An employee is not an expense

A sixteen year old who does the same job as a thirty-five year old gets paid less. But if two people are doing the same job to the same level, why should the older person get paid more?

That’s always smelt like B.S. to me. But now, not only can I smell the shit, but I know where it’s coming from. Like many things, it’s a consequence of perspective. 

An owner or CEO, as most people recognise, sets the tone of an organisation. How she deals with customers affects how all the organisation deals with customers. What she tolerates influences what her managers tolerate and let be. And how she views and treats employees determines the methods with which her organisation hires, maintains, monitors and dismisses their staff. 

When it comes to her employees, the CEO has to make a decision. She has to choose between two approaches. She can see them as costs to be minimised, or as assets to be invested in. As consumers of the company’s cash flow, or as creators of value.

The executives and managers that see employees-as-costs pay them as little as possible. To them, staffing is a necessary evil of doing business. In their eyes, employees are just a tool used to ratchet up the revenue generated. So if they can pay a sixteen year old three pound an hour, they will. If they can skimp on training and learning expenses, they will. If they can hire an intern instead of an actual employee to do the same job, they won’t hesitate. They’ll pay minimum wage, they’ll give the smallest amount of holiday they legally can. They’ll prefer the non-commitment of a zero-hour contract to the certain expense of a salary. They’ll choose the cutting of costs over the happiness of their workers. 

The opposite perspective sees an employee as an actual person. The owner or CEO who sees employees as people, as assets, understands that they are not necessary evils, but the foundation of their business. And as a consequence of this realisation, they implement training programs. They give their people the opportunity to learn, grow, experiment and explore. They encourage feedback and they solicit regular contribution of ideas. They make their people comfortable and offer them security because they know that from this platform comes innovation. They have high expectations, distribute responsibility and trust their people to make the right decisions for the right reasons. And if an employee makes the wrong decision for the wrong reason, it is seen as a learning opportunity, not a chance to demonstrate the discipline you’re willing to hand out.

If I was an employee, I know which type of organisation I’d want to work for. And if I was heading up a company, I know what sort of company I’d want it to be. One which is value-focused, not cost-focused. One which see it’s people, not as expenses, but as the foundation on which everything is built.