In our everyday decisions, it’s easy to apply a business-like mindset and use the cost of time and money to decide whether doing something is worthwhile, or if it makes more sense to hire someone else for the task. But businesses also weigh the value of effort in their choices; here’s how you can apply effort-based decision-making to arrive at quality choices.
Determine the cost of effort
In order to facilitate decisions, you need to establish a clear baseline for the effort costs involved. For businesses, this can be a straightforward process. Take the hours worked and wage cost of having an in-house team versus hiring expert accountancy services in London to manage tax and payroll needs; the difference will be the cost savings, which yields better insight into the decision to outsource or retain in-house accountants.
On an individual level, you can use a similar method by checking out professional rates for various services – it could be a contractor working on home renovation versus doing the fixer-upper work yourself, for example. But you also need to consider the cost in terms of physical exertion and willpower; will investing effort into a task leave you drained for the rest of the day? That could mean missing out on social engagements or time spent on hobbies or recreation. Although there’s no precise method of doing so, only you can provide a good estimate of the value of the opportunity cost.
Look out for added value
There are some endeavors where effort can add value to the output, such as a finished product, for instance. Businesses understand this, and are careful to leverage its potential by focusing their efforts in areas that are considered core competencies. These are the aspects which set a business apart and provide the greatest value to their clients or customers.
Individuals can also have their own unique set of core competencies. When you register for an online job search website, most likely you were asked to fill out a list of your top skills and rate yourself on a scale. The combination of skill value (to prospective employers or a target audience) and your proficiency level is what lets you bring added value to a task. Applying effort to an activity which falls under your core competencies will yield more value than hiring someone else, which can shape your decision-making.
Effort as a reward
Often, people associate effort with greater hardship and implicit negativity – that’s why we tend to ask if something is ‘worth the effort’. This way of thinking can overlook the many instances where human beings perceive extra effort as a reward in and of itself. Climbing a mountain, or other forms of physical challenge, are examples of activities which many people find rewarding, largely on the merits of the effort invested. The euphoria experienced would be diminished or lost if such tasks were too easy. Companies invest in team-building activities even though employees won’t be productive; they know that the boost in morale and teamwork will translate to better performance. Be aware of similar benefits in your personal efforts; if you derive great satisfaction from carrying out DIY home improvements, you might think twice about getting a contractor to do the job.
Using easily measured costs, such as money and time, to form the basis of decisions in our daily lives is a typical way to start improving our choices. Valuation of effort can be tougher, but get it right and you can focus on what matters most to you.
