Unless we are buying a present for ourselves or our loved ones, we tend to scrimp on things we think we can do without, or wait until it is really necessary before we spend. Take the case of hiring professional services. There are people who rationalize” “why hire when I can do it myself?
The mistake some prospects make is thinking that they can do what a professional can. Professional proficiency at cleaning, for example, has a direct correlation to the time the customer would spend doing the same chores. This is the beauty of the division in labor that has caused advanced economies to raise the standard of living for all. In simple terms, it would take the average homeowner three times the time it takes an organized, prepared and experienced professional to perform the same quality of work.
To accurately compare what the true value is of hiring a cleaning service the homeowner should do the math. Here is an example of how it is done: Take the consumer’s own gross wage, (excluding benefits), multiply by 1.3 for employment taxes (that all employers must pay) then multiply again by three. A cleaning customer doesn’t have to pay worker's employment taxes; however, they do potentially benefit from those costs and the comparison overall will become clear in a moment. Additional value is that the professional cleaners’ hourly price point covers not only the direct costs of delivering the service but also the hidden fixed costs of administration and overhead.
But you might be wondering what all of this really means to the person who is considering the worth of hiring out to do their cleaning. Let's say the consumer is a nurse and she earn $28 per hour gross. Her employer pays 28 times 1.3 = $36.4 per hour. (Excluding benefits) for every hour she clocks on the job. Now the fact is that an experienced professional cleaner can perform about three times the work, in the same hour that the homeowner would spend on the same job. This translates to the cleaner’s real value to the overall economy at $109.2 per hour! In other words, a nurse as one example, makes considerably more money doing a few extra hours at her own job then she can realize in financial savings by cleaning. We have all heard the phrase “penny wise and dollar poor”. The division of labor is a dollar-wise economic advantage that we all share when we utilize the resources availed to us.
Although the concept might seem counter-intuitive to the financially unaware, time is very much a universal currency. Therefore, in economic terms the nurse is further ahead value-wise, purchasing professional help than she would be by cleaning her own home. Think about it, even if overtime is not available with her employer which is unlikely to be the case, certainly there are ample opportunities to freelance elsewhere given the skill set as a clinical nurse.
So, if the nurse really feels the need to work more than she already does, rather than spending an entire Saturday cleaning her home, it would pay her much better to spend that additional time doing what she is most proficient at doing. Just as an aside, it might be more advantageous to hire a cleaner to come in during the week and to have a nice clean home to enjoy free time with the family on the weekend. We all must set our priorities and work-life balance is not the primary focus of this essay. Here we are looking purely at the financial aspect of hiring professionals.
The benefit of hiring a professional is even greater in pure economic terms for an executive, a master plumbing contractor, or surgeon who earns more than a nurse on a per hour basis. The value of wealth is not really about money per se, but rather real wealth is defined by what goods and services that we are able to procure with our discretionary income! Therefore, a fisherman in Maine can sell lobster he catches to an apple farmer in Michigan and both people end up ahead and with a better quality of life despite or rather because of the costs involved! Imagine trying to fish for lobster yourself, how efficient do you think you would be? Similarly, it takes years of attention and care before a tree produces one apple. Think about it. To clean an entire home the way a professional (who is trained and does those tasks repeatedly all day every day) can, proficiently, in just a few hours takes the amateur or “weekend warrior” all day long. The evidence is clear, it pays in purely economic terms to hire out to professionals!