How To Calculate How Valuable You Are To Your Boss

180: How To Calculate How Valuable You Are To Your Boss [Podcast]

by | Jun 16, 2020 | 0 comments

How to calculate how valuable you are to your boss. Sounds like a big promise? Does it sound like math? Both are true – but I can handle the promise and the math is pretty simple – so you can handle it. 

While we measure value in a lot of different ways, the most powerful way to show value is by showing your financial impact to the company. 

You only have two reasons for being on the payroll.

  1. To make the company money. By this I mean you directly contribute to the revenue. If you are part of bringing the product and/or service to the customer, you are about making money. If you are in sales, product development, or production (you create the product or service) or have a role interfacing with the customer, you are likely revenue-generating.
  2. To save the company money. These would be people who are making the company more efficient and profitable and possibly those who keep customers coming back. Project management, much of accounting and finance, quality, safety, or any kind of other back-office administration falls in this category.

Now if you are like most people, you might be scratching your head trying to figure out which one you are. Good. We will address that now.

How To Calculate How Valuable You Are To Your Boss

The easiest way to calculate your value is to look back at what you did for the company in the past 6 months to a year. If your job has not changed much, you should be in similar shape the next six months to a year.

So here is my simple formula for this. Your goal is to bring money to the company by helping sales or reducing costs. The amount you bring has to be over and beyond what you cost the company.

So let’s start with what you cost.

After all, before you can calculate how valuable you are to your boss, you first need to know exactly what you cost. And, it is more than you think.

Your cost = Your salary + Benefits.

And by salary, I mean top-line – what you make before taxes or anything else.

Benefits are all those things you cost that you do not directly see. The company’s contributions to your 401K, insurance, your tax bill, and various other taxes and fees they have to pay to have you around. While you might not see the dollar value of all of your benefits, the company writes a real check for each dollar.

Your employer’s HR can give you a detailed breakdown. Many companies already provide this statement annually so you can see how much you cost them. They want you to know!

But if you cannot get these numbers easily, just add 25 to 30% to your salary. (If you work for a larger company with good benefits – think closer to 30%)

For example,

if you make $100,000 per year

your cost = $100,000 + $100,000×30% = $130,000.

  1. Now let’s calculate what you bring to the table. 

The easiest way to do this is to write down in words the most important things you did for the company. Use bullets and just make a list. Here is what a support engineer working the power industry wrote about what she did over the last year:

    • Did troubleshooting communication issues between substations
    • Installed software ahead of schedule (saving labor and truck rolls)
    • Located and tested new integration tools reducing equipment cost per location
    • Developed training manuals for the team
    • Reduced the amount of time to install integration equipment by a day
    • Developed and wrote new test procedures for communication testing

I like to start with words because it is easy. I call this the word formula.


Once the words are written, share them with your boss and make sure he/she agrees. They may want to make some changes to your words, and might even want to add something you forgot.


2. Now put some values to each bullet.

This is where it can get tricky, but do not get overwhelmed. Just take a good stab at it to start with.

Consider two things. 1) How much money did this activity bring in or 2) how much did it save?

In the case of this support engineer, everything she does is about saving money.

So let’s analyze her second bullet about installing software ahead of schedule.

In this case, she was saving truck roles to substations. Her company knows exactly what each truck roll costs

Saves approx. $6,000 in labor costs with early install

  Last year installed SW at five plants within three weeks, two weeks before schedule

  Total Savings =  $30,000



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Dale Callahan

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