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Are You Working Below Your Pay Grade?

So many entrepreneurs wear so many of the hats in their business that they lose sight of the fact that many of the functions they carry out are at a level that is way below the real value of their time. By failing to hand off menial tasks they are, effectively, working way below their pay grade.

Effectively working? Hardly! The problem, of course, is that they aren’t working effectively at all.  Many small business owners have to be the chief employee as well as the entrepreneur, and it is all too easy to get dragged down by the tyranny of the urgent and lose sight of the fact that they are carrying out tasks that should be handled by somebody paid considerably less.

There are a number of problems that need to be considered here, but the start point is to establish the value of your time.

There are several different methods for doing this:

Cost-plus. This looks at what you are actually paying yourself and factors in all of the fringe costs (payroll taxes, 401(k) etc.), and hopefully some of the overhead. This is a ridiculous concept that has, at its core, a self-defeating circularity. The more time you spend doing tasks that don’t have big-picture potential the less you will be able to afford to pay yourself and the less your time will be worth.

Opportunity cost. This looks at the value of your time if it was spent on the most important aspects of your business rather than on the mundane aspects that tend to mire owners in unprofitable behaviors. Anybody who has read anything else I have ever written knows where I am going with this and will quickly appreciate that the opportunity cost approach is the only one that makes sense if you are serious about growing your business.

So how should an owner put a value on the opportunity cost portion of their time? Unfortunately this is anything but an exact science but the effort involved in making the calculation is well worth it if any progress is to be made in dealing with the time management inefficiencies that lie at the core of so many small business issues.

In making the calculation, think about what you do that contributes most to the success of the business. Does it match your core ability and do you have a passion for it? Eliminate, for a moment, the trivial tasks that clog up your day and think about what you do that has the greatest impact on:


Increasing top line revenues $
Closing new sales $
Customer retention $
Improving Gross Margins $
Increased Productivity $
Improved Profitability $


Planning - Strategic, Marketing, Exit $
Acquisitions and Disposals $
Developing New Products and Services $
Identifying New Markets $
Building Equity in the Business $

When you focus on these CEO activities, what value do you create? What is the value of your time when you are engaged in these activities?

I have seen business owners put the value of their time as low as $125 an hour. While that may be true for much of how they actually spend their time, their value when they carry out CEO activities is much higher.

In thinking about this, it is important to remember that none of us work at our most productive level all the time, and in going through this exercise is important to remember that we are only talking about the value of our time when we are at our most productive.

Depending on how effective you are, the value can be $500 an hour or more. The important thing is to calculate a number that you feel comfortable with. When you have that number, even if you put it lower at, say $300 an hour, think about what percentage of your time is actually spent working at that level.

As you go through your day you will find yourself performing tasks that are below your pay scale. Start to identify those areas and think about how they could be performed by somebody else at considerably lower cost, freeing you up to work on things that really have an impact on your business.

I find that people who have been to my Time Edge events play back the phrase  "Working Below Your Pay Grade" all the time. It has given them a language to define what belongs in their day and a technique to identify what to eliminate.

An attendee that I saw at a networking event a couple of months after he came to a lunch and learn with his father told me that he found that his father had committed to pick some people up from the airport during "prime time" - three hours at $450 an hour. The son called him out on it and accused him of "working below his pay grade".

The father got a car to pick them up at a cost of $220 and gained time worth $1350. The return on that investment works out at over 600%!


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Time Management Tips

  • When somebody interrupts you when you are busy, don't let them interrupt your train of thought. Ask them to come back and see you at a specific time – you may be surprised that they actually figure out the answer and don't come back to ask you.

  • Everybody has about three hours during the day when they are at their best. Figure out what your "Prime Time" is and then plan your day around it. Make sure that you dedicate that time to focus without interruptions on the activities that are of most value to you.

  • It is all too easy to waste time on phone calls. Keep an egg timer next to the phone to keep track of exactly how long you are talking. It will keep the time you are spending in the forefront of your mind and will help you handle the call more efficiently.

  • Never go to the bank to deposit checks, it is a Time Bandit way below your pay grade, and claiming it is therapeutic and gets you out of the office is deluding yourself. Send somebody else!  Better still, get a check scanning machine...and make sure the bank pays!

  • Organize your office so the door isn't in your immediate line of vision. The big payoff is that people can't appear at your door, hover, catch your eye and distract you. If you make it harder to interrupt you, people may figure out answers themselves rather than asking you.

  • When you have to give out an e-mail address to somebody who's going to send you things you don't want in your inbox, give them a special "junk" e-mail address. Then set up a rule so that everything to that address goes to a folder you review on your timetable.

  • When somebody interrupts you to ask you a question always reply with a question back. Ask them how they would deal with it, and make them think proactively rather than just relying on you. A good technique is to ask: "If I wasn't available today, what would you do?"

  • If your key customers expect you to answer the phone at all times, get an Internet phone line and give them a "VIP" phone number to call. Set it up with a unique ring on your system and you'll know that calls on that line are from your most important customers.

  • Most people have a “To Do” list to record the tasks they need to "Get Done", but it doesn't help identify what you shouldn't do yourself. For that you need a “To Don’t” list. Identify the culprits, put them on the list and defend your time by assigning them elsewhere. 

  • E-mails have overtaken the phone now as the most dangerously effective of all Time Bandits. Turn off your e mail alert and check your e-mail only four times a it on your schedule not the schedule of the people who are interrupting your more productive work.

  • E-mails have overtaken the phone as the most dangerously effective of all time wasters. The worst thing is the e mail alert that pops up on your computer screen. Don't let other people interrupt you in this way and take back control of your time by turning the alert off

  • When somebody interrupts you while sitting at your desk, stand up. It changes the pace of the interaction and sends a message to the interrupter that they have invaded your time. The more you can send this message, the more effective you will become at protecting your time.

  • When somebody comes to you with an issue they should figure out themselves, don't allow yourself to relieve them of the burden and take it on yourself. Instead of saying "leave it with me" when this happens, say "never delegate upwards" and ask them for their solution.

  • Entrepreneurs wear so many of the hats in their business that many of the tasks they carry out are at a level way below the real value of their time. Are you working below your pay grade by not handing off menial tasks that should be done by others?

  • When you are hiring new employees, ask candidates about their time management abilities. The best employees are those that can prioritize their work and handle interruptions, so be sure to ask relevant questions to probe in those areas so that you hire somebody who has those skills.

  • Email has become a huge time-waster and taking control of your Inbox is becoming more critical than ever. The ideal state is only to have things in your Inbox that are important, urgent or time sensitive, and to put everything else automatically into folders using Rules governing what happens when they come in. I’ve been using Outlook Rules for a number of years to sort specific topics, but I recently came across a new rule that makes a dramatic difference.

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Did you know ?

Most people have a “To Do” list to record the tasks they need to "Get Done", but it doesn't help identify what you shouldn't do yourself. For that you need a “To Don’t” list. Identify the culprits, put them on the list and defend your time by assigning them elsewhere.