There is a common bullshit phrase you will often hear from high-priced consultants and “touchy-feely” human resources specialists — treat your employees like assets. Well, I think if we took this idea literally we could solve not only unemployment, but also underemployment and a whole host of other issues like company and employee loyalty.
Companies currently classify employee salaries and wages as expenses on the profit and loss statement. Despite what the consultants and human resource professionals say, as long as employees are classified as expenses they will be viewed by management, Wall Street, and investors as just that — expenses. And expenses are something to be minimized so as to increase profits and cash flows.
My idea, which of course would be laughed at by accountants and the finance community, would be to actually classify employees as assets. We currently classify products in inventory, buildings, technology, and many other “things” as assets, but people are treated as expenses or expendable. The current tax code is written to encourage businesses to invest in assets as the depreciation on those assets serve as a tax shield on the profit and loss statement. I argue that human beings should also be classified as assets on the financial statements. The salary and wages are investments in those assets and will be depreciated like other assets enabling the company to enjoy a tax shield from its employees. I realize there would be many arguments about how to calculate depreciation on human assets or appreciation, but I leave the details for the accountants.
This crazy idea would give upper management, Wall Street, and the investment community a reason to support companies that hire people, train them, keep them, and further improve them like other assets. They will like the idea of a tax shield in that taxes will be reduced and therefore profits increase as well as cash flow. They won’t care that the idea is philosophically correct. If we want to be American-centric (given unfair trade), we could even say that only American citizen employees will be considered assets and all foreign employees will simply be expenses. Wouldn’t that be interesting?
By the way here is a nice picture I took today with my cheap cell phone while thinking about this crap.