Marc Haine and a co-speaker argue that treating labor costs as expenses instead of investments hurts retention. Expenses are one-way cash outflows that disappear, while investments in employee loyalty generate returns over time. Viewing workers this way blinds you to their long-term value.
I kicked off talking about budgeting. Standard bookkeeping practices, I think, taints our view of labor cost as an expense. Can you explain why this is really so, so, so bad?
Well, let's look at what's the difference between an expense and an investment. An expense, the money goes out one way and it's gone. An investment, Loyalty is something where it grows. You put out the money, but it comes back in many, many different ways.
Right.
And when you invest in your staff and every employee there knows that they're there because they're extraordinary, because what they think matters, how they feel matters, their insights matter, that comes back as loyalty.
