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The Social Balance Sheet: Are Your Employees Assets or Expenses?

Capitalism: when we treat property better than we treat people.

There was a time when businesses wanted women to have babies.

They recognized that when women staff become mothers, not only is it a beautiful, natural part of life, it’s also good for the economy because every newborn adds to the workforce of the future. In fact, women were encouraged to get pregnant and have as many babies as possible.

This sounds cold (and it is), but to the extent that companies need a “business case” for babies, this was a great one. When you look at our present labour conditions, it makes a lot of sense. You’re probably aware that in most of North America and Europe, populations are aging rapidly. As this article states: “Statistics Canada estimates that even with increased immigration, an aging population is unavoidable over the coming 50 years…between 2049 and 2058…Canada can expect more deaths than births.”

So the companies who believed that women having babies was good for business could be described as "long-term strategic thinkers".

When was this liberal, open-minded time in our history?

The U.S. Antebellum Period, from roughly the late 1700’s / early 1800’s to 1861 (the start of the U.S. Civil War). This era was noted for the thriving wealth of the U.S. south. Of course, you know what else was thriving at the same time: slavery.

ID: Illustration of slave trader selling black slaves to white men at a slave auction.
ID: Illustration of slave trader selling black slaves to white men at a slave auction.

Disclaimer: At this point I feel the need to state very clearly that I am not praising or condoning slavery, nor any “business practices” of the slave owners and plantation managers. (I hope this is obvious.) My point about slave owners wanting and often forcing their female slaves to have babies is not a compliment on their maternity leave policies (they had none).

Rather, I think it’s important to examine the way companies then and now view women labour (enslaved or employed) from an economic perspective, and how this subsequently impacts their mindset on, and treatment of, maternity and working mothers.

First, some caveats:

  • While paternal leave is applicable to women and men, my focus here is on women specifically, as the primary people group who give birth, and as the historically oppressed people group when it comes to paternal leave and working while parenting.

  • I recognize that anyone with a uterus can give birth, and they may not necessarily identify as a woman. I still refer to women only throughout this article, purely in reference to the historical and ongoing treatment of the majority of, but not all, people who have babies.

With that said, let's look at capitalist mindsets around employees of all genders including women.

Employees as Assets: Human Capital

I started this article by stating that Antebellum businesses wanted their women slaves to have babies, but this was obviously not out of empathy or human rights. It’s sad but true that slave owners valued their slaves highly because they were property and not people. When plantations acquired slaves, they were literally investing in human capital. As property, these slaves were financial assets which could appreciate or depreciate like land and buildings.

In true capitalist fashion, plantation managers cared for all their property only to the extent necessary to extract maximum production and profit from them. Arguably this meant the actual land and buildings were treated better than the human slaves were. I don’t need to tell you about the atrocious way the slave owners treated the enslaved, you can read about it in any honest account of history. Perhaps less well-known are the surprisingly sophisticated ways slaves were financially measured and tracked.

In her book “Accounting for Slavery: Masters and Management”, Dr. Caitlin Rosenthal provides an in-depth account of the way the plantations and businesses of the Antebellum period were the first mega-companies which operated very similarly to the scientific management practices of Frederick Winslow Taylor and his contemporaries. In 2022, we don’t talk about slavery as part of business history, and we definitely don’t connect slave-masters to today’s people managers. We want to believe plantation owners were ignorant racist hillbillies who enslaved people out of hate. In actuality, the slave-driven sugar and cotton plantations in the Caribbean and U.S. are comparable to any modern-day industry, with some very sophisticated leaders who creatively maximized profit. Slaves were the generally accepted, normalized labour force of their day, completely in line with the ideals of economic efficiency and mass production.

Let me reiterate again that I am not endorsing slavery nor the “management practices” of slave-owning businesses. Quite the opposite. The fact is, I believe we need to face the uncomfortable truth that when it comes to business, plantations valued enslaved labour as property more than today’s companies value employees as people.

(Human) Capital Appreciation

We see this in the coldly capitalist and racist way “enlightened” bookkeepers and plantation managers "invested" in human capital and calculated returns. The most cost-effective way to increase slave capital was through human reproduction. In her book, Rosenthal explains that:

“Thomas Jefferson calculated the supplemental income he earned from the reproduction of his slaves…[at] 4 percent profit through the birth of children. British traveler and naturalist Robert Russell offered a range for the returns from reproduction, estimating that planters earned 'from two to six percent throughout the cotton region.'”

Of course, babies and toddlers were not useful as workers. This was also reflected in the more sophisticated methods of calculating capital appreciation. Some bookkeepers assigned higher inventory values to slaves as they grew into adulthood, and reduced their value as they aged into infirmity.

Physical decline was not the only way slave values depreciated. As with physical property, resale value was a critical consideration, so the marketability of slaves was always a concern. Rosenthal records instances of reduced sale prices for slaves with unfavourable characteristics, such as: sulking, illness, infertility, and worst of all – running away.

Enslaved people were far from ignorant of their perceived financial value. In her book “Biography of an American Bondman, by His Daughter”, Josephine Brown writes:

“As the slave becomes enlightened, and shows that he knows he has a right to be free, his value depreciates. A slave who has once ran away is shunned by the slaveholders, just as the wild, unruly horse is shunned by those who wish an animal for trusty service.”

Employees as Expenses: Human Resources

The treatment of enslaved people was clearly despicable. In no way am I saying that viewing slaves as assets makes slavery OK.

However, it's interesting to observe what happened when companies took a long-term view on the ROI (return on investment) of labour. It’s unfortunate that businesses had to legally own people to recognize their long-term business benefits, but that’s what happened, because the companies received the benefits directly. Black people held no value as human beings, but were greatly valued as capital purchases.

It makes me wonder how differently today’s companies might treat their employees if they also saw employees as “capital assets”, rather than annual expenses which reduce net income.

ID: example income statement with operating expenses and Salaries and benefits expense highlighted.

Here’s an example financial statement to illustrate. On the income statement, employees show up under operating expenses, i.e. an outflow of cash.

(ID: example income statement with operating expenses and Salaries and benefits expense highlighted. Source: BDC.)

ID: example balance sheet with current and fixed assets.

Employees do not show up as assets, i.e. resources that may generate future economic benefits.

(ID: example balance sheet with current and fixed assets. Source: BDC.)

Of course, there’s good reason legally and morally why employees aren’t recorded as assets on the books: companies cannot own people! (Nor am I saying they should! I’m not advocating for a employers to adopt a slave-master relationship where they “own” their employees.)

I am saying that by not recognizing employees as company assets, employers are discounting the long-term future benefit that employees can bring. Rather than treating the economy as multi-generational and holistic, where people and planet as a whole are affected (positively or negatively), capitalist businesses are only willing to invest when it benefits them directly, without regard to the wider impact. They only care about ROI if it boomerangs back to them.

A Social Balance Sheet

I’ve tried to imagine what a social balance sheet would look like. What if people were assets, including babies and children, not because they’re property, but because they bring great benefit?

ID: Black & white photo of baby cradled between two pairs of hands.
ID: Black & white photo of baby cradled between two pairs of hands.

Every time a baby is born, we would rejoice in our collective present happiness and our hope for future benefit.

Every financial cost – food, clothing, education, training, healthcare, infrastructure, housing – would be an investment in “assets” that grow over time and bring future benefit to society as a whole.

Every hour spent teaching, mentoring, caregiving, and building community, would add to the longevity and value of these long-term “assets”.

Q: How do you calculate the social ROI when today’s financial costs are tangible, but the future benefits mostly aren't?
A: You don’t.

One result of this fractured economic model is that families are paying the high “capital cost” for labour (childhood and elder care), while companies pay the lower “maintenance fees”.

Investing in Women: Maternity Leave

This is most visible in how maternity leave is handled. Companies are only willing to pay salaries to women while they're “working”, i.e. producing output that contributes to company profit. By this definition, taking time “off work” to have a baby is not productive and therefore not worth paying for.

So how are mothers supposed to live? Not only have they lost their income, they’ve gained a ton more expenses in raising a child. Even after returning to work, their salary hasn’t increased but their expenses have.

And for all of you thinking “well they should be married/partnered with a second income to support the child” or “in countries with government assistance, they still get money while on mat leave”:

  • There are plenty of single mothers/parents, and being partnered should not be a requirement to have a baby

  • Even if they are partnered, it doesn’t mean their single income is sufficient to support a family, especially in today’s economy

  • Government assistance is nowhere near sufficient to cover the financial needs of the mother and/or family

  • This kind of sexist/patriarchal/outdated thinking diminishes and ignores the psychological well-being and needs of the mother beyond finances, e.g. self-actualization, job fulfillment, sense of purpose, etc.

If babies were assets on the imaginary social balance sheet, all the costs are being borne by the parents, while companies get the future economic benefit of their labour.

People = Assets paid for by families | Employees = Expenses paid for by companies

Investing in Women: Meeting Their Needs, Not Your Budget

This doesn’t just apply to maternity leave, of course. I know from my time in HR that every aspect of compensation and employee costs (like training and development) are governed by short-term budgets. Companies have tiny budgets for professional development that have not kept up with the actual costs. Accessing these budgets is intentionally difficult so as to discourage their use, with conditions added to handcuff employees to the company so they can "get their money's worth".

I was recently told by a racialized woman manager from a large private company that her boss wouldn’t pay for her ticket to a professional women’s conference because “If we gave it to you, we’d have to give it to everyone”. Which is complete B.S. They don’t have it give it to everyone, for example, the men in the office probably won’t be clamouring to attend. (For that matter, most women weren't asking to go either!)

ID: Three women of different races sit on a couch with their laptops.
ID: Three women of different races sit on a couch with their laptops.

What would it look like if companies invested in developing women based on their unique and specific gifts, instead of just applying blanket policies to them?

How much more value could women provide to society and to their employer if the company offered:

  • Women-specific professional development (e.g. networking events tailored to women executives)

  • Coaching and mentoring by women, for women (bonus points for racialized women mentoring racialized women)

  • 100% salary continuance for 1 year of maternity leave

  • Flexible work schedules as an entitlement, not a privilege

  • Company-paid childcare and eldercare

  • Paid reproductive health time off / work from home days (for menstrual pain, menopause, etc.)

  • Health insurance for women-specific illnesses, mental health, and reproductive health

  • Paid self-care days and activities, e.g. yoga, spa days, etc.

If we don’t learn from the past, we are doomed to repeat it

ID: An 1860 slave schedule belonging to John Oliver Wood, which includes four enslaved people: one man, one woman and two boys.
ID: An 1860 slave schedule belonging to John Oliver Wood, which includes four enslaved people: one man, one woman and two boys. Credit: "Slavery And The Making Of Alberta", by Bertrand Bickersteth, The Calgary Sprawl.

The future of work will not be the same as the past. When emancipation happened in the U.S. and slavery supposedly ended, it was the biggest “labour disruption” at that point in history. And as with any labour disruption, the affected businesses complained:

We have to start paying [people] just to do their jobs? That they’ve done all along for free? Who do they think they are!

We have no budget for that!

This will bankrupt us. We’ve already been hit hard by the economic devastation these last few years, now you want to ruin our finances even more?

I wish everything could just go back to normal.

Sound familiar? These are the same complaints companies are making now, post-COVID. We experienced a major labour disruption that has drastically changed the way companies engage with employees, but companies are resisting the change.

So should we see employees as assets, or as expenses?

Neither, at least financially. People aren’t property that can be controlled and owned, nor are they purely a drain on company cash.

If we truly want to have better workplaces that value all employees as people and not just producers, we need to take a holistic view of our social ROI, not just financial ROI.

And the more that employers invest in their employees – even if the ROI doesn’t boomerang 100% back to the company – the more valuable and productive people will be.


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