Employee: An Assets or Liability

(Employees come first for Sir Richard Branson, 2018)

In the past human resource managers considered the headcount of the employees in the payroll and thought them as a liability because of wages and other benefits draining a large portion from the balance sheet.

Does the thinking has changed over time?

Is employees are still considered as an expense?

Organizational competitiveness determined by the resources its own at a given time. Resources can be tangible or intangible assets. Examples of resources are brand names, in house technology, skilled laborers, trade contracts, capital, etc. Further, anything that generates cash flow can be considered as an asset while liability can be defined as something that has a negative effect, (Richardson & Osborne, 2007). 

Now employees are considered as a strategic resource by firms, (Mehra, Maheshwari & Meena, 2014). In one hand employees are directly responsible for generating revenue and on the other hand skills of the employee drives the innovation which is the cornerstone of the competitiveness. 

Further, in competitive markets, customer satisfaction is vital for success and customer value position also plays a key role in generating revenue. Customers look for brand, quality, cost and better services when choosing a product or service. Satisfied customers drive the business and generate much-needed revenue.  Usually, employees, the internal customers, of a business directly interact with the customers. Quality and the success of this interaction determines the future course of actions by the customers. It is the happy, and motivated employee with the necessary skills do better in this interaction.

HRM implications

To harness the best results, employees need to understand the goals of the business as well as the expectations of the customers. The special focus shall be given to below-mentioned areas, 

1. Development of shared vision and Aligning of employees with organization strategic goals
2. Training and development of employees skills
3. Provision of necessary motivation
4. Employee retention, although it is possible to replace a person physically, the skill sets, knowledge and experience of each worker different.
5. Arrangements of flexible work environment 

Today’s dynamic business environment poses major challenges for competitiveness. An organization that nurtures and harnesses the talent of its internal customers, the employees, has a competitive edge.  In a nutshell, if the employees are looked after they will, in turn, provide a better service to the customers.

References 

1. Employees come first for Sir Richard Branson, 2018 (video file), available from < https://www.youtube.com/watch?v=9o3LQtvBqYc>, [20 May 2019]
2.  Mehra R., Maheshwari M., Meena K.K., 2014. Valuation of Human Assets and Its Proposed Position in the Balance Sheet. International Journal of Engineering Development and Research, 2(3), p. 3239.
3. Richardson F. & Osborne D., 2007. Support staff — Asset or liability?. The Canadian Veterinary Journal, 48(1), p. 21.