Our Least Important Asset: Why the Relentless Focus on Finance and Accounting is Bad for Business and Employees

The management of employees in the modern workplace is driven by financial accounting, which views employee costs as fixed costs and fails to account for the costs of bad employees and poor management. This has led to stagnating or declining real wages, job insecurity, and uncertain retirement income. Peter Cappelli argues that this problem is not a result of companies trying to be cost effective, but rather stems from the logic of financial accounting and its fundamental flaws in dealing with human capital. He provides a comprehensive and insightful critique of the modern workplace, where the gaps in financial accounting make things worse for everyone, from employees to investors.

Format: Hardback
Length: 272 pages
Publication date: 18 December 2023
Publisher: Oxford University Press Inc

The modern workplace has undergone significant changes, driven primarily by the quirks of financial accounting. This approach, while intended to maximize shareholder value, has had detrimental effects on employees and the long-term success of organizations. Real wages have stagnated or declined for most workers, job insecurity has increased, and retirement income is uncertain.

Hours of work for white-collar employees have consistently increased, while opportunities for advancement have withered. Moreover, evidence of the negative impacts of workplace stress on health continues to mount.

Peter Cappelli, in his book "Our Least Important Asset," argues that these issues are not a result of companies trying to be cost-effective. Instead, they stem from the fundamental flaws of financial accounting in dealing with human capital. Financial accounting views employee costs as fixed costs that cannot be reduced, failing to account for the costs of bad employees and poor management.

The primary goal of today's executives is to drive down employment costs, even if it raises costs elsewhere. This focus on costs per hire over the quality of hires, the replacement of regular employees with leased workers, the shift to unlimited vacations, and the transition of hiring responsibilities from professional recruiters to more expensive line managers are all examples of practices that undermine the evidence-based approaches to improving worker quality, productivity, and creativity.

Cappelli's book provides a comprehensive and insightful critique of the current management mode, offering practical solutions for creating a more equitable and productive workplace. By recognizing the limitations of financial accounting and adopting a human-centered approach, organizations can foster a culture that values and invests in their employees, leading to long-term success and prosperity.

Weight: 482g
Dimension: 165 x 243 x 24 (mm)
ISBN-13: 9780197629802