In your business, you would know that your assets fall into two categories: tangible and intangible assets. But what about your employees? The question whether employees are tangible, intangible, or even assets at all is a tricky one.
Tangible vs Intangible
Legal consultants such as AssetProtectionAtty.com define tangible assets as things you can convert to cash such as investments, property, and things that you can sell. Intangible assets on the other hand are nonphysical things like your copyrights, and trademarks, and even Internet domains.
Obviously, an employee is a physical being but you cannot really sell them for cash as you can with other tangible assets. Technically, they come out as expenses on your balance sheet but this does not mean that they are not assets.
Skills as Assets
Employees seem to fall in-between these two types of assets and the answer to the big question is simpler than you think. When it comes to hiring people, you do not really hire them for who they are but what they do. It is the employees’ skills and qualifications that you look for, and in this light, their abilities can be intangible assets.
Despite this, you cannot actually place an employee’s skills in your balance sheet. Basically, assets are things that you own, and you do not really own an employee’s skills even if you did play a hand in training them. You can guide your employees, instruct them when to use their skills and all that, but these abilities ultimately belong to them.
Whether you consider employees as tangible or intangible, they no doubt play an important role in your business’ success. A troubling thought is how you can actually secure your employees as your principal “assets” despite all the technicalities.
It is simple: keep them happy. Make them like working and working for you. Treat them fairly and with the same respect they give to you. Even if you decide to sell your business they might just follow you to your new venture, and a reliable employee is an “asset”you can never replace.