The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

The Most Important Part of a Business Is Its People

On January 25th, 2016, posted in: Uncategorized by

light bulb pendulum with peopleHere’s a fact. The most important part of a business is its people. Here’s another fact. The assembled workforce that drives the bus every day is one costly bunch of folks. If there is a business out there whose largest expense isn’t people, I am not aware. It doesn’t take long on the income statement (or in common sense) to figure out that the people in the business represent the greatest expense — both hard costs and soft costs.

Labor costs comprise a number of categories: wages, insurance benefits, and a whole bunch of acronyms come together to be a part of the total hard expense. Things like absenteeism, vacation, training, hiring, firing and discipline show up as soft costs. Don’t let the “soft” fool you — they add up like a jaw-rattling straight right-hand from Mike Tyson. Put them together, and there is no doubt your most important asset is also the most expensive. Congratulations, you just passed Business 101. People cost.

Given their expense, why don’t companies do more to take care of their employees? Corporate culture is a favorite topic among business leaders. We’re all looking for that pixie dust that brings productive people to work for our respective companies and then keeps them in tow throughout their working career. The success of one’s culture is as easily measured as the number of happy, satisfied, challenged and respected employees. Too simple? Probably not

Businesses have a Chief Financial Officer because things of a financial nature need to be managed with a high level of expertise. We have a Chief Technology Officer because the technology piece of the business better be in working order and secure. Most have a Chief Operating Officer because operations better have a watchdog. And of course, there is the Chief Executive Officer, whose job it is to watch over the other chiefs. There’s a lot invested in intellectual capital, all with the intent of gaining return on the investment.

That said, if the workforce is important, expensive and fickle, why not invest more in them? As an example, if health insurance costs are somewhere approaching astronomical on the list of employee expenses, why not make an investment in a Chief Health Officer? Obesity, diabetes and cholesterol problems that lead to heart issues are striking all around the working world. Pharmaceuticals are on a steep rise as well, and so is time missed from work. What if it was somebody’s job to develop a strategic means by which to attempt fixes to the pervasive health issues of our time and their effect on the workplace?

HR professionals do HR things that are needed all day every day. And organizational development gurus take their turns at cultural improvements important to making the workplace the best it can be. But, a Chief Health Officer would work to make noticeable improvements to the physical and mental health of the organization.

Crazy? I think not. I once did everything on an IBM Selectric Typewriter. There wasn’t a Chief Technology Officer anywhere to be found. (The young ask, “What’s a typewriter?”) Times change, and businesses should keep up. Especially with your staff.

No Responses to “The Most Important Part of a Business Is Its People”

Leave a Reply