How to value knowledge workers

How do you decide what the services of a knowledge worker are worth, what you should pay, how much to invest in developing them, and if you are getting any return on investment? If you have any responsibility for people, you will find decision making easier if you have some idea of 

How to value knowledge workers

Knowledge workers may be found at every level of your business - from customer service agents who are expected to think for themselves through to the most senior professional experts or consultants.

The knowledge is the cost
The knowledge people have is reflected in what they cost. There is a market rate for accountants and doctors and other specific professional qualifications. Even where the knowledge is based on experience (perhaps through marketing, sales or HR activity) there is still a general market pricing at work.

The value is in what the individual does with their knowledge on your behalf
For many professionals this is hard to swallow. One person may be worth more than another to an organisation because of what they do, even though both have essentially the same knowledge.

Start by valuing variation in performance

This conceptually simple model can be used to help you make decisions even where you CANNOT ascribe actual values to it.

• Create a simple value chain for the knowledge workers you are valuing
• Where is their knowledge being applied in a ‘straightforward' way? I.e. In a way in which everyone who had that knowledge would also apply
• Where is their knowledge being applied in a potentially value adding way? I.e. Where they might do something in a different way to a colleague with the same knowledge
• Estimate the range of value that different performances at this stage could add to the business. For example, could it reduce a cost, could it speed time to market, could it increase customer loyalty? If you can't put cash values on these ranges, allocate them impact values from 1 (low) to 4 (high)

The knowledge workers who add the most value to you are:

• Those in the positions where they have the greatest opportunity to use their knowledge to make a difference
• Those who consistently demonstrate that they use their knowledge to add value

Using this information you can:

• Design roles to make the most of your most valuable knowledge workers
• Plan training to enhance the value of knowledge workers where there is most opportunity

For a more detailed approach to this model for valuing knowledge workers, give me a call on 01491 842 922.

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