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The value of improving a skill (a simple model)

We spend a lot of our time daily on tasks that we could be better at. With a bit of training and practice, we could learn how to do some tasks more efficiently, and save time and money as a result.

But the world is moving faster than ever now, and there's often a feeling that there's just no time to learn how to do things better. How do we justify taking time to improve our skills, when we're always out of time?

I was thinking about this recently and realized if that we're willing to guess how much more efficient we could be at a skill, then we can estimate how much time we can save, and even how much that time is worth.

Naturally, this is a perfect job for a spreadsheet!

Model to calculate the value of improving a skill

The goal of this model is simply to calculate the time that could be saved, based on a modest improvement in efficiency, and the value of that time. To do that we need the following inputs:

  • The time spent daily on a certain task or activity
  • The number of days per week (on average) this daily time is spent
  • A guess at increased in efficiency, expressed as a percentage
  • The value per hour of the time spent on the activity

Inputs

With these simple inputs, we can calculate outputs, including:

  • The time spent on a task each week, month, and year
  • The time that could be saved with improved efficiency
  • The value of time saved

Once we have this information together, we can easily run calculations to show accumulated savings on a yearly basis, based on the outputs we already have:

Yearly calculations

Finally, we can take the yearly calculations and plot them in a simple chart.

Projected savings chart

As a model, this is laughably simplistic. We aren't taking into account the cost and time of training, and we aren't being clear about the "value of time" — is that the value of time to us, the value of time to an employer, or something else?

On the other hand, being able to visualize the data, and seeing how the model responds to different inputs gives us a better understanding of the problem. Even if our assumptions are not very accurate, the model shows us that small improvements in efficiency can have big impacts, especially if you spend a lot of time doing the same activities.

What do you think?  Do simplistic models like this have value?

 

Author 
Dave Bruns