How to Pay Your Staff: Task Rate Vs. Hourly Rate

A gym owner calculates payroll and writes a check to a staff member.

By Brian Strump, Certified Two-Brain Business Mentor

Tracking staff payroll can create many headaches. A few years ago, we moved from paying per hour to paying per task, and it’s simplified things for me and our staff. 

If coaches are running various kinds of classes or personal-training sessions, it’s usually best to pay them based on time or a percentage of revenue that was collected for a service. 

Paying staff for administrative tasks can be more difficult, and I often see owners make the process tougher than it needs to be. Most try to pay an hourly rate for those tasks. However, they find it difficult to track the time. 

I’ve tried tracking. 

I’ve tried timing everything. 

I’ve tried having staff track their hours and turn in time sheets. 

I couldn’t find an easy solution, but now I’ve got a simple plan that works for non-coaching roles.


How to Pay Per Task


First, start by identifying the tasks you will pay staff to complete.

Second, determine how long each task will take to complete on a weekly or monthly basis. We’re paying by task, but we still need an idea of the time each job requires. For example, creating the social-media content calendar each month takes an hour each week or four hours each month. Sending written birthday cards and PR cards takes 30 minutes each week or two hours each month. And so on.

It’s much easier to estimate time for completion if you’ve done the task yourself at some point. If this is a new task for the business or something you’ve never done, estimate the number of hours for the first 60 days, then have the staff person report back. Adjust the time as needed.

Next, decide what you will pay for each completed task. Because we’re talking about admin tasks, I would suggest having the same rate for most of them. Of course, the time you’ve set aside for the tasks will influence the rate you set. You can’t pay $10 for a job that takes four hours. But by assigning a fair task rate, you’re free from timesheets and counting minutes.

Here’s the important part: Review the time and compensation. I would recommend you follow up every 90 days with staff to reassess the time allotted for each task.

Some tasks can take more time to complete as the business grows. For example, as you get more leads, lead-nurture and follow-up time will increase. Another example: If you start using new software, you’ll need to account for the learning curve as the staff member masters the new system.

In the event that some tasks are taking longer than expected, adjust accordingly. Perhaps you estimated incorrectly. Or maybe the staff person lacks some skills and needs more training. Maybe the job has evolved and is worth more now: Dealing with five leads a month is worth X, but dealing with 30 is clearly worth more.

As staff members become more efficient at some tasks, completion time might drop. Using the social-media example again, it might take an experienced staff member less than an hour per month to complete the schedule.

When time requirements drop, fight the urge to pay less. Remember, you’re paying for the task to be completed, not how long it takes. If you reduce pay, you’re sending a message: You will pay them less for completing more work in less time. You’ll actually incentivize staff to create an inefficient work environment, and when staff people change roles, you’ll have to re-evaluate everything and adjust rates.


Fewer Headaches


When you start paying per task, you’ll have less stress and less paperwork. No one likes time sheets and counting up hours.

If you pay per task, you’ll have a better idea of administrative costs each month, and staff members will be motivated to do good work quickly. That improves efficiency: When tasks are completed quickly at a 10-out-of-10 level, you can assign more. That gets work off your plate and allows ambitious staff members to earn more.


Other Media in This Series


“Hiring Right Starts With Creating a Vision”
“How to Hire the Right Person”
“Recruiting and Retaining Coaches: Beating the ‘Great Resignation’”

Share on facebook
Like
Share on twitter
Tweet
Share on google
Share