Why do companies obsess over cost per hire but spend so little time trying to see if they make good hires? Why do they provide so little training when we know it improves performance and many candidates say they’d take a pay cut to get it? Why do firms delay filling vacancies and let work go undone? Why do they spend so much money leasing personnel from vendors rather than hiring their own?
One answer to those questions is the peculiar way that financial accounting in the United States treats employment costs (which differs from the way that international standards treat them). Despite all the rhetoric about “investing in our people,” training and development aren’t considered investments; they’re categorized as a current expense, a type of fixed cost—just as carpeting is. So are other employment costs such as wages and salaries for all administrative work. Given that U.S. companies enjoy considerable freedom to lay off workers, treating such expenditures as fixed costs that can’t be reduced during economic downturns makes little sense. Along with other rules, it helps explain why more and more firms are shifting work to nonemployees, a trend that begins in cost accounting. By transferring work away from employees, companies get rid of fixed costs and move employment costs into another accounting category.In short, the financial accounting system distorts business decisions in ways that are worse for everyone—investors, employers, and employees.
“If employees had asset value, one would think twice about just cutting them,” says Cappelli, also the director of Wharton’s Center for Human Resources.
Jack Welch is turning over in his grave screaming "Share holder value!
“I had to calm down before making this video, because the audacity,” says Kiki (@kikirough), before explaining in her TikTok that she was one of the thousands of Americans laid off about a month ago.
So when she received an email from the male CEO of her former employer, she was obviously surprised. But the email wasn’t about getting her job back or even a kind-hearted check-in to see how she was doing. Instead, it was a request for help.
In a nutshell, Kiki says the CEO was in a bind and asked her to do something that no one else in the company knew how to do after her departure. In her response, the TikToker says she reluctantly agreed to help before listing a few things she believes would need to happen to complete the project.
That said, she wanted to be clear first about compensation since doing work of any kind would cause her to forfeit her unemployment benefits.
Kiki posed what she thought was a reasonable request: Could she get a week’s pay for helping out?
The response she got left her speechless.
“He essentially says, ‘You’re not worth the week’s pay, you can do it for me hourly,'” recalls Kiki, who shows part of the email in which the CEO claims the task should “only” take about a day or two.
“Please submit form FY-001 with your exact specifications of what needs to be done”, “I will reply in 10 days with a quotation for said work including my hourly rate for consulting and an attached contract”, “Have your attorneys review the contract and submit form FY-002 with any revisions to my attorney”, “We will then agree on a contract, sign it, and the work will begin no more than 30 days after the contract has been signed”.
I worked at Motorola from roughly 1996 to 2004, give or take. I was in PowerPC processor developlment at a time Apple used them. And at that time Motorola had “Motorola University”, an internal training company. We were required to take 2 weeks per year of courses. And had surprising latitude on what we wanted to take.
New college hires also went through internal training regimens, lasting 12-18 months. (same with when I hired into Texas Instruments earlier in 1989).
Now, new college grads (NCG’s) are expected to be productive within WEEKS. And I fear that college curriculums have adjusted to this, with students not getting the rounded education I got, even though I went to a small college with only 7 engineering degrees to choose from (and we still had a humanities and social sciences department, and I had to take 3 years of courses from them to be a Comp Sci major).