People: An Expense or an Investment?

Surely, some of you after reading the headline on this article may be wondering how is it possible that a person from human resources would dare say that the associates in a company could be an expense? In reality, I am not referring to the person as such, but to the disbursements of money from an organization as a result of having an employee and, well, yes, I really think so. I also believe that it can be a cost and an investment. It all depends on the type of organization in which this person is, on its organizational culture and on its culture toward the management of associates.

Certainly, many of you reading this article will agree that one of the main money disbursements (let’s call it expenses/costs or investments) is payroll and the overhead that having personnel entails. That money can be something that becomes nothing or something that becomes a greater amount as far as income is concerned. I do not intend to give you a finance class, as I am not an expert on the subject, but I do not need to be an expert in finance to know that people can be the best thing that can happen to an organization, or quite the opposite.

Let's go step by step. When is the workforce an expense? It is very simple: when an organization does not think of its staff members as evolving individuals with needs who seek to see them satisfied through their organization. That is when it is an expense. Here’s an example: I am going to use an incident that recently happened to a friend, George, who used to work in “company X.” My friend had been working for X for three years. They paid him an excellent salary and gave him excellent benefits, constantly trained him, in fact, some of my other friends might say that they overtrained him (I disagree). George is an excellent professional, very prepared and responsible. He always did well in his performance evaluations, his job was mainly to solve problems with his main work tool, his computer, and in reality, from what he told me, he did it very well. However, that was not the only thing he did well. George is a high-performance athlete, and he had always dreamed of competing in a triathlon abroad. For that, he had to prepare very hard. When the time finally came for him to go and fulfill his dream (which he had had to postpone due to the pandemic), he had eight months to get ready. But there was a problem. Because my friend lives in Mexico City, his commute to work was 1 hour, 20 minutes to get to work and 2 hours to return home, taking 3 hours, 20 minutes out of his day. This was time he lost from his training (and his life). He immediately decided to talk to his manager to propose doing home office during those eight months. He suggested several scheduling options but, in the end, none were approved (according to what he told me, they were immediately discarded). When he saw that he was not going to be able to reach any agreement with his company, he immediately became active on the networks and got a job very quickly (remember, I told you he is very talented). George decided to leave that organization and go to another where he would be able to fulfill his professional dreams but also his personal goals.

When my friend told me his story, I couldn't help but put myself in the shoes of the people in his organization. It must have been a hard blow to lose such a high-performing associate, and after having invested so much in his training! But the issue here is not the investment in his training, it is that this investment ended up being an expense. George’s work was mainly done on his computer. It would have been possible to apply a home office policy (according to what he told me).

With this story I do not intend to judge this particular organization. What I want to convey is that from my perspective, something happened that occurs in other organizations. The issue is one of “policies,” as happened in this case. The current policies of the organization did not allow for home office and, well, nothing came of it. The deeper issue is that there was no intention to review the policies. Does that mean, then, that the policies of the organizations are made for life? I firmly believe that policies serve to regulate the present and the future, but without losing sight of the fact that things, circumstances and above all people are constantly changing.

As organizations, we have to listen to our employees — our clients — to be able to adapt to constant and changing needs. I think George's example is illustrative of this point. He was delighted with his organization for the first three years. Later, his needs changed, which is completely normal. However, George is a person who seeks to make things happen, he is a person who raises his hand, he is the opposite of a shy person. But then, what about those shy people, the ones who don't raise their hands? Do they let go of their dreams? Or do they just resign to pursue them without even trying to talk to their organizations? I believe that there are all sorts. It is our obligation as members of an organization not to see the disbursement for associates as an expense but as an investment.

So, when is the workforce an investment? Well, when exactly the opposite of the previous example happens; when we listen to people and we are aware that they are evolving human beings who seek to satisfy their needs and/or their dreams through the organization; when an employee is engaged with the organization; when he or she knows that he or she is important to your company; when he or she feels heard and when his or her dreams are not compromised by being within the organization. But then why are these investments? Because by complying with all of the above, the associate does their job in the best way they can, they do it with enthusiasm and that is then reflected in the company’s results. The best thing of all is that they stay in the organization and grow together with the company.

Does that then mean that I have to modify my policies every time an employee approaches me with a new need? I am not saying that; each organization can decide when to apply changes and when not to. The key, from my point of view, is to be willing to listen and challenge our own rules. I am not saying that we have to break them, I am saying that we must question whether the objective for which these rules were created at the time can continue to be fulfilled in some other way that helps the organization to be more attractive to talent. In other words, to question whether the objective is still viable. How many times have we asked the reason for something and the answer has been, “because that is how it has always been done.” This is an invitation to challenge ourselves, what we do, how we do it and why we do it.

In your organization, are the expenses paid relating to employees an expense or an investment? Better yet, what do you want them to be? It's never too late to change the way you do things.