Do You Really Know What Your Time Is Worth?

Our friend and client, world-class sales trainer John Barrows, wrote a post a little while back called "Know Your Hourly Rate." It was simple but profound (as most profound things are). The core of the concept is this:

If you make $200,000 a year, and you work 2510 hours per year (based on 10-hour days), then your hourly rate is around $80. You can then use that as a filter for how you spend your time. You ask yourself “Is this $80/hour work?” And if the answer is no, you delegate and/or find a tool that can automate it.

But the application of this idea can go even further.

First, let’s tweak the formula for the $200k/year executive. John is a machine and gets in his 10+ hours a day, but the average person may not (at least on average). Using the tool referenced in the post, the actual productive working hours in a year is likely closer to 1900 (assumes 8-hour days, 8 U.S. holidays, 10 PTO days, 5 sick days, and 2 personal days). This does not take into account unproductive time during a normal 8-hour work day - Facebook, online shopping, etc - but that’s harder to quantify so we left it out.

Given those assumptions, your hourly rate is closer to $105. Here’s a table to show what yours might be:

Yet again, we can take it further! Out of those 8 productive working hours each day, how many of those are spent on tasks that are actively growing the business versus administrative odds & ends (like scheduling, research, logistics, etc.)? Again, hard to quantify, but it’d be hard to argue more than 6 of those hours are dedicated to applying your unique talents to improve the business.

{Side note, that wasn’t really hypothetical. 33Vincent has been creating hours out of thin air since 2013, helping clients spend their hours to their highest and best use.}

This framework applies to the hiring process as well. You should always think about the real hourly rate of the people that work for you, including the hidden costs like taxes, benefits, office space, & equipment. We created an infographic, which illustrates what this would look like for an executive assistant, as it applies to our company...but you can, and should, do this for every position in your organization. It’s about constant improvement, and high-quality outsourcing and delegation has arrived as a viable strategy to grow your business. Here’s to your growth in 2016!