Part Three
TOOLBOX
“EMPLOYEES ARE OUR MOST VALUABLE ASSET” (OR ARE THEY?)
Do you sometimes say, “Our people are our most valuable asset”? What exactly do you mean by that? Some big-company CEOs repeat that phrase as if it were a mantra but then cut expenses by letting people go. Can you imagine a company downsizing or laying off any other asset—just putting it out on the street in hopes that it will walk away?
From a commonsense perspective, employees are assets. Their knowledge and their work bring value to a company. When one company acquires another, the value of employees is recognized as part of the goodwill.
Otherwise, though, the value of employees doesn’t show up on the balance sheet. There are two reasons:
- Outside of an acquisition, ...
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