard in games.
The same goes for your employment. If you find enjoyment in your work you’ll work harder and be able to work longer without burning out.
Google is the most well-known example of understanding the value of it’s employees. They transformed the culture of their workplace, overhauled how their employees broke up their time and changed how the move to management positions is decided. David A Garvin wrote an in-depth article back in 2013 about how these changes were implemented.
In a study conducted by Harvard University, researchers Natalia Emanuel and Emma Harrington found that workers respond positively to higher wages. They based their study on a Fortune 500 retailer. They discovered that both customer service representatives and warehouse workers have a positive response to higher wages. This affects recruitment, and turnover, as well as “on-the-job productivity”. They estimate that 80% of the improvement found is in response to higher wages for workers.
The Japanese company Tange Shift Inc, the highest performing stock in the country found the secret to success was that it acquired smaller companies and then boost employee pay to incentivise good work. They found that in the end, this was more cost-effective than going through middlemen to solve niche problems. The profitable side effect of this is that in increasing these wages for their workers they were also able to benefit from the increased performance of these new companies and their products.
These examples are just some of the cases of a revolution in how employees are perceived. The thinking has to stop being that paying wages is somehow a loss for the business and instead is an investment towards future growth. If an employee is able to enjoy coming to work and feels rewarded for what they are doing then they are just more likely to work harder and create clever workarounds to increase efficiency and overall product quality. This in turn would logically lead to higher overall profits.
Your employees are the cogs in the machine, without them nothing would turn and nothing would be produced. The best way management can supercharge their workforce and enhance the quality of the final product is to first treat their employees as the assets they are. More and more businesses are coming to terms with this fact and are changing how things are done, the last thing you want is to be behind the curve.
Your changes don’t need to be as drastic or as revolutionary as Google’s, but some change in the right direction is still change. No matter how small.