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Your Personal ROI Reveals How Valuable You Are To Your Company

Your Personal ROI Reveals How Valuable You Are To Your Company

Source: This article was originally published on CNBC.
Written by: Courtney Connley, CNBC Make It

If I can claim one super power, it’s the ability to predict when someone is about to be fired. Regardless of how safe you think your job is, it’s important to regularly take stock of where you stand professionally.

After witnessing a huge layoff at my first job i discovered a formula that very accurately predicted who was going to stay and who was going to go. I dubbed it ‘personal ROI,’ and it’s so simple, you can — and you should — calculate it for yourself right now.

To determine how secure you are, you need to divide your salary and benefits — basically, your cost to the company — into the revenues you generate.

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The higher the number, the safer your job. That’s it. Two is OK. Five is much better. Anything over 10 — you’re golden.

Here’s an example. Say you make $150,000 a year. If the annual net income for the product you’re in charge of is about $5 million, then your personal ROI will be about 33. Barring some kind of major cultural misstep, you won’t be clearing out your desk anytime soon.

On the other hand, if you make $250,000 a year and you land just one small client worth about $150,000, then your personal ROI is only about 0.5. Nervous about your future? You should be.

It’s always possible to do this calculation, no matter what type of job you have — even if you work in HR or a support position. Here’s the truth: Somewhere in your organization someone is calculating your personal ROI.

Business is business, in bad times and good, non-producing assets — well, they’re the targets for elimination.

I learned this after watching good people experience shock when they were fired. The reason they were blindsided? They didn’t do the very simple calculation of personal ROI.

The result may not always be exact, but even an estimate is helpful. And the good news is you don’t really need a super power to calculate it.

Suzy Welch is the co-founder of the Jack Welch Management Institute and a noted business journalist, TV commentator, and public speaker. Through its online MBA program, the Jack Welch Management Institute transforms the lives of its students by providing them with the tools to become better leaders, build great teams, and help their organizations win.

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