Why Are Employees the Most Valuable Intangible Assets?

Why Are Employees the Most Valuable Intangible Assets?

What do you think is your company’s most valuable asset? Many things might come to mind, such as your high-end systems or state-of-the-art equipment. However, you should not forget that intangible assets are what’s most critical more often than not.

Intangible assets such as intellectual properties, trademarks, patents, and copyrights, are created by people and don’t have a physical manifestation. This includes your employees. But how can they be an intangible asset when they are there physically? You have to remember that companies employ people mostly for their skills, abilities, and experience, not their physical characteristics.

As the HR manager, you must know that the employees are the most important asset any company has. They operate and keep the company working. Their skills and abilities differentiate your company from its competitors, and they contribute towards shareholder value and profits. 

Employees As Assets - What Does It Mean?

Employees’ abilities, knowledge, and experience cannot be assigned a monetary value. No two employees are the same, and although one can substitute the other for some operations, they will have different quirks and techniques in working that’ll affect the whole company dynamics.

When a skilled and talented worker leaves your company, you can't just replace them by bringing on anyone you’d like to hire. Their knowledge and skill-set must be equivalent to the employee who left the company. However, every individual has different capabilities and potential that need to be incorporated into the company’s processes to adjust and work well with others.  

Engaged vs. Disengaged Employees

Businesses should know that the skill-set of their employees accounts for 85% of the company's assets.  Therefore, the abilities and skills of employees determine the success of the company. Employees are the backbone of an organization. If they don’t correctly perform their responsibilities, the company will suffer. In a research conducted by Gallup, disengaged employees cost organizations 450 to 550 billion dollars in lost productivity every year due to poor performance and absenteeism. These employees usually don't take responsibility for their poor attitude or behavior, work, and organizational productivity.

On the other hand, highly engaged employees can do wonders for the company's productivity and profitability. Companies with highly engaged employees have 17% more productivity and 21% more profitable than similar companies with disengaged employees. 

Why Employees Are the Most Valuable Intangible Asset

Every organization needs to value its employees as an asset. Their employee's skills, abilities, knowledge, and experience are intangible and invaluable assets in securing the organization's future. Valued employees’ positive mood will directly impact the processes, profits, and productivity of the organization. They will gladly engage in the organization to overtake competitors and stand or grow with the company.

Here are more reasons why employees are vital:

1. They Deal With the Customers

Employees are in the frontline and have the information on the customers' needs. This enables them to anticipate customer needs, identify new trends, and improve current services or products based on the customers’ feedback. Also, if your employees are happy and satisfied, they will perform their jobs well and convey that cheerful feeling to the customers.

2. They Know How to Work and Improve the Systems

Employees use the company’s internal tools and systems every day. They’ll be the first to identify a possible problem with the systems as they are familiar with them. They can also provide insights on how to improve them by coming up with solutions and sharing ideas.

3. They Connect and Keep the Company Running

Every department of the organization has different employees with various specializations and responsibilities such as marketing, finance, production, Information Technology, etc. They take good care of your company's finances and produce final goods, promote products and services. Improving their performance and productivity should be prioritized.

4. They Are the Company’s Brand Ambassadors

When employees are happy with how they are treated and recognized by the company, they’ll be loyal and proud of being a part of the company. How employees are appreciated will spill into their immediate networks and create a ripple effect that promotes your company indirectly. However, if employees aren’t satisfied, they’ll spread negativity in and out of the organization - whether they’re still working or have already left. Also, if you have low employee retention and short tenure, it will be challenging to acquire new talents.

5. They Are the First Customer in Any Organization

Employees possess different skills along with knowledge. Their skill may consist of training and development programs, expertise in a specific field, a keen understanding of the procedure of work, work culture, and overall system. Satisfied and happy employees deliver high performance and productivity, thereby increasing the profits of the organization. Prioritize your employees like how you prioritize customers.

Many business owners understand that their people are their greatest asset. For example, last 2019, Hilton ranked number 1 on Fortune magazine's "100 Best Companies to Work For." This is because they believe that their 430,000 employees worldwide push the company forward. "We try to care for our people in the right way so they will care for our customers,” CEO Chris Nassetta said. Sure enough, the company generated 7 billion dollars in total revenue.  

6. They Nurture an Organization 

Happy and valued employees give their 100% effort to the company. Your employees work hard every day to nurture an organization by providing their heart and soul. They strive hard with their skill-sets and values. Well-trained, motivated, and experienced employees will deliver excellent customer service that makes your organization stand out from the competition. 

7. They Increase the Company’s Productivity

Companies who value their number 1 asset (human resources or employees) are more likely to become successful than those that do not. It's not just the company's offer in terms of pay and benefits, but also how they treat their employees. These employees perform well, resulting in excellent customer reviews and a solid base of customer supporters.

8. They Strengthen an Organization’s Long-Term Prospects

It takes time to find eligible people to replace great workers who left an organization. If you see your employees as assets, you will do everything to keep them. After all, experienced employees will keep your business on the right track in the years ahead.

9. They Are the Foundation of the Company

If the employees are not engaged or not motivated, the whole organization will crumble. This is the primary reason why employees are the most valuable asset for an organization. You have to make sure that your employees come to work every day inspired not only by the pay and benefits but also by the company’s goals that align with theirs.

How to Retain Employees

Now that you know how important employees are, what should you do to hold on to them? To keep and make employees want to stay, the organization's primary goal is to ensure employees are satisfied, and it’s not just through appropriate salaries. 

To retain the most valuable intangible assets of the organization, you must increase their engagement and strive for a higher commitment, energy, and drive that will reflect in their daily tasks. Some ways to motivate employees include: 

  • Praises and Appreciation (Great job on the presentation!)
  • Public Award or Employee Recognition Programs (During events or with plaques.)
  • Bonuses (Can be monetary or in-kind like travel tickets.)
  • Collaborative and Healthy Work Environment
  • Additional Fringe Benefits

Always look for ways to show your employees you see and care for them. Remember: a person who feels appreciated will always do more than what is expected. Employers should understand that their human capital is vital and should be protected. Without employees as assets, an organization is limited in realizing its future goals and providing good customer service. 

Let Your Intangible Assets Know Their Value

To improve your employee's performance and to show that they are your greatest asset, follow the tips below:

1. Respect Your Employees

Do not talk down or belittle your employees. Instead, treat every employee with respect regardless of their education, personality, gender, age, or cultural background. It’s also important to note that no matter your employee’s position, you must know their name and show them you care. Every employee is essential and works for the best of the organization.

2. Empower Your Employees

Allow your employees to find solutions they encounter on their job on their own. Let them decide, and help them learn from the results even if they made mistakes.

3. Recognize and Reward Your Employees’ Achievements

Make sure to let your employees know that you appreciate their contribution when they do a great job. People who are valued will tell good things about your company to their friends, family, and customers about how much they like working in your company.

4. Give Them Opportunities to Grow

Challenges such as assignments can stretch your employee’s capabilities and add to their skills. This is a great way to keep them engaged in the business.

Recruit Top Talent With Lanteria HR

Employers should recognize employees as the most significant asset - after all, motivated employees can make or break a company. These invaluable and intangible assets will help in securing the future of your company, so you should take care to recruit the best ones. If you are looking for a new generation recruitment platform, Lanteria is here to help! Find and recruit top talent - easily, quickly, and affordably. Reach out today to learn more!


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