I’m picking this post up from my last post on time management for CAT Adjusters (here). Making a break from particulars of CAT management, I’ve decided to write this 6th-in-a-series post on the significance and importance of time management in general.
In a CAT, time is precious. Heck, all time is precious! In Dan S. Kennedy’s book “No B.S. Time Management“, he leads readers through a great exercise where he takes a deeper look at what an hour is worth. Let’s try it:
How Much is an Hour of Your Time Worth?
First, you must decide how much you’re going to make, a number called “base income target”. Note: if you don’t have a base income target, you can’t know how much your time is worth, so you can’t make good decisions about the investment of your time (and make no mistake about it, what you do with your time is an investment – of the most precious resource you have, especially in a CAT).
Next, how much of your income is inextricably linked to you (for example, say you owned 5 Subway franchises, and you have a manager that manages the stores. If you want $500,000 as a bottom line, an investigation might find that $250,000 is directly dependent on you, the other $250,000 on your manager and other employees.) As an Independent Adjuster, it’s almost all on you; i.e. your income is directly proportional to your performance.
Once you’ve established a number, you divide it by the number of workdays in a calendar. Here’s where Dan makes a very, very important point; only a percentage of our hours are actually productive! The rest of it involves mindless paperwork, driving, phone messages, cleaning your hotel room, eating, etc. Dan references one study of Fortune 500 CEOs that locked in at an average of 28 productive minutes/day! To make things simple, though, he suggests calculating generously at 1/3 of your time as truly “productive” in the full sense of the word.
Now, armed with this knowledge, let’s take a practical example. Let’s say as an Independent Adjuster you determine your base income target to be $150,000.00. Let’s do the math:
- Base of $150k divided by 1,760 hours (220 work days per year x 8 hrs/day = 1,760) = $85.23/hr.
- multiplied by 3 (to factor in 1/3 productive vs. non-productive ratio) = $255.68/hr.
Conclusion: if you wish to make $150k/year, your time is worth $255.68/hr! When you realize your time is worth $255.68/hr, it gives you a completely different perspective about how you invest your time. Dan even suggests putting this on a 3×5 card and keeping it in front of you at all times.
Some things change (or should change) with this perspective. This number forces you to ask the hard question “is what I’m doing worth $$255.68/hr?” Said in a different way, would you pay someone $255.68/hr to do it? Powerful exercise, huh? Most people randomly spend their time on whatever presents itself to them. Heck, I’ve seen CAT adjusters spend an entire day detailing their truck! For that kind of hourly money – take it to the detail shop on the corner, spend $150, bring your laptop and complete 3 reports while you’re there. Then do claims the rest of the day and boom! You’re $1,000 ahead for the day!
Next, it puts a meter on others’ consumption of your time and forces you to think in terms of “investment” and “expense”, which helps you quantify what’s going on in your life. Living in this perspective is harder than it looks. “Most people will find ways to avoid confrontative productivity and will waste their time, even if they have to work at it.” (from No B.S. Time Management).
For the Independent Adjuster, especially working CATs, this perspective is invaluable. A great question to keep in mind, perhaps even taped to your dashboard, your bathroom mirror in your hotel, and your computer screen: “I’m away from my home and family to make money; is what I’m doing right now worth $255.68?”
Thankfully, there’s a ton an Independent Adjuster can do to make sure every hour is used as productively as possible. In the next article in this series, we’ll start to look at some of these tips and principles.
Thanks for reading, and see you soon!