What’s Your ROI?

In business, calculating the ROI, or return on investment, is a key indicator of the success of a product or service. What is the cost of delivering that product or service and what is the return on that investment in cost. Each business line or category may have intense reviews on the cost of each item being offered, but rarely do organizations look at the ROI of specific employees. While there are metrics that look at profitability, productivity, sales volume, churn, etc. calculating the value or the return that an individual employee provides is much more loose. In simplest forms, the organization has determined your starting value as your salary and benefits. The things that you do along your career journey (and your access to opportunities) determine whether you can earn more in recognition of your increased value and contributions. 

In terms of return on investment, a company pays you this salary in hopes that your work will help provide a return on the investment into their employee,  their wage, and possibly even benefits. One common indicator that individuals can look to in order to measure their value is looking at salary. The generally accepted math in this situation is that the average employee brings in or saves the organization at least double if not three times their salary in value to the organization. Take a moment and do the quick math, what is the estimated value you bring to your organization?

At the same time, knowing exactly where your worth is within the company will allow you to navigate in a positive direction more accurately. If you are blind to your position and value to the company, this could cause you to misstep and possibly hurt your reputation with your superiors. It's a blend of knowing your place and excelling at it, and consistently showing interest in taking on more responsibility and improving yourself. Remember, even if you start at the bottom of a company, that doesn't mean you can't prove your value to the top.

Other indicators, other than salary, can include your experience, technical skills, or reputation/network. In some cases, organizations will factor these elements into their overall compensation package but not always. Let’s look at your network as a value indicator for a moment. Whether or not you realize it, whenever you introduce yourself in a professional setting, you’re promoting the organization. This is especially true if you’re a high performer. We naturally judge organizations based on the talent that they hire and in turn, each time you frame yourself in the context of an organization, you help shape their identity as well. What value is the organization gaining from your network and reputation?

It's normal to compare yourself to the people around you and although self-awareness is essential in business, we often underestimate how valuable we are to the organization and our colleagues around us. As companies look to their employees for a fair return on their investment, it might cause you to spend time thinking about your value, how a colleague may have more accolades, or a co-worker received a promotion, which made you feel like you weren't worthy. As the saying goes, we're our own worst critics, and because of this, we sometimes feel like we aren't bringing enough to the table.

So, the next time that you’re considering what salary you can truly demand in the workplace consider more than just what you’ve been paid in the past. What does your unique experience set, your credentials and education, your achievements and accomplishments, your network and professional relationships, what are all of those ‘worth’? It may not be a quick and simple calculation, but it will make it easier to come to the negotiating table with greater confidence and concrete examples on why you’re worth more than just your prior salary.