Are you investing your time wisely?

Do we understand the value of time?

How often have you heard the phrase “time is money”? The commonly used expression emphasises the value of our time in economic terms. It conveys the message that our time is a finite resource that should be valued and used efficiently. However, how many of us understand the value of our time?

Decoding your value

Most of us have a view of what we are paid (whether that is enough or not is a topic for another day!), and some of us may know what our hourly rate is. Most employees know what their companies do and how much profit or turnover the company makes each year. But how many of us understand the correlation between our hourly rate and the turnover the company needs to achieve to cover that cost?

For some, keeping abreast of the company’s financial statements and share price might be a regular pastime, for others it falls lower on the priority list. However, regardless of individual inclinations, all employees should have a fundamental understanding of what drives their company's profitability and the role they play in contributing to its success. Recognising the factors that lead to profitability empowers employees to make informed decisions and align their efforts with the organisation's goals, fostering a sense of ownership and engagement in their work.

for every hour an employee dedicates to their work, the company must generate a staggering £500 worth of turnover just to pay their salary and keep the lights on.

Picture this, as employees we have a clear perspective on our hourly pay, let us say £50 per hour. Treehouse client research has shown that typically, a company needs to generate ten times that amount in turnover to be successful. This means for every hour an employee dedicates to their work, the company must generate a staggering £500 worth of turnover just to pay their salary and keep the lights on.

Freelancers and consultants have a distinct advantage when it comes to understanding their value and worth. With invoicing based on hourly or daily rates, their time holds direct monetary value. However, for salaried employees, recognising the impact and significance of each hour contributed to the company's success can be more challenging.

Is this worth my time and the company’s money?

In our previous example, we discussed an hourly rate of £50 and the need to generate ten times that amount in turnover. Now, picture a meeting with 10 attendees, each earning £50 per hour. Based on our equation that meeting alone should deliver a value of £5000. Did your attendance, along with others, individually contribute £500 of value?

While this viewpoint may be simplistic, it highlights the significance of recognising the value of your time, which often exceeds your hourly rate. It's not just time you are investing; it's a more complex financial equation where your contributions hold immense value. By understanding the value of your time and contribution, you gain the ability to prioritise and manage your time more effectively.

As an employee, your working week consists of a limited number of hours. The crucial question you should ask yourself is this: "Am I investing my hours in activities that enable me to make the greatest impact?" Contribution extends beyond revenue generation; it encompasses achieving your objectives, making a meaningful contribution to your company, and nurturing your personal growth and goals.

Maximising time and impact

Envision having £2000 at your disposal this week, where each £50 represents an hour of your precious time. Now, consider this: What will you invest that £2000 in? Which activities hold the greatest potential for contributing value to your company's success? Are there opportunities to reframe your perception of time, such as shortening meetings to 45 minutes instead of the standard hour, or 20 minutes instead of 30 minutes? Can you automate routine tasks or delegate responsibilities to others whose skills are better suited? The ultimate goal is to maximise the return on investment of your time and make strategic choices that produce the most significant impact.

But remember, life is not just about work. It’s essential to our wellbeing that life encompasses various aspects beyond work and finding that balance is vital for a sustainable and fulfilling lifestyle. Do not forget to prioritise your family, friends, hobbies, self-care, as well ample sleep, and relaxation. To be the best version of ourselves, we cannot afford to be running on empty.

Effective planning and coordination involve aligning our efforts with what truly matters, both professionally and personally, ensuring that each hour spent counts towards a fulfilling and balanced life.