Why do HR managers and executives always talk about their own employees as a resource? Let’s clear it up! In this article, we show you the different types of resources and why “human resources” are the most important of all.
Why People Are the Most Important Resource in the CompanyAnnalena Simonis, Monday 22 February 2021 | Reading time: 6 min.
What do you think of when you hear the word resource? Perhaps natural resources in the form of oil or gold, hidden in the earth beneath our feet. Or do you have a project budget in mind that is running low? We've all heard phrases like "our resources are depleted". However, in HR, phrases like "we need more resources for our software engineering team" are also quite common. During the planning process, it’s not unusual to rate the capacity of an employee in percent: "This IT resource has an availability of 30-50% for the project." How can you schedule half a person for a project? Many employees feel uncomfortable by the idea of being lumped together with material resources like money or machines under the umbrella term "resource." In this article, we’ll clarify the question of whether and how to distinguish material resources from people.
1. What is a resource?
In this article we will only deal with the resource from a business point of view. Therefore, the definition for resources in a company is:
"Resources are inventory and means that serve specific goals and purposes, such as the creation and provision of products and services.""
Thus, a resource can be anything that is needed for a specific purpose in the economic production. To get an overview, there are different approaches to categorize and distinguish resources.
2. What are the different types of resources?
Companies generally distinguish between human, material and financial resources. If we leave the perspective of the company and look at resources from the point of view of the individual employee, we distinguish between internal and external resources.
Internal resources are also referred to as personal resources. They are assigned to a specific person and can be influenced intrinsically. They include, for example, one's own moral values, character traits, experience, education, personal interests and abilities.
External resources include all things over which the employee has no direct influence because they are controlled externally. They are divided into three subcategories:
- Social resources describe a person's network. This includes all people in a person's social circle. Family members, partners, friends, neighbors or coworkers can become unexpectedly "useful" contacts. It is not for nothing that networking is considered one of the most important disciplines in the modern business world. Good relationships can create opportunities and are therefore a resource that should not be neglected.
- Material resources include all tangible means that can be imagined in connection with a company. They serve as tools for the implementation of projects and influence their success. Material resources include all machines, land, technical equipment and materials that make the work possible in the first place. Financial resources such as money and assets can also be counted as material resources.
- Finally, the infrastructural or institutional resources are also very important. They cover all local aspects of the working environment. As an example, they include an adequate workplace, easy access to public transport or a reliable internet connection. You’ll notice: These types of resources also have a high impact on employee performance.
When it comes to planning, you can usually rely on a material resource such as a printer, a vehicle or software. It is assumed that it will work as planned. With a human being, this is only possible to a certain extent. The time a person invests in a project does not automatically equate to the performance they deliver in that time. The individual commitment of the human resource can be seen as a weakness. At the same time, however, it is also their greatest strength.
3. The human being as the most important resource
In our daily work life we talk about the department, the employee or the team members. Why do we lose the human element in the planning process? In a company, people are considered a human resource. Each individual can draw on his or her own portfolio of personal resources. This includes "the totality of knowledge, skills, attitudes, personality traits, talents, relationships, networks, etc., that are the capabilities available to a person." (Source: University of Applied Sciences Northwestern Switzerland). In the corporate context, this is also referred to as the know-how and soft skills of an employee. Material resources such as technology, software or financial resources are only tools for the implementation of actions. Humans are indispensable for the successful use of immaterial and material resources. It is therefore not uncommon to speak of the human factor, which is the most influential factor in key situations. Every employee has their own individual skills and abilities that can be used in the corresponding project phase. In order to be able to use these skills in an unbiased manner, the human being is therefore objectified as a resource in the planning phase. However, this does not diminish the value of the individual. As an employee, it is important that you know your own resources. What are my strengths? In which situation do I feel most comfortable? What are my most important characteristics? Knowing your personal resources gives you confidence. You know which existing skills you can draw upon and which helps you tackle an task.
4. Conclusion: Tips for managers
People are the most important resource in your company. In personal conversations, you may want to refrain from using this term to avoid making the other person feel as if they are merely a means to an end. It is much more important that you, as the team leader, take the time to get to know everyone on the team. This will enable you to gain a deeper understanding of your employees and perhaps recognize an unknown potential or two that you can use as a resource in future projects.