Recently a client was struggling with two related issues: 1. How much to pay his employees and subcontractors, and 2. How to manage his accountant who regularly arrived late for scheduled meetings.
I suggested that he should bill the accountant at least $1.00 per minute that he is late.
“Huh?” He asked.
Then I reached into a day timer and showed him the following image. (I tried to find a better image online but was not successful.)
The column headings are Salary year/ Salary week/ Benefits= 40% Total salary/ Total week/ Value per hour/ and Value per minute.
For instance, if your salary per year is $70,000, your Salary per week is $$1,346, your Benefits are $538, your total week is $1,885, your Value per hour is $47.00 and your value per minute is $0.79.
So why wouldn’t you charge the accountant at least $1.00/ minute for being late? His tardiness is 1) expensive and 2) unprofessional. I urged him to charge a retroactive late fee. And I referred him to other accountants.
The second question is more complex. How much should you pay employees and subcontractors? The market response is “as little as possible, according to their value.” That is why we pay minimum wages and low salaries for remedial work.
For most business leaders, we are slow to pay others for remedial work.
The best business leaders, however, ALWAYS delegate low paying tasks to others. And they refuse to do remedial work.
Back to my client. I asked him, “So, what do you think your time is worth?”
He said, “At least $70,000/ year.”
I said, “OK then, why aren’t you excited about the opportunity to pay others $10-24.00 per hour to do work for you?”
And that, of course, led to a deep conversation about self-worth and the need to delegate low paying tasks to others.
So, what is your time worth?
Perhaps you have seen this chart from Q4, 2012? This data amazed me.
The red line indicates corporate earnings, which are at an all time high.
The blue line indicates individual wage earnings, which are at an all time low.
The gap between these lines is one indication of low engagement by most workers.
IMHO we need more professional development of key talent. Companies have the cash assets. Individuals have the need.
What does this gap suggest about the need for professional development at your company?
What does this gap suggest about the proliferation of outsourced specialized roles, such as external coaching and consulting? (Some 40% of the American workforce…)
I need your help. I am part of that 40%.
Since 1997, I have guaranteed results with coaching and consulting clients.
Please give me a call and let me know how you are doing. 704.895.6479. Thanks.
Jim Rohn, the great business consultant and philosopher, tells a story about his childhood. You may like this story…
As a boy Jim learned that he had two choices:
1. He could work for others and earn a wage. As an employee. For as long as he was able.
2. Or, he could develop himself and his team, and earn a profit. As a small business owner. And earn profits. For as long as he was able.
He could have learned about these choices at any age. He could have been your age when he learned about them. Jim quickly realized that earning a profit would lead to wealth. He embraced choice #2. Here are some reasons why you should do the same:
Personal development leads to wealth.
Self education leads to wealth.
Professional development leads to wealth.
The small business owner with the strongest team is the wealthiest…
Professional coaching and consulting with me is guaranteed to help you make profits.
And profits are better than wages.
So call me now. At 704.895.6479.