Are Employees Assets or Liabilities?

If you look at your company's Annual Report you'll find that the workforce is listed as a liability. That's the message that's sent to the company's largest shareholders. Of course internally, they tell you that all employees are an asset, and without you, the company could not go on. Sounds good in theory, but it's not true in practice. If you were a professional athlete or musician under contract then you could be viewed as an asset since a company can trade or sell you for the value of your services. But in the average company, employees are viewed as a cost to be managed versus an asset to be developed. You can be sure that someone at the top of the company is always looking for ways to reduce employee numbers while growing the business. Why do you think outsourcing, downsizing, and right-sizing are so popular? In truth, whether or not employees are viewed as assets or liabilities really depends on the philosophy of the Corporate Board and Executive Managers.

As an employee, should you be angry if you happen to be viewed as a liability? No!! You knew the deal when you took the job. And if you didn't, now you do. If your job is one that a company can put on the chopping block then it's up to you to take action to protect your professional livelihood. Don't blame the company - blame yourself! Since you didn't start the company, you really have no say in the high-level decisions that are made regarding your career. If the company's founders, board, management, and investors view employees as a cost, then you will be branded as a liability unless you get to the upper ranks of the company with a nice contract.


If your company views employees as an asset then you can expect to have great opportunities as long as you continue to bring value to the company. You'll get the necessary training, mentoring, and opportunities to do your job as well as advance your career if you so desire. The company will also use innovative and creative ways to ensure minimal job loss during tough economic times. So you rarely have to worry about unexpected unemployment. In the best case, the company will give you a great severance package and send you on your way. In the worse case, the company will temporarily freeze (or reduce) your salary for a specific time period until business conditions improve.

So which are you - asset or liability?