More than providing a good or service, companies are in the business of making money. For that reason, companies have budgets and financial statements that are continuously monitored. Since payroll is such a large expense for most companies, conversations are ongoing about who to keep, who to hire and who to let go. Finding a way to show how you positively impact the financial statements of your company is one way to promise continued success in your career. In other words, learn how to quantify your impact. Most employees aren't able to review the financial statements of their employer, so a simpler assessment is: How do you help the company reduce costs, or increase revenue?
Most of my career, I have either been a consultant or on the sales team, so it was relatively easy to track how my work impacted revenue. As a consultant, I had an hourly rate for my work, so if I billed the client a certain amount of hours, it would lead to a defined amount of revenue for the company. Sales was very similar; I knew how much revenue I was generating for the company by looking at what I sold. In both cases, I could also see how much revenue I was generating in relation to my peers. So, determining my impact on the bottom line was easy to calculate. There are still other factors to professional success, like team interaction and task-based work efficiency. But overall, my impact on revenue generated was most important to my review, my compensation and my overall success.
How To Quantify Your Impact In Any Profession
Even if you are not on the revenue-generating side of the business, there are ways to calculate your value, or quantify your impact. For example, let’s say you are a safety inspector and you have developed an innovative way to reduce the number of accidents on site. If your company has been around for any number of years, they have a dollar amount that they have assigned to each type of accident. The company knows how much something as simple as a slip and fall could cost them, as well as those accidents that are more serious in nature. If you can show how your efforts have led to a reduction in these accidents, then the company can calculate the value of your efforts.
Perhaps you are a factory worker and you figure out a more efficient process for building the company’s product. The reduction in cost has a direct impact on profit. The company can do the calculations for the time efficiency, and then have a measurable dollar value for your idea.
Or maybe you are not the innovative type, so you shift your focus to cost-cutting measures that allow the company to reduce the amount on budget line items without sacrificing results.
Let’s say it is your responsibility to coordinate marketing events for the year with the single purpose of creating brand awareness and generating leads. Typically, you might put on the events and just focus on the number of leads generated, and then try to track which leads created opportunities and which ones led to deals that closed, etc. Everyone in marketing with a responsibility of generating leads does that, but it isn’t an accurate picture of your value as it relates to the budget.
There probably are a certain number of events, and a certain planned dollar amount in the budget for these events. If you devise cost-cutting measures for the same number of events without sacrificing the volume of leads generated, then you can quantify the value of your suggestions. Depending on your company’s size, that number may be small or large. Understanding budgets helps you quantify the value of your efforts.
Why Quantifying Your Impact Will Benefit Your Career
Whenever possible, you should look to assign an actual dollar amount to your activities, responsibilities and results. Once you are able to quantify the impact your work has on the company's bottom line, do not be afraid to let others know. Assigning dollars to your efforts and accomplishments isn’t something individual employees do often, especially if not on the revenue-generating side of the business. However, it is beneficial to be able to do it.
The misconception that many people have is that their perceived value is all about how well they do their job. That is simply not true. This is evident when you see employees with great performance reviews relieved of their duties. Management is constantly evaluating your value as it relates to the bottom line. So simply put, when they are making personnel decisions, they are trying to determine if the company will be more or less profitable with or without certain employees.
If you want to increase your job security, you do good work. But more importantly, it's crucial to make sure that management understands that the company will be more profitable as long as you are on the team.
Originally published on December 31, 2017 by SpeakerMatch Speakers Bureau