Is an hourly wage holding you back?
It might not feel like it, but getting paid hourly can limit your professional growth and your income potential. Here’s how…
If you’re earning an hourly wage, you’re quite literally getting paid for your time. That’s why it’s so common for shift jobs like security guards, restaurant workers, and retail employees to be paid by the hour. And it makes sense—they’re literally paid to be present (to get work done) at their place of employment for a limited number of hours each week.
But there are two ceilings you’ll hit with this system. First, you only have so many hours you can work. Let’s say you earn $15 an hour. If you could somehow work 24 hours a day, 7 days a week for a full year, the maximum you could earn is $131,040.
But if we’re realistic, earning $15 per hour, working 40 hours per week with no time off, would get you less than a fourth of that, roughly $31,200.
Is that $31,200 worth it to you? With an hourly system, that type of trade-off is unavoidable.
Second, hourly wages don’t encourage efficiency. The more hours you punch in, the more you get paid. If you’re working in a project or sales-oriented field, that means you’re incentivized to drag your feet. Even worse, you’re actually punished for increasing your speed and ability!
What if you got paid by the project or sale? Getting paid this way, once you’ve finished one project or made a sale, you could move on to the next. The faster you complete your work, the more money you can potentially earn. Your income scales as your ability improves!
Hourly wages are acceptable if you’re starting out. But there will come a point where you’ll need a better compensation structure to grow your income.