Employees Are Not Assets

I am still amazed at how many organizations do not allow their current employees to apply for internal positions until they meet a whole bunch of conditions. Typically, they have to have been in a position for a certain amount of time, may have to meet performance requirements, may have to fill out an application, and then go through the same interview process as an external candidate.

Most HR people think this is fine, and in fact, often put these rules in place. Their thinking is understandable from one perspective. After all, shouldn’t a boss be aware that an employee is looking? And if a person has only been in a job for a few months, isn’t it only fair they give their boss their services for a few months?

My answer is that yes, it would be fair, if we were not in the midst of a talent shortage where “fair” has little meaning. Is it fair any employee can simply tell her boss she won’t be back tomorrow because she has another job? Is it fair that employees can often get a salary increase of 10% or more simply by moving to another company? Is it fair that we have a labor shortage? There is little in life that is fair, and the days of stability and loyalty in our corporations are over. We could argue about why these traits have gone by the wayside, but the truth is that they have.

The shortage of talent in some areas such as engineering, IT, medicine, and finance are so severe that almost anything has become “fair” in the pursuit of talented people with these skills.

I have started to notice “For Hire” signs hanging in front of lots of stores and restaurants I have been in over the past three months seeking hourly help. This underlines the growing shortage of talent and the growing need for people with key skills. To place obstacles in the way of anyone with a motivation to raise their hand to move into a needed position is plainly just dumb.

Let’s face the truth: whether employees are allowed to transfer freely inside or not affects no one but the employer. They lose a good employee to another company for no good or value-added reason.

Employees As Investors

One of our problems is that we think of employees as assets, or things we control and dispose of as we see fit. Unfortunately, this characterization leads to behaviors that are incompatible with reality. Employees cannot be owned, taxed, depreciated, or disposed of as machines or other tangible assets.

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They are investors in our organizations and they freely choose to share their expertise and skills with us or not. 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 employees feel they are gaining, they don’t look for different jobs.

But in this job market, whenever the balance shifts even slightly, employees become vulnerable to any offer that may present itself. That is why having managers who have a history of good employee loyalty and low turnover are so valuable.

Usually when an employee wants to apply for another position inside the firm it is because they are looking for a new challenge, are unhappy with their current assignment of boss, or feel that the new position will offer more of a return on their investment. To deny them the opportunity and to place some HR policy in their way is not only a sure way to lose them to someone else, it is also just plain dumb. Happy employees who are being treated as investors will be unlikely to leave.

Here are four things every organization and HR group should be doing or should have in place today:

  1. All policies should be abolished that limit or control how or when employees apply for positions within an organization. Every employee should have the same employment at-will opportunities inside the company as exist in the open marketplace.
  2. Companies should make it a policy to encourage employees to share expertise and skills broadly. After all, it is the networking interconnectedness of our employees that add value and allow us to develop new products and generate new ideas. Creativity does not arise in stable, rigid, and change-adverse organizations. The most exciting new concepts and ideas come from small firms where people wear many hats and move between responsibilities such as the dot-com companies of Silicon Valley.
  3. Let recruiters work just as freely inside as outside the organization and let them work on back-filling positions that may be vacated by an employee who is moving on to something else. If a recruiter knows an employee is leaving for a new position, they can help the manager find someone else for the old position at almost the same time.
  4. Create policies that allow employees to try out new jobs for a short time to see whether they like it and can do it well. Let employees share their job with someone else so they can sample more than one kind of work or more than one project. Foster a spirit of sharing expertise and skills, not of owning the mind and body of someone.

The policies that restrict or limit transfers and change within an organization are leftovers of the 20th-century organizations that are hierarchical, paternalistic, and slowly fading away. A 21st-century organization removes barriers and builds networks that power creativity and growth.

Kevin Wheeler is a globally known speaker, author, futurist, and consultant in talent management, human capital acquisition and learning & development. He has founded a number of organizations including the Future of Talent Institute, Global Learning Resources, Inc. and the Australasian Talent Conference, Ltd. He hosts Future of Talent Retreats in the U.S., Europe, and Australia. He writes frequently on LinkedIn, is a columnist for ERE.net, keynotes, and speaks at conferences and events globally, and advises firms on talent strategy. He has authored two books and hundreds of articles and white papers. He has a new book on recruiting that will be out in late summer of 2016. Prior to his current work, he had a 20+year corporate career in several San Francisco area tech and financial service firms. He has also been on the faculty of San Francisco State University and the University of San Francisco. He can be reached at kwheeler@futureoftalent.org.


7 Comments on “Employees Are Not Assets

  1. Kevin,
    I love this analogy. We do need to think of our employees differently in today’s economic environment than we did 20, 10 or even 5 years ago. It gives a whole new dimension to the phrases ’employer of choice’ and ’employment at will’.

    I’m not sure I agree with Point #1 though, ‘All policies should be abolished that limit or control how or when employees apply for positions within an organization.’ is a little too broad. I’ve seen deadwood float within an organization and I think that performance guidelines can still be used to enhance mobility within an organization. However this is only effective when the organization has a validated and effective talent management process and the managers buy into using it and are trained in how to manage their people.

    Thanks though for again sharing your unique perspective.

  2. I would argue that indeed Employees are most likely an organization’s most precious asset, unless you have a completely automated process where the need for human intellectual capital does not exist.

    Part of the human resource management function is to create processes that make sense and are perceived as ‘fair and equitable’ around internal transfers. Without ‘some’ fences around this, a ‘free-for-all’ chaotic climate could be created, thus jeopardizing an organization’s overall performance in the marketplace.

    It takes a bit of time to not only assess an employee’s functional capabilities within the job they were hired to perform, but almost as importantly, their ‘culture fit’ within the organization.

    I would be the first one to champion a culture that first looks internally for talent. However, this should be done within the parameters of a systematic approach, and not the ‘free agent’ mentality that Mr. Wheeler’s approach would create.

    If organizations would focus on creating ‘extraordinary’ internal relationships as their ‘default’, their employees would feel empowered and most certainly have a ‘longer term’ perspective.

    If anyone is interested in this approach, please feel free to contact me at rleventhal@rmrginc.com

  3. When a company posts requirements for an open position, they are avoiding litigation, or threats of same, as much as they are stating requirements. This fact should be ‘old hat’ by now to everyone. If bosses have someone they would like in the position, that is almost invariably already known. In the interest of fairness (read, ‘avoiding problems/litigation’), they post the position before making a selection. Also, most companies require that an open position be posted for internal consideration a set amount of time before outside candidates can be considered. Again, while it appears done in the interest of being fair, it is done as much or moreso to discourage litigation, or threats of same. Lastly, it’s hard to blame HR for these rules, as they were borne out of internal or external legal counsel recommedations.

    The first two paragraphs of this article would lead one to believe the author is unaware of this. The rest of the article made good points, as Kevin always does. Unfortunately, starting an article off with flawed premises generally leads to flawed conclusions.

    The ‘talent shortage’, which currently is a mere nudge compared to the crash it will be in 10-15 years, is going to alter hiring in many ways. Can you imagine jumping through all the hoops candidates and Hiring Managers currently go through when the country is short 10 million employees? HR/Legal policies are going to change faster than the names of third-world dictators, and it’s going to create a bumpy ride for all.

  4. Interesting article and more interesting reactions.

    I couldn’t agree more that employers need to transform their attitudes toward their employees. I never particularly liked the ‘asset’ analogy in good times or bad. It always gave the impression that employees were held in the same light as capital equipment when, in fact, the equipment doesn’t perform if the workers aren’t sufficiently skilled in its use.

    The employees as investors concept it solid. It puts employees on the same par as those on Wall Street to whom management is known to pander a bit. The thought that companies should encourage job sharing and other job experiences of its employees is great as well…as long as these employees have the behaviorial characteristics and the skill sets to perform in the desired postion.

    It is easy for employers to fall into the trap of assuming that just because someone does a job well that this job is all they ‘should’ or ‘could’ be doing for the organization. Fact is there is a lot of untapped talent potential within all organizations and management just doesn’t see or realize it.

    A comprehensive company wide assessment program that identified the capabilities and inherent traits of both internal and external applicants might be of significant value to employers. They could uncover talents among existing employees that could serve to be mutually beneficial while raising the performance bar for new employees.

    If anyone is interested in exploring how such a program might work, I’d be happy to discuss in more detail off-line.

    In the meantime, thank you, Kevin, for your fresh insights.

  5. This article really highlights the problems facing most companies in the new millenium. There are always individuals in a company who are ambitious and underemployed. However, these individuals who have proven themselves within a company are discouraged from seeking new opportunities for a variety of reasons including policies, procedures and uncooperative bosses.

    This dilemma is being faced by many companies who have the choice of either paying people more money or offering more promotions. There are not that many layers of management in many corporations compared to how things use to be in the traditional corporations of the 1960’s and the 1970’s. The challenge for most companies is how do you keep these top performers content…

    Most companies insist on maintaining the status quo and not recognizing top performers…..These unsatified and unchallenged employees will leave regardless of whether the company likes it or not while the under achievers with tenure remain.
    How inconvenient for the hiring manager to find a capable employee.

    Employees are not assets but then again they are not corporate drones to be controlled and manipulated.

  6. IMHO, it would be better to consider employees as ‘CEOs’ as opposed to investors. After all. millions of employees are already investors through ESOPs.

    When I say ‘consider’, I do not mean for compensation purposes. Rather: policies, respect, and consideration should be given under the belief that ‘if it shouldn’t be done to a CEO, it shouldn’t be done to anybody else’. In other words, I advocate an egalitarian application of the Golden Rule as applied to hiring and personnel practices.

    It is my strong belief that the vast majority of people will respond positively to conditions where they are truly respected and well-treated. Furthermore, if employers aren’t prepared to give respect, loyalty, and support to employees, they shouldn’t be expected to receive it. Isn’t this obvious?


  7. Thought provoking as always, Kevin. I would add one danger. When you encourage internal employees to apply for any internal roles you need to be even more careful that the interview and assessment process is evidence-based.

    An internal candidate who feels like the process was flawed, and as a result they were unsuccessful in being offered the position, is a candidate who is probably going to leave that company sooner than if they never applied for the job in the first place.

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