If I had a dollar for every time I heard an executive say that employees are the greatest asset, we’d all be millionaires. However, this rhetoric is often considered just that—rhetoric. Can employees truly be the greatest asset of a company? In this article, we’ll explore how companies perceive their employees and the impact employees have on business success.
1. The Value of Employees: Mere Words or Truth?
Many executives claim in earnings calls that employees are their greatest asset. Yet, in reality, they mention customers far more frequently. For instance, an analysis of earnings calls from American companies revealed that executives mention customers 6 to 10 times more often than employees. This is because customers are seen as the immediate source of revenue and profit.
However, for a company to succeed in the long term, employees are just as crucial as customers, especially in knowledge-based industries. Companies that deliver excellent products and services heavily rely on the quality of their employees. For example, during Steve Jobs’ era at Apple, or in the case of Singapore Airlines, the reason customers highly value and return for their products and services is because of their employees.
2. The Double Standard of Executives
Executives speak about employees from two perspectives. The first is an optimistic view of employees as a source of growth. However, even in this case, employees are mentioned less frequently than customers. The second perspective is a precautionary one, where employees are discussed as a risk factor. During the pandemic, employees were mentioned more often than customers, but this was mainly in the context of risk mitigation.
For instance, when the job market is tight, executives talk more about employees. The importance of employees is emphasized when it becomes challenging to find qualified candidates. However, when the job market is normal or in a downturn, the mention of employees significantly decreases.
3. The True Value of Employees Lies in Actions
What’s more important than executives saying employees are the greatest asset is the actions that back up this claim. Companies like Apple have achieved success through great talent. Therefore, executives should pay more attention to their employees, not just in words but also in actions.
Investors should also carefully observe how companies talk about and actually treat their employees. It is crucial to invest in companies that retain top talent and consider them the driving force behind business success.
Conclusion: Employees Are the Key to Business Success
In conclusion, employees are just as important as customers for a company’s long-term success. Executives should not just pay lip service to the idea that employees are the greatest asset but should also support it with actions. Investors should also focus on how companies treat and value their employees. Investing in companies that treat their employees well will ensure long-term success.
Reference: Klement on Investing, “Businesses don’t care about their employees. Discuss”