Effective Hourly Rate

habits and systems · tactic

Divide your income by your hours worked, then delegate or template anything below that rate so your time goes to people.

The idea

Your Effective Hourly Rate shows how much of your week goes to work worth less than your time. Take your average yearly income over the past two years and divide by 2,000 (roughly a year of work hours). Keep the number to yourself, but ask: am I doing things below this rate? In my coaching our rule of thumb was that once your EHR passes $25-50 an hour, you should be hiring a real or virtual assistant at $15-30 an hour.

How to do it

  1. Calculate your EHR.
  2. For each recurring task, ask four questions (best done afterward): Is this above or below my EHR? Do I enjoy it? Do I do it repeatedly? Is there someone who could do it better?
  3. Apply DRY work, don't repeat yourself. Sending the same email twice? It's a template. Same steps with every client? It's a checklist. Same gift more than once? Buy in bulk. Could it be a written playbook someone else runs?
  4. Use IKIGAI as a tiebreaker: what you're good at, what you enjoy, what you can be paid for, what the world needs. Tasks outside that are candidates to hand off.
  5. Then ask the flip side: what are the things above your EHR, and how do you do more of them?

Example

When members hired help, we suggested three starter projects: managing and organizing email, buying gifts for their A-list, and following up with old leads.

Watch out for

Sources

Related frameworks

Read next

By Zvi Band. Newsletter: Your Network Starts with You. Book: Success Is in Your Sphere.