Are your staff a cost or an asset?


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Financial executives have for a long time been fixated on the value of the “bottom line” and the value of the business to shareholders. Cost cutting has been the mantra for efficiency. However it can often be said that the financial executives, may well be charged with knowing the cost of everything but the value of nothing.

To be successful , every company requires three types of asset; investment capital, a product or service, and employees capable of operating the business. Of these assets, arguably the most important are the employees, because they use the resources of capital and product to satisfy customer requirements and by so doing produce the income which provides the profit which benefits the shareholders.

Commercial managers, have the responsibility of producing and maximizing profitable income for the long term future of the business, while at the same time minimising the use of assets, costs and investments..

Pay is not the sole motivator for employees, but it is a tangible factor that demonstrates the value that an organisation puts on an individual’s contribution to the business, and will always be seen by employees as a primary factor of their employment.

While it is important for a commercial manager to keep control of the pay bill, to be successful and attract and retain the best qualified people, an organisation has to be competitive in the salary market. If a company pays well, it has a right to expect a good level of productivity from its employees. However, if it fails to be competitive in the salary market, there is the danger that it will lose experienced people to other competitors. If this happens, the company not only losses experience and capability, but it then has the expense of having to recruit replacements, who will require the competitive salary not previously paid to the previous encumbants, but who will need time for training and to gain the necessary company experience. Thus it pays to have salaries that are market competitive, as it is more cost effective to retain experienced and capable employees than recruit new ones.

The late Robert Townshend, former chairman of Avis and author of the internationally acclaimed best seller, “Up the Organization,” advocated using outside full service marketing agencies, as a cost effective alternative to employing, internal specialists, as this reduced the overhead costs, and gave greater flexibility to use resources. But while there is an advantage in using outside contracted agencies for specialist activities such as communications, a business is still reliant on its own employees for the day to day operation of the business, especially with customer relations. It is the businesses own employees who retain the knowledge of the customers and the business procedures necessary to satisfy their requirements. Thus every business has an invaluable asset in the knowledge and experience which resides only in their employees. Retaining and motivating the necessary employees is thus a major requirement of the commercial manager.

An effective commercial manger will keep their staff motivated by listening to their concerns, assisting with their problems, ensuring that they have the resources and necessary training, and encouraging their involvement in identifying potential improvements as well as problem resolution.

There are several actions that a commercial manager can use to maximize and motivate employee performance.

* Communicate with employees frequently, and speak directly with individuals. Employees need to know that they are valued, and direct personal communication is a good way to show appreciation for their hard work.

* For commercial managers, pay should be regarded as an asset investment.
As far as possible, pay should be at least, or above, the market average in order to aid both recruitment and retention.

* Give employees the authority and parameters in which to make their own decisions, without needing to get prior approval. Ask for their input and get their suggestions on how they can improve their performance, and if valid, take their advice and implement it.

* Offer training that provides for career development and future promotion.

* Have a policy of recognising and rewarding success helps to inspire employees to work toward achievements. Staff will know that their contributions are valued and that management is confident in their capabilities.

Detailed business plans, and expensive promotions will achieve little unless the personnel involved are capable, motivated and effectively managed. A salary bill is a major part of business expense, but it funds the employees who are the principle asset on which the business depends for its livelihood and future. For the commercial manager, maximizing profitable income efficiently depends on the effective motivation and management of everyone involved in satisfying customer requirements.

Nicholas Watkis, AE MA DipM CMC FCIM
Nicholas Watkis set up Contract Marketing Service in 1981, providing professional interim marketing management for a wide variety of businesses. Over 30 years practical experience in organizations, large and small, national and international, led to the development of Business Performance Maximized specialist in marketing performance measurement.


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