How much are you worth per minute?

I came across this old UK formula (circa 1990) of calculating the true cost of your time at work. Allowing for inflation the salary figure quoted below would be higher now. And the impact of COVID 19 means that the office overhead costs quoted below will be lower in many cases because of remote working. However, those costs can still hit the home from which you working.?

Notwithstanding these thoughts, it’s still a useful reminder that one straight salary?very rarely represents the true cost of your time at work.

?Here’s the UK formula with some comments from me in italics.

?The 1990 UK formula begins with a couple of questions:-?

• Have you ever spent half an hour searching your desk or filing cabinet for a lost piece of paper?? How much did this time cost? ( Today with the advent of e mails and sophisticated IT/AI systems, there might still by analogy be wild time-consuming searches!)
• Have you ever spent two hours doing something that you could have finished in an hour, but for the interruptions?? How much did this time cost?

You would probably cost this out according to your hourly rate of pay, but this is not an accurate figure.? A much more accurate figure is the cost of employing you.

Have you ever worked out what your time costs per day, per hour or per minute?? If not, try the following exercise.? You will find a calculator very useful here.?

The sample figures in brackets show how the calculation would go for a person earning ￡15000 per year. (The deductions for National Insurance of course are anchored in UK tax laws. Other countries will be different.)

?1.Write down your annual salary -￡15000

2. Allow 100% for overheads (i e office space, maintenance, repairs, cleaning, heat, light, phone, travel, photocopying, fax, administrative support etc)- ￡15000

3. Allow 15% of your salary in 1 for superannuation, national insurance etc (employer’s contribution) - ￡2250

4.? Add 1,2 and 3 to give you the total cost of employing you for one year=￡32250

5.Divide the total in 4 by the number of working days in the year – 230, after deducting weekends and leave, to get your cost PER DAY = ￡140

6. Divide your daily cost in 5 by 7.5 to get your cost PER HOUR (assuming that you work full time)-￡19

Compare this cost for ￡19 per hour with the amount that a person on ￡15000 a year is actually paid – about ￡7.50

7. Finally, divide your hourly cost in 6 by 60 to get your cost PER MINUTE -32p

Now that you know the true cost of your time, think again!? How much does it actually cost when you spend half an hour searching for a piece of paper?? (Or navigating an IT system!)

Back to the future!!

www.qedworks.co.uk

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