On a job, if we shouldn’t trade our time for money, then what should we trade for money?
When I have read blog posts suggesting “don’t trade your time for money”, I have scratched my head and wondered “don’t we all trade our time for money in our jobs?” If we shouldn’t trade our time for money, then what should we trade to make money?
We should trade our services for money.
To elaborate, consider the situation where you are traditionally employed as an engineer. By traditionally, I mean that you have agreed to spend 8 hours of your day to engineer products for your employer in exchange for 400 dollars. Suppose you are given an engineering task that takes 8 hours to complete. Now, if you take 8 hours to complete this task, then you earn 400 dollars. On the other hand, if you are really smart and you complete the task in 4 hours, then it will not be the case that you will only earn 200 dollars. Instead, you will find and do other tasks relevant to the employer in the remaining 4 hours, report 8 hours of work, and earn 400 dollars.
Consider the alternative scenario where you are non-traditionally employed as an engineer. By non-traditionally, I mean that you have agreed to complete tasks of certain complexity at the rate of 400 dollars for each task and the promise of completing them in less than 8 hours. In this setting, when you take on a task of complexity that was agreed upon earlier, you earn 400 dollars when you complete the task independent of the number of hours spent to complete the task. For example, if you spend only 2 hours to complete the task (cos’ the task is similar to what you had read about, done in the past, etc.), then you earn 400 dollars for 2 hours of your time. More importantly, you get 6 hours of your time for yourself!!
Think about it. This is the most basic form of trade.
Employee accomplishes something of value (service) to the employer in exchange for something of value (money) to the employee.
It makes perfect business sense — what employees can accomplish for the employer is the only thing of value that affects the employer’s bottom line. So, an employer should hire/contract employees to accomplish specific tasks and not hire/contract employees for a fixed amount of time. For example, this is the model in publishing industry — an author gets X dollars in exchange for writing a book along with some royalty proportional to book sales paid out over time. This is also true in case of self publications.
This non-traditional model of employment is beneficial to employees (aka service providers) as they get to control their worth (in terms of the price for provided services) and (how they spend) their time. The downside is the risk of not having a guaranteed steady stream of income.
While this employment model seems disadvantageous to employers, it isn’t. As in any market, the service offers available to an employer will be dictated by the price set by the employer for the desired service (including aspects such as timeliness, quality of service, future support). So, on the positive side, the employer will be privy to competitive pricing. On the negative side, the employer will find it hard to get the same level of desired service as service providers can change independent of the employer.
The above model is not new. It has been and is being successfully used by numerous professionals, e.g., plumbers, software consultants, doctors. However, it is not mainstream. So, my parting thought/question are
What if it were mainstream? How would it affect our society?