Employees and Candidates as Investors
Companies often say that people are their most important asset. I have always found this term disingenuous, and when I hear it, I feel disrespected.
Am I making too much out of a word? I don’t believe so. Words are powerful and convey hidden meanings and create behaviors, sometimes ones we don’t wish to convey.
What Is an Asset?
The dictionary defines assets as resources owned or controlled by a business. Usually, assets are considered to be physical objects or financial assets. They can be sold, rented, depreciated, or discarded.
When we think of employees as assets – as things we control and dispose of as we see fit – behaviors emerge that create many loyalty and engagement issues. When we care more about stockholders than employees, we are disrespecting them. When we care more about our quarterly profits than employees, we disrespect them. When we treat candidates impersonally and dismiss them perfunctorily, we disrespect them.
Employees as Investors
We should think of employees as the most important investors in our organizations. They have freely chosen to share their expertise and skills with us expecting a return on their investment. We should think of candidates as those deciding whether or not to invest in us.
The return on an employee’s investment may be a paycheck, security, meaningful work, relationships, or a combination. Each employee has a built-in return on investment meter that is constantly sampling the atmosphere and deciding if she is gaining or losing from a continuing association with the firm.
As long as the employee feels they are gaining, they don’t look for different jobs and remain engaged. But whenever the balance shifts even slightly, employees become vulnerable to any offer that may present itself. That is why having firms and managers with a history of employee loyalty and low turnover are so desired by job seekers.
When an employee seeks a different position inside the firm, they are looking for a challenge, aren’t happy with their current assignment or boss, or feel that the new position will offer a better return on their investment. To deny them the opportunity and place an HR policy, for example, in their way is a sure way to lose them. Happy employees who are being treated as investors will be unlikely to leave.
Candidates, too, make decisions and judgments about your firm and the position based on how they are treated. Respected candidates are more likely to join and more likely to refer people to you.
From Asset to Investor
Lincoln Electric is an excellent example of a company with an investor mentality, even though very unconventional and controversial.
Located in the American Midwest, it has become well-known for its lack of “normal” worker benefits over the years. Lincoln Electric has been in business for over 50 years yet offers no employee benefits. Employees are not paid sick or vacation time but choose to work when they wish. Employees are paid for their output, by the piece, for their work. They earn as much or as little as they want by choosing their own working hours. On-the-job training is done on their own unpaid time, but the more skills they have, the more they can earn. Average salaries are higher than comparable jobs at other firms. Only senior-level employees are paid a salary.
Each employee votes on how any profits are distributed. Turnover rate? Virtually zero. Absenteeism? Almost none. Recruiting issues? Standing room only.
How does a company with no benefits and few amenities get such dedicated employees and excited candidates? Simple. The employees get a clearly understood fair return on their investment of time and energy. Their raises don’t come from who likes them but from their performance. It is a simple system that works very well and shows the power of being treated as an investor.
By shifting thinking from asset to investor, new opportunities emerge. Now employee development, apprenticeships, rotations, and internal mobility begin to make good sense. Engagement happens because people are respected and doing work they consider meaningful and fulfilling.
An Investor Mindset About Work
Investors are not controlled but exercise their own judgment. Employees treated as investors develop their own flexible working schedules and are empowered to choose projects to work on. Given the newer generation of workers, nothing is more disempowering than being assigned to work without consultation.
The gig workforce, now becoming a core part of the workforce ecosystem, is also not likely to accept work contracts without input into the work requirements or content. Work needs to have clear outputs and end goals. The workers should be empowered to determine how best to achieve them.
Leadership
The Pandemic has done more to accelerate leadership changes than all the classes and change management programs of the past decade. Positioning people as investors requires leaders to understand what motivates and engages them. It enlarges the picture to include the contingent and permanent workforce as they become key contributors to the success of projects and the organization. Team leadership becomes mainstream as opposed to managing individuals.
Recruiting Investors
When you recruit an investor, you take a different perspective than when you “purchase” an asset. Companies spend time and executive-level attention courting investors, speaking to investor clubs, writing letters and articles in publications aimed at prospective investors, and building their brands.
Recruiters need to do the same. They must treat candidates as investors by providing a personalized and candid experience. They should focus most of their time and energy on communicating with the talent market, not just those that apply. There should be focused outreach, press releases, videos, and whatever other media makes sense to reach as large an audience as possible to show how employees are treated and what it is like to work in their organization.
Starting to think of candidates and employees as investors will go far in creating a positive candidate experience and engaged employees.
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