How's Your Return on People?

Deep down, managers can't shake the feeling that employees are costs. And they treat them that way. Recent studies suggest that layoffs actually destroy shareholder value. And research shows that treating employees like the assets they are - by investing in their development - boosts returns over the long term. In December, a live portfolio was created of companies that spend aggressively on employee development. In its first 25 months since inception, that portfolio has outperformed the S&P 500 index by 4.6 percentage points.