Repair or Replace? Keeping People & Property Useful
As we move forward into the age of automation, the shelf-life of education, information, and technology is getting shorter. Asset depreciation is a real concern for many businesses across the world. Employee usefulness can also suffer as business needs change with the fluctuating demands of the market. Mobile apps become outdated as hardware advances, and college degrees from five years ago don't come equipped with the skills needed in today's market.
The changing nature of business makes it difficult to determine if employee retraining would be more beneficial than hiring new workers that already have the needed skills. Technology and other physical resources could improve through repairs and maintenance, but it might be more beneficial to replace them.
In order to keep up in an automated market, businesses must consider all of their assets through a more critical lens.
Asset Depreciation: How Knowledge and Technology Age
What is the Half-Life of a College Degree?
Skills taught in college 10 years ago may not be used today. Specialized knowledge is only useful for as long as the industry requires those skills. Some skills, like methods of programming, and engineering, are becoming obsolete as technology advances and automates more of the workforce.
Knowledge is an asset, and it's constantly changing. Every day, scientists are finding new discoveries that revolutionize how we view the world. There's no way to determine how long specific types of knowledge will stay relevant.
Fixed Asset Depreciation: How Equipment Ages
The IRS accounts for depreciation in your taxes each year. This annual allowance makes it possible for you to recover the costs of maintaining your equipment through fixed asset tracking. Some fixed assets are not worth keeping around. If you find you're spending more on maintenance in a year than you would on replacing your asset, it's time to invest in some new equipment.
Is It Cheaper to Retrain or Replace Employees?
Money is not the only cost your company must consider when determining if you should retrain or replace your employees. Does your business rely on having a strong team in order to meet your clients' expectations? If so, it's going to be more beneficial for you to invest in employee retraining, as your employees are one of your most important assets.
Long-Term Human Resource ManagementNearly a third of companies hire new workers while laying off old workers in order to get the skills necessary to support restructuring. However, if your company goes through employees too quickly, you'll receive a reputation for not caring about your employees, and skilled workers will seek a career elsewhere.
Is It Cheaper to Repair or Replace Fixed Assets?
Many industries require company equipment and tools to comply with regulations. This protects workers from workplace hazards and ensures high-quality performance. The cost of repairs compared to the cost of replacement depends greatly on the asset in question. Building repairs are generally cheaper than replacing building parts and can be applied as a current tax deduction for that business year.
Asset Tracking and the Tipping Point for Replacement
Industry regulations can have a big impact on whether you decide to repair your current assets or replace them. Maintenance tracking software can help your company determine if the cost of repairs is greater than the cost of replacing your fixed assets. Tracking your assets allows you to look back on the maintenance your assets required to continue functioning. If these repairs ended up costing more than you anticipated, it might be time to replace some assets.
Maximizing the Useful Life of People and Equipment
Asset tracking is one of the best ways to maximize your employee skills and equipment. Keeping records of repair history over time will give you a better picture of your asset performance. This will give you the data necessary to decide if an asset is lasting through the expected life cycle. When done right, fixed asset maintenance is a great way to keep your people and equipment working for as long as possible. And when it comes time to invest in some new assets, make sure you find equipment or tools that will provide the best value over time instead of simply purchasing whatever is cheapest.
Fortunately, Asset Panda's customized asset tracking software makes it easy for you to track things like employee certifications for jobs which require specific skill sets. Whether you need to see what's happening with asset depreciation in your company or need to know which workers are trained in using specific types of construction equipment, for example, our platform can save you time in searching for someone who is qualified. If you already have someone on your team with the necessary skills, you won't have to spend any time or other resources in hiring a new employee. And that's a benefit you (almost) can't put a price on!