Isn’t it interesting that CEO’s champion people as their company’s greatest asset, yet people still remain invisible, intangible and reflected as expenses / liabilities on the balance sheet?
People are the core contributors to profits and shareholder value through product development, customer service, and supplier network management.
As early as 1967, Harvard Business Review published “Put People on Your Balance Sheet” which discussed various methods to classify human resources. In 1999, Peter Drucker stated, “The most valuable asset of a 21st century institution, whether business or non-business, will be its knowledge workers and their productivity.”
Finally, nearly 50 years after this early research, the war for global talent may be the catalyst for proper recognition of human resources and its importance. HIP Investor Inc, a global investment firm in San Francisco and their research partner Solaron have discovered a handful of global firms including Infosys and Tata (based in India) who are pioneers in calculating, measuring and reporting the value of its human assets in its financial statements and includes a “comprehensive intangibleassets score sheet” for ROI on people investment. Sadly, they found no US or European companies reporting in this manner.
What do you think? Should a company’s balance sheet reflect human resources as assets not liabilities?
Looking forward to your comments!
The HR&Relo Advisors Team