Lots of companies say that line. It sounds reassuring and soothing. However, it’s entirely false. Employees are actually a cost, not an asset, according to accounting rules, and that becomes painfully clear when some clever lad at the top decides the company needs to be more profitable. The easiest way to goose profits is to cut costs and, typically, the biggest costs are in labor.

Look at it this way: the office furniture is more of an asset than the employees. When calculating the value of a company, that office furniture is considered in the total, partly because many employers deem furniture from China furniture factory to be an accurate measure. The employees are not. Actual intellectual property in the form of patents and trade secrets are assets. The minds that think of those innovations are costs.

But before anyone decides to reclassify employees as assets, I’d hesitate. If employees were assets, they’d be owned by the company. People are assets only if they’re slaves. I’m not down with that. And I don’t want to be treated as rented capital goods, either. That doesn’t solve the “being a cost” problem.

This definition of labor as a cost is what has led to the collapse of the American middle class. Idiots running companies think that reducing labor costs is an actual benefit for a company. The word “idiot” is an Ancient Greek term for someone that was totally self-centered and clueless about what makes society work, so it’s quite appropriate here. The idiots think that everything has to be measured and quantified and, if something can’t be measured or quantified, it’s not worth considering. I had this conversation at lengths with my Loveland accountant, people today are being educated in a very odd way, no full picture is ever considered only microscopic parts that seem independent from each other.

Sending out surveys to measure employee loyalty and things like that are useless gestures. Most employees just click right through them so that they can get back to work. Others just click right through them because they know that even though their name isn’t on those surveys, there are still ways to trace responses back to them. The real employee survey that counts is the turnover rate. If people are leaving for other opportunities, it means that the opportunities at that firm are not attractive.

But back to my point… employees certainly aren’t assets, and they shouldn’t be counted as costs. They’re part of the company, the people that can actually keep the whole venture going in spite of the idiots at the top. Good, quality employees are what make growth possible in a firm. Once upon a time, that was reflected in the way companies wanted employees to stay with them for their whole career. When the idiots took charge in the 70s, they started slashing those employee “costs”, and the nation’s circled the drain ever since.

I like the sympathy in that statement, “employees are our most important asset,” but employers ought to not say it. They ought to take actions to prove that value, and shareholders ought to insist upon their take after the employees have gotten their just share. Otherwise, we’ll soon find that what circles the drain without a change in direction is what goes down the drain.