Bootstrap Leadership Blog

Does your company make the claim that “people are our most valuable asset”?  It’s pretty common these days for organizations to trot out that common phrase.  But how many really mean it, and does it make a difference if companies actually “walk the talk” on this mantra?

The 2010 Fortune “Most Admired Companies” list would seem to suggest that actually following through on this commitment pays big dividends.  The Hay Group (who helps Fortune create the list) found that industry leaders – those who emerged from the recession on top of their respective categories – differ from their peers in one important way: they actually believe this bit about employees being their most valuable asset.

The three most admired companies in each industry were less likely than others to have laid off workers in the last two years (only 10% did, vs. 23% for their peers).  They were also less likely to have frozen hiring or pay, and by a large margin (21 comparison points), they were more likely to have invested $ and effort in branding themselves as an employer of choice.  A spokesperson for the Hay Group said: “most admired companies display a greater long-term focus on employees than do their peers.”  

In other words, they “get” that employees are an asset, not an expense. For these companies, spending money on employees represents an investment.  After all, if you really believe in an asset, you’re more likely to continue investing, especially if you believe that the investment is earning more than the cost of the capital required.  If you see employees as an expense (like any other drag on the bottom line), then you’re likely to cut that expense as much as possible (especially in a recession).

So what did your company do during the recession?  How did they treat their “most valuable asset”?  If you work for a company that kept the focus on employee development, engagement and retention these last few years, then you work for a company that actually believes what it says about its talent.  And if your company didn’t live up to it’s proposed values?  Hmmm… maybe they need to think twice about claiming that people are the # 1 asset.  Because when they had a chance to prove it, they dropped the ball.  And that should tell you something about how serious they really are about their talent.