A company’s decision to employ a person can be viewed as an investment-decision. A decision to educate or train an employee to improve his or her skills can also be regarded as an investment-decision by the company.
All investments involve risk. A successful investment can gain considerable profit for the company, and it constitutes a valuable asset. The company therefore has an interest in protecting its investments. An asset which from one day to another can vanish from the company or – which is worse for the company – can be transferred free of charge to a competitor provides a high risk. If, on the other hand, an investment for some reason proves to be a failure in one way or the other, the company usually wants to reallocate its investments as soon as possible to reduce its losses. An investment which is not profitable or which generates losses provides a high risk, when the company has few options to bring the investment to an end.