How often have we heard the cliché, “our people are our most valuable asset”? Of course, those of us who have been studying the knowledge economy have known that for a long time. But too often, we see company executives mouthing the phrase without any real understanding. For them, what they mean is “our highly paid workers, like me, are our most valuable assets.” Hence the rationale for CEO compensation scheme, bidding wars for “talent” and “key individual” insurance policies.
A new report should help break that mindset — Profit at the Bottom of the Ladder: A Summary Report on the Experiences of Companies that Improve Conditions at the Base. The report outlines a number of steps companies can take to increase profitability by investing in line workers. That includes increased attention to workers’ health, training, incentives, and engagement. As the report notes, companies need to better understand who is actually performing the work and realize that these workers are key to both the ongoing success of the company and future productivity and efficiency.
One of their conclusion is something I have been advocating for years:
As practices on Wall Street and in firms are being rethought, along with the role of the public sector in rendering the investment process more transparent, one of the areas needing a new approach is the evaluation of and reporting on long term investments in employees. (Emphasis in original).
For a summary of the research, see this recent piece in the New York Times Economix blog — Finding Profit From Investing in Workers.