Chapter 4. Employee Assets and Contribution

In the past, employees have generally been regarded as a necessary cost of doing business and not as an asset on the company’s balance sheet. As the economy has shifted from that of physical production to one of service provision, the role of the employee has taken on greater and greater importance. Many leading companies have few physical assets and the value of those is dwarfed by the value of their human capital. How do we value human capital assets? Before starting the development of a model that describes the value of employees from a human capital or employee asset model, we start from the larger perspective that an economist would use to examine the subject.