Financiers consider employees as expenses and not investments. Many managers prefer to invest in machines or IT systems rather than people.
But it's a mistake. A financial mistake. A managerial mistake.
One of the most famous economists said it : “I am worried about our tendency to over invest in things and under invest in people”. John Kenneth Galbraith
Several studies show this:
The fear of investing in your employees is often the fear of seeing them leave and losing your investment.
This can be illustrated by this joke:
Contrary to common believe or fear, the figures show that the investment period is about the same:
The actual lifetime of the equipment may be longer than the depreciation period. But that of employees is certainly also more so than this "statistical" duration. Indeed, this is only an average, and if we took the duration of jobs for which there is investment in people, it would be longer.
As Richard Branson said: “Train people well enough so they can leave, treat them well enough so they don’t want to”
Employees are sometimes absent for medical or other reasons; somehow they "break down". But they come back alone... and very often the cost of the absence is covered by social security or a mutual insurance company.
Machines fail, and more frequently than employees. And we need maintenance teams to get them back to work.
Artificial intelligence may allow adaptive and evolving information systems; but not now. And this will not be true for most other equipment.
Employees are able to adapt, change jobs, and sometimes evolve radically.
It is the employees who make your competitive advantage, not machines.
It is the employees who develop, invent and reinvent your company, not machines.
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Thanks for this article.