People Are Assets to a Business, NOT Simply Labor Costs

People Are Assets to a Business, NOT Simply Labor Costs

John G. Carlson is CEO & Co-Founder of Reflective Performance, Inc., a data and analytics company bringing a human-centered approach to increase productivity and corporate profitability. Informed by extensive experience in corporate turnarounds and operational improvements, Reflective Performance helps organizations enable a more stable and highly productive workforce — regardless of industry, products, or technologies — by applying the cognitive science of “executive function” (EF). In less than five minutes, a game-like software app called Reflect / EF unlocks previously unattainable insights about personal decision-making, life skills and workplace success.  Organizations benefit, too, through better management of the employment pathway for higher employee and customer retention and workforce development. He makes his first guest blog post with Learning Without Scars this week: “People are assets to a business, NOT simply labor costs.”

I’m glad to see Fortune call attention to the financial short-sightedness of organizations viewing their people as mere “labor costs.” Employees aren’t line items to manage, but people whose fundamental impact on the business can be enhanced through better management and tools that enable self-management. (This is what we’re doing with Reflective Performance, Inc. by using data and analytics to help organizations unlock the greater potential of their employees.)

As companies strive for profitability, they need to be able to seize improvements from a stable and highly productive workforce. This requires moving away from traditional financial metrics and management methods. People aren’t “capital,” but they can be understood as assets with an extended employment lifecycle in a way that parallels IT and other hard assets. Looked at from this perspective, costs can actually be measured from hiring to onboarding to training and then through high performance and retention, then analyzed through a Total Cost of Productivity framework.

Companies can greatly reduce so many wasteful costs and unnecessary overheads, not to mention “time sinks,” through lifecycle process management supported by investments in learning technologies and improved decision-making tools. These tools, data, and systems are readily available to enable this kind of system change, but first they require corporate leaders to change their perspective to build corporate profitability through human-centered productivity.


Companies don’t know how to measure their human capital other than as a labor cost–and it’s hurting profits

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.