This Is What You're Really Worth to Your Employer

An employee adds value to a company — that's why you get paid wages. On the flip side, if workers got paid by how much value they added to a company, that business would never make a profit. Some don't see the downside there, but most accounting departments would argue that there needs to be some sort of formula or guideline for striking a balance.

Enter the leverage rule. Auren Hoffman, CEO of the data collection service SafeGraph, recently shared what every chief executive should teach an entry-level hire: knowing what you're worth, and knowing that it's more than you think. In order for a business to profit from its employees' labor, that business needs to reserve two-thirds of how much value those employees add to the company. In other words, your value to your employer is at least three times what you're earning.

Most workers, especially women and marginalized groups, have a lot of catching up to do when it comes to salary. Everything you need to know about asking for a raise involves doing your due diligence about how much your work is worth. Figure out when your value is tangibly increasing. If your boss isn't in a position to offer more cash, see if you can negotiate other benefits for yourself. Once you've asked for what you're worth, you'll still need to plan for how you'll spend that new wealth — but the most important thing is that you're reaping what you truly give in the first place.