What is an Employee?

An asset? No… assets are depreciated. They have a useful life and then are discarded. You know exactly how much value you will get out of an asset (at least in accounting terms). When was the last time you knew exactly what you were going to get out of a employee?

Capital? No… capital is exchanged. Capital is arbitraged. When was the last time you got a group of employees together and sold them to a competitor for a price? Or, better yet, when was the last time you saw the value of a knowledge worker listed on the balance sheet?

Investments? No, no, no… long story, but when you invest you make an explicit risk / reward calculation. When was the last time you heard a hiring manager say of a new hire “Well, they will probably really mess up the whole project, but if they get it right we are golden!” If employees were investments we would seek to reduce all possible risk for the return we get. Small problem: human beings tend not to do well when managed for risk. They like to be inspired for return. While it seems to be popular, I am not a fan of "employees are things" metaphors, and an investment is a "thing." 

Volunteers? Closer, but still no. In most organizations the expectations of volunteers is low. The expectations of employees is usually more than "try to show up when you can".

No… employees are investors. They provide you with something of value and you in turn give them a return. You want the good ones to give you more and the bad ones to give you less. As a manager you don’t want T. Boone Pickens investing, but you do want Warren Buffet.

I am struck by this, sitting here at SFO waiting for a plane that has been delayed three + hours, and reading the following article published by Tim Rutledge on HR.com (may require account) :

Managers overseeing the performance of others need to start thinking of themselves as investment managers. Few managers think of their employees as investments, but that's what they are, especially since employers will no longer have the luxury of treating employees like commodities or replaceable parts.

Language matters, and so we should probably not continue to explore metaphors that equate human beings to property. These metaphors are relics of when people were really property (slaves), virtually property (indentured servants), or just like property (kids working in the mills). Employees aren’t property (assets) or something you trade (capital). They aren’t even something you can own a piece of (investment). And you certainly expect more from them than a casual relationship. Employees are investors.

When I am talking to a future employee I ask myself “Do I want this person’s investment? Do I want them to have a say in how this place is going to be run? Will they make my business (and, by extension, my life) better?” And if the answer is “yes” then I ask them for their investment. I don’t talk about the great benefits program. I talk about risk / reward. I talk about return on investment. I talk about why they will get more out than they put in, and what they need to put in to get that out.

Once you see yourself as a stock broker – a person who connects investors with the right investments, who is an “honest” (hold your laughs) “broker” between the needs of a company for a particular kind of input and the needs of a future employee for a particular kind of return, then you see that recruiting may be the nexus of all that is important about the modern corporation.

Comments

[double dubs]

Jeff:

No… employees are investors. They provide you with something of value and you in turn give them a return.

You are much too optimistic. Employees are no more than people the company pays. It's possible there are classes of employees (contributors vs non) or types (talented, or not).

In return for a wage, employees are an input into the company's product. Some are better inputs than others - some are completely worthless. A recruiter is doing well of there are fewer of the latter, but the slackers will always exist.

I don't deny that some employees are investors. But like good talent, the investors are not abudnant. Perhaps I'm too pessimistic...

[Jeremy Langhans]

double dubs,

well put. i agree.

~jer
www.jeremylanghans.com

[Sean Rehder]

double dubs....

I agree with you on two points.

Yes, you are too pessimistic.

Yes, investors are not abundant. However, there are a lot more out there than you think.

Most them are "investors in waiting," they just need two things for them to start investing. "Clear direction" and "visible leadership" from their employer. That's it.

Just ask someone to name their favorite boss....and then ask them if they felt they had an "interest" or a "stake" in their job and their company's success.

[Jeremy Langhans]

i agree w/ sean:
Most them are "investors in waiting," they just need two things for them to start investing. "Clear direction" and "visible leadership" from their employer. That's it.

most them are "seeking" /shrug
~jer
www.jeremylanghans.com