{"id":457,"date":"2021-08-26T09:00:46","date_gmt":"2021-08-26T09:00:46","guid":{"rendered":"https:\/\/lisacampbellprofitcoach.com\/?p=457"},"modified":"2021-08-30T16:54:04","modified_gmt":"2021-08-30T16:54:04","slug":"hourly-or-percent-of-billings-which-is-the-best-option-for-paying-team-members","status":"publish","type":"post","link":"https:\/\/lisacampbellprofitcoach.com\/index.php\/2021\/08\/26\/hourly-or-percent-of-billings-which-is-the-best-option-for-paying-team-members\/","title":{"rendered":"Hourly or Percent of Billings? Which is the Best Option for Paying Team Members?"},"content":{"rendered":"

As a business owner, you are the sole decision maker when it comes to how you are paying your team members. You basically have two options, which include paying them hourly and by percent of billings. While either one has its pros and cons, I have discovered that percent of billings makes more sense for my team.<\/span><\/p>\n

Paying Your Team Members an Hourly Wage<\/b><\/p>\n

If you choose to pay your team members an hourly wage, you must make sure you are monitoring their progress. Failure to do this can have your team members spending more time than necessary <\/span>on their tasks,<\/span><\/a> so they make the most money. The result of not monitoring your team properly is less profit margins, because you are paying your team more than you should.<\/span><\/p>\n

Paying Your Team Members a Percent of Billings<\/b><\/p>\n

Choosing to pay your team members a percent of billings is an excellent choice for most people. Your team will want to take on more and more work to earn a better paycheque, so they will hone their skills to complete their current work as quickly as possible. For you, this is excellent news, because you can bring in more clients and increase your revenues even more.<\/span><\/p>\n

When you choose the percent of billings model, you must have your systems and processes in place. If you don\u2019t, you are setting your team members up for failure, because they won\u2019t be able to do their work as efficiently as they should.<\/span><\/p>\n

After you have been doing percent of billing payments for a while, you may also want to consider adding profit sharing and percent of revenue payments as an incentive to your team members.<\/span><\/p>\n

Charging Your Clients<\/b><\/p>\n

You must bill your client accordingly, no matter which payment option you are considering for your team members. Some clients\u2019 books will take more time than others and you need to be aware of that before quoting a price. If you do not charge your clients enough, you will be looking at losses at your end, especially if it takes your team quite a bit of time to do the work.<\/span><\/p>\n

Transitioning to Percent of Billings Model<\/b><\/h4>\n

If you are still paying your team members hourly and want to switch to a percent of billings model, there are a few things you can do to transition to the new payment model. First, you will want to look at your numbers. Your operating expenses should be a reasonable amount. If they are not, you must bring those expenses down before you start changing your payment model.<\/span><\/p>\n

Next, you will want to double check all your systems and processes to make sure you have specific steps in place for every task your team members do. This will ensure every team member is successful in doing their work quickly and efficiently.<\/span><\/p>\n

The last step is to determine which KPIs you are currently monitoring and whether you need to add other KPIs to your list. You will really want to monitor certain KPIs if you are planning on staying with an hourly payment model.<\/span><\/p>\n

Only you know which payment model is best for your firm, but I recommend running the numbers to see if switching models can benefit both you and your team members even more. After all, you know your team members won\u2019t be upset if they can earn even more money in their pay cheques! <\/span><\/p>\n<\/body>","protected":false},"excerpt":{"rendered":"

As a business owner, you are the sole decision maker when it comes to how you are paying your team members. You basically have two options, which include paying them hourly and by percent of billings. 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