Are You an Asset
or a Resource?

I don't know how many times I've heard companies refer to their employees as their most important assets. I've seen CEOs quoted saying it in business magazines. I've seen it on the websites of many businesses, usually on their "careers" page. I've heard managers say it. I've had bosses tell me that I was a great asset.

It sounds like they really care. It sounds as if the management of those companies truly believes that the people within their organization are their most important assets.

When you stop to really think about the definition of an asset, a different image comes to mind.

An asset is anything that has exchange value. An asset is owned.

slave-branding.jpgAre you a thing? Are you, as a human being, something that can be bought or sold?

Can you be owned?

Whenever a client refers to their employees as assets, I am quick to admonish them for their poor choice of words. Sometimes I can be harsh. "Do you mean to tell me that you actually bought your employees, like you would buy a machine?"

Sometimes I get a blank look of incomprehension; they do not know the true meaning of the word asset. Sometimes the person blushes with embarrassment while he thinks about the meaning of the word asset. Sometimes they say defensively, "But they are our most important asset." This kind of comment comes from someone who just does not get it.

We fought a long and bloody civil war in this country over a century ago to end the practice of slavery. Until Abraham Lincoln abolished slavery with the Emancipation Proclamation, it was possible for an individual to own another human being as an asset. After Lincoln signed that executive order on January 1, 1863, a business or individual could no longer own another human being.

You could say that on January 1, 1863, “work at will” became the law of the land.

Employees work for a company, and do so of their own free will. Companies do not own their employees. Still, many companies act as if they do own their employees. They see their employees as adversaries, as stupid cows that must be herded and cajoled into productivity. Managers sometimes treat their employees with contempt, and are in turn held in contempt by them.

That attitude, that contempt, is what brought about labor unions. Over time, the unions forced management to change. At least that is what the unions would like us to believe.

The thing is, market forces do play, and they change the way entities in the market operate. In this country the workforce has become mobile. Employees are resources, not assets. And as with any other resource, labor moves to areas where it is appreciated, just like capital, a resource, moves to where it is appreciated.

The movement of labor is happening across the globe, and the movement of the work to the labor.

In engineering there is the concept of worker to work and work to worker. In any man/effort relationship you can bring the labor to where the work is, or bring the work to where the labor is. In the aftermath of the great Mississippi River floods of the 1920s, a mass labor movement happened. The millions displaced by the floods moved to the factories of the North to seek economic opportunity. We have seen the same thing happen in China over the past decade, as millions have moved to factories along the coasts.

We are also seeing a movement of work to the labor. Some would call it the movement to “cheap” labor. While the monetary value of the labor in China or India is lower than in the more developed countries, it does not translate to an increase in value. In fact, many companies that moved manufacturing offshore are thinking again, once they realized that the savings of the “cheap” labor did not offset the transportation, quality or taxation costs.

Resources are not finite. Resources also come at different grades of quality. Resources have different characteristics. Water is a resource. Energy is a resource. Cash is a resource. Labor is a resource. Land is a resource. Companies will move manufacturing closer to resources to lower costs and increase the value created in their effort. If the water supply is limited, and the process requires lots of water, a company may move to a better source. If land costs are high in an area, and the operation requires lots of land, a company may move the operation to a new location where land is plentiful. If access to ports and transportation infrastructure is important, a company will seek out locations close to those resources.

Companies will also locate an operation based on the available labor, the quality of the labor, and the prevailing labor laws of the state. Twenty-two states (23 if you count Guam as a state) are “right-to-work” states. A right-to-work law secures the right of employees to decide for themselves whether or not to join or financially support a union. In states that do not have “right-to-work” statutes, a union can control the workplace and make membership in the union a requirement for employment at that company location.

Right to Work Map.JPGUnions in the private sector are on the decline. More locations in forced unionism states are closing and moving, either off- shore or to a right-to-work state. The companies making the moves are seeking higher value labor, labor with lower costs and labor that is more flexible. In fact, many companies that make the move pay the same wage levels to the non-union employees, but gain in value in that the employees are not restricted by work rule limitations.

Over time, the attitude of the unions and the employers changed. Employers seek better quality labor – as defined as a greater value resource. They must compete for quality and move to where the quality labor is. Unions also changed their attitude – and are treating members as more of an asset, not a resource. Union dues as mandatory payroll deductions, used as the union leadership sees fit, is but one example of this trend. The 2011 story about the National Labor Relations Board (NLRB) against Boeing on behalf of the International Association of Machinists to move some Dreamliner production from a plant in right-to-work South Carolina to a Union plant in Washington state is an example of how unions consider the employees of a company as union’s assets. Perhaps the union considers the company to be an asset of the union.

Where would you rather work? Do you want to work for a company that considers you an asset? Would you rather work for a company that considers you a resource? Do you want to be a union asset?

Remember, Lincoln did free the slaves, in 1863. You are now a resource, free to move about the country.

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