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Human Resources-Assets or Expenditures

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Human resources - Expenditures or Assets?

In my opinion employees are both expenditures and assets of a company, but it is recommended that they should be considered to be assets.

On the one hand, when we think of compensations and benefits, it can not be denied that employees are expenses to be managed. A company has to pay their employees certain amount of money so that they can use their labor. It is like the telephone bills, or electricity bills or office supplies that we have to settle. Besides salary or wages, they need to offer employees fringe benefits. There can be other expenses that they have to pay if they want to keep employees.

On the other hand, employees are assets for several reasons. First of all, they are tied to a company through a contract, and when the contract is signed they belong to the company and the company can use their resources. The company can own their contributions expressed through their knowledge, skills, experience, and relationships. Second, when one is employed he or she is used for certain purpose; he is assigned tasks, obey the boss. More importantly, "Assets" does not only mean "possession", it also implies the preservation and development. Any manager may want their assets to become more valuable, i.e. becoming more productive and profitable for the company.

If a manager treats employees as expenses only, he will try to keep cost low by many ways like offering lowstarting salaries, choosing not to fill empty positions, offering the bare minimum in training. This might work in the short term to improve profits, but over time expexts unhappy staff and thus the problem of high turnover. If he regards employees as assets to be cultivate and enhance, as opposed to expenses you need to reduce and minimize, they will be higly committed and deliver high-quality services and products, and then bring high profits to the company. When a company hope for better working efficiency and effectiveness they must satisfy the employees' need (see Maslow's needs theory) to keep them and motivate them (e.g. training higher skills, challenging and acknowledging…)

In conclusion, there is no wonder that "Your employees are your greatest assets" has been a management mantra in business for years. But mantras only works when you embrace them.…...

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