Bill Abbate

Do you ever worry about your job, as in not having one, being laid off, or otherwise losing it? In today’s business climate, anything is possible, and some worry may be warranted.

How would you like to know a secret to staying gainfully employed and well-compensated regardless of what is happening in the economy? How about a great way to also help you climb the ladder?

Before retiring from a long, productive, fruitful career, I stumbled on such a secret. With this secret, you can become more assured your job will be there tomorrow, pending some unforeseen circumstance. It is practically foolproof when done correctly.

Read on to learn the secret, and never worry about employment again!

How do you view your job?

Before going into the secret, let’s discuss how you see your job.

Do you enjoy your work? If so, great. If not, why not?

If you do not find joy in your work, what is your plan to find work you can enjoy? Life is too short to work in a job you hate. What is it that you dislike about your job? Could a shift in your perspective or attitude help you enjoy it?

When one finds value in their job, it is a marvelous thing. While there may be rare exceptions, most people can learn to enjoy their current position with a slight change in attitude.

Some years back, I went from running and owning part of a company to an employee when we sold to a large multinational company. I could have allowed my ego to get in the way and did for a short time as I moved to a lesser position.

Because I had a contract, I promised myself I would do what I could to make it work. I soon realized I needed to change my attitude and give the new company a chance, allowing time to heal my bruised ego from losing some control. The following two years were incredible and far better than I could have imagined. This happened not because my position changed but because I changed.

Life is like that, isn’t it? Trying to change the world without first changing ourselves is difficult at best. It’s when we change that our world changes.

“When we change, the world changes.” Daisaku Ikeda (1928-present)

The secret

The secret I discovered around the time of all this change proved its value time and time again. It became an invaluable tool for me and many I have coached since. If you are self-employed, you already know the secret yet may not have named it. Unfortunately, the larger the organization, the less likely it has been discovered, even though they know what it is for their business.

The secret is this: uncover your personal return on investment (ROI). With this number in hand, you possess the information that tells you your value to the company.

If the number is negative, you may want to start looking for another job.

The more positive the number is the greater your job security and advancement opportunities. With a strong ROI, you can solidify your position and move far beyond where you are now.

When you are a solopreneur, it is easy to see your ROI. If your livelihood depends on your business, you must generate enough profit to survive. If you can’t make enough, you will seek suitable employment or go broke.

Similarly, if you work in a company, What is your contribution and its effect on the company’s bottom line?

Does your boss know? Does his boss know? Does HR know? Does finance know? Does anyone know?

Behind the scenes

Since the personal ROI is clear to a self-employed individual, why isn’t this the case in larger businesses? Have you ever worked for a company that knows the contribution of each of its employees? If you have, I would love to know who they are, as I have yet to find a company that produces this information, even though every one of them is capable of doing so!

In most companies, the value an individual adds to the bottom line is almost entirely subjective. After all, how do you calculate the ROI for most positions? If the person is in sales, it is relatively straightforward. Yet, it can be difficult for most marketing, management, accounting, engineering, administrative jobs, etc. But every position is needed to fulfill certain tasks for the business to operate.

For an individual’s annual reviews, their bottom-line contribution rarely, if ever, comes up. Most companies that do yearly reviews set goals. Unfortunately, many of these goals are so subjective managers can find it challenging to do a truly effective review.

Yet, think about this fact:

If your work isn’t producing a profitable return for your employer, your job will eventually be in jeopardy.

Calculating your personal ROI

In a larger organization, how does one uncover their ROI? From experience, I can tell you it is not easy, yet the effort is more than worth it. When you know your ROI, it changes everything!

The difficulty is that most jobs are unique, and few companies produce the required metrics. Finding your personal ROI will take some digging and likely some estimating.

What exactly is personal ROI? While there are several ways to calculate ROI, I find the simplest for personal use is:

ROI = Revenue minus COGS divided by COGS ​X 100

COGS are simply the Cost of Goods Sold, the total cost of raw materials, manufacturing, finished products, storing, delivery, payroll, overhead, taxes, interest, and all administrative expenses. For your personal ROI, some costs require allocation to be fair.

It is an easy matter for a self-employed individual to calculate ROI. Take all of your expenses, including what you pay yourself, subtract them from your total revenue, divide it by all your expenses, multiply by 100, and you have the number. If it is positive, you are doing okay. If it is negative, you will want to make some changes in the business unless you are still in the investment and growth phase and are projecting a profit.

ROI examples

Example 1

Say you generated $200k worth of business in the past year. Your costs, including your income, taxes, insurance, office, car, phone, and everything else, are $180k. The formula will look like this:

$200k — 180k = 20k divided by 180k x 100 = 11.11% ROI.

So long as this number is in the black (positive), you are okay.

Example 2

Now let’s look at a corporate salesperson (rep). This is one of the most straightforward employees to calculate ROI because revenue and COGS are generally available. Let’s say the rep was responsible for bringing in $2m in revenue, and the COGS attributed to those sales were $1.5m

To calculate the rep’s personal ROI, simply take the total revenue minus the COGS, which equals $500k, and divide it by $1.5m x 100 to equal 33.33%.

$2m — $1.5m = $.5m divided by $1.5m x 100 = 33.33%

So long as this percentage remains in the black (positive), the rep provides a return to the company. If it is in the red (negative), the rep costs the company (losing money). In this example, the rep’s ROI is healthy!

Finding your personal ROI

While calculating personal ROI for some people is relatively straightforward, other positions require more digging.

To begin your journey to find this information, speak to your boss, someone in the financial part of the business, and/or HR, and begin sorting it out.

The last time I did this personally was in a large multinational company. It was not easy, yet by being persistent (bugging some people to death!) I came up with a reasonable ROI for myself. At the time, I was fortunate to have had several patents issued that had tremendous income potential for the company, so my annualized ROI was extremely high! Sure, there was some estimating, but I ensured such estimates were conservative.

Upon gaining agreement with my boss and HR that the ROI was realistic, annual reviews became an absolute breeze. The company recognized and was thrilled with the value I created. Because my performance was now more fact-based, it eliminated much of the subjectivity usually involved.

It still amazes me that a large company with tens of thousands of employees never had a single employee attempt to determine their personal ROI! But then, which company has ever tried to do so? It takes some work, but it is more than worth the effort.

Would you run a business without knowing your ROI, only using subjective measures? No way! Yet that happens every day when it comes to a company’s most valuable asset, its people.

Final thoughts

Uncovering your actual contribution may not be easy, but it is possible if you are persistent. Once you can calculate your personal ROI, or if the company does it for you, it will change everything.

Without knowing your personal ROI, how can you prove you are a valuable employee other than by mostly subjective means? As the father of modern management once said:

“You can’t manage what you can’t measure.” Peter Drucker (1909–2005)

This same gentleman also said:

“If you can’t measure it, you can’t improve it.” Peter Drucker (1909–2005)

Measuring your personal ROI puts you in the position of being able to do something about it, making it possible to improve it. When your personal ROI becomes significant enough, no company in its right mind would want you to leave and will likely reward you for your performance!

Imagine every employee knowing their personal ROI! It would change the face of the business world significantly!

Why not take the initiative to uncover your personal ROI and show the company what an amazing and valuable employee you are?

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Semi-Retired-Leadership/Executive Coach -Personal & Career Growth Expert -Editor and Leadership Writer at Illumination -Author

Richmond, VA

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