John Borrowman, CPC
Borrowman Baker LLC
If I’ve heard it once, I’ve heard it a thousand times: “What am I worth?”
Everyone wants to know. The amount that shows up in the paycheck is one way we value ourselves. Can it be any surprise that someone in the business valuation industry would ask that question?
One way to consider the answer is in the framework of fair market value. Think about selling your used car. You can check prices (comparables) on the Internet and your local paper. You can get out your NADA book. But you never really know what that car is worth until you put a sign on it, offer it to the market and find a willing buyer. The same is true with your own talent.
Whoa, you say. I’m not ready to go that far. Isn’t there something I can do short of that step?
There’s enough variation in the way BV practices operate that the same person can be worth X to Practice A, and 1.23X to Practice B. Let’s face it: your ‘worth’ is a function of your value to your employer. That might be the more productive place to look.
Your value is driven by both objective and subjective considerations. Knowing what they are and how to leverage them can help you increase that value. On the objective side, employers are interested not only in the billable hours, but the profitability of that revenue stream. Business valuation offers opportunity to improve workflow through more efficient use of models and templates. Encouraging and contributing to improvements in these areas can raise your value simply by allowing you to accomplish more in less time.
Often, Owners and Partners will apply a multiple to compensation in order to arrive at the revenue expectation for a given position. A candid discussion with them about that expectation can reveal ways for you to negotiate improved compensation when you have a demonstrated rise in productivity and profitability. Consider, for example, a “stairstep” bonus that rises as the total number of billable hours increases.
Credential-driven training is key to raising your value. The more of your boss’s job you can do, the more can be handed to you, thus dropping the overall cost to the client while upholding the rationale for higher Partner level rates. Training is not without its own costs, however. Be prepared for the boss to consider this an investment from which dividends are expected.
The subjective side of the equation is the most difficult, naturally, to calibrate. Ironically, it’s that difficulty which drives the search for value in compensation. Generally speaking, the more satisfied employees are, the less focus they have on the money. Or, said another way, the more willing they are to consider the paycheck only as one part of a much larger package.
Initiative is a characteristic that can make one person stand out over another. The readiness to take on any assignment. The eagerness to take on more and bigger assignments. These elements can make the difference between a so-so pay raise and a real bump. This is no more true than when it’s time to flex that business development muscle. The only route to the top requires revenue generation. There comes a time when, in the absence of progress on that front, the earnings curve flattens.
Don’t overlook the possibilities inherent in helping others increase their own productivity. No matter where you are in the food chain, there’s probably someone (an admin person, perhaps?) you could contribute to. A willingness to share knowledge and experience with others is a hallmark of the BV industry. Just as with your boss, the more that the person who supports you knows, the more productive you can be in turn.
Be careful not to get hung up in questions about your worth. Concentrate on your value and the worth will take care of itself.