$1,000 for a meeting? How to calculate how much time at work is really worth

Fast Company

3 days ago

Your time spent working has a real dollar amount attached to it. But I often find as a time management coach that people don't think about the 'expense' of their daily work activities. If they did, they likely would be much more hesitant to spend the equivalent of hundreds of dollars a day on things like email.
If you're curious how much your time is worth and how to use that information to make choices about what you do and don't do on the job, here are three simple steps you can take today.
Calculate your hourly rate
In some professions, the value of your time is pretty straightforward to determine. When you bill clients per hour or get paid at an hourly rate, you know exactly what your time is worth. Making these calculations is a little bit more difficult in other situations, but not impossible.
For example, if you have a salaried job with paid vacation, this is how you figure out the value of your time:
Multiply how many hours you work per week by the number of weeks in a year. So for example, if you work an average of 45 hours a week, then you would multiply 45×52 to get 2,340 hours per year.
Then you divide your annual salary by those number of hours. So if you make $75,000 per year, the hourly rate would end up being about $32/hour.
And finally, if you get paid by the project, you'll want to take your project fee, subtract expenses like materials, and then divide the remaining amount by the number of hours it takes you to complete the project. So if you got paid $1,000 for a project, had no expendable materials, and spent about 13 hours on it, then your hourly rate would be around $75/hour.
Evaluate your time spend
Once you've calculated how much your time is worth, then you can start to evaluate your daily time choices through that lens.
For example, maybe you have a mix between messages, tasks, and meetings throughout your day. If you find yourself frequently sucked into email, Slack, or other inboxes, ask yourself what percentage of your daily budget you think that communication is worth. Then try to limit your time in that area, such as I only give the equivalent of $250 a day to communications.
Or if you notice some tasks on your list are time-consuming but not super high value, you may want to consider delegating them to someone else. If your time is worth about $60 an hour and a task takes five hours, that's $300 of time. But if you're paying an entry-level employee $15 per hour, that same task ends up only costing $75. For you to do the task might not make sense.
And finally with meetings, you'll not only need to consider your hourly rate, but also the hourly expense for each additional person in the meeting. Depending on how many people are attending and their particular level of compensation, a single meeting could 'cost' $1,000 or more. By starting to look at meetings through this filter, you can better determine whether or not you should go to meetings, as well as when you're hosting, how many people really need to come, and how long the meetings need to be.
Don't forget the opportunity cost
Finally, to most accurately assess the value of your time, you'll need to determine not only your hourly rate, but also the opportunity cost of spending your time in different ways.
This varies quite a bit depending on your compensation structure. But here are a few examples of ways to consider the financial opportunity cost of different time choices.
If you're in sales and choose to fill your calendar with current client meetings to the point that you don't have enough room for meeting with prospects, your client meetings could be costing you thousands in missed opportunities for sales commissions.
If you own a business and only focus on day-to-day activities without investing in business development, those routine tasks could be at the expense of large amounts of unrealized business growth.
If you've been told that you need to hit certain goals to receive a promotion or bonus, and you spend your time in areas that don't allow you to hit those goals, then you're missing out on all of that potential compensation.
There are certain activities that you need to do for your job no matter what. But if you evaluate how you're spending your time with the mindset that every hour has a dollar amount attached to it, then you can make better choices on how much time you spend in different areas of your work as well as whether certain activities are even worth your time at all.