“Time is money” goes the common adage. Relatively, this is true. When you’re young and unburdened with responsibilities, your time could be spent lounging on the couch skipping through countless channels of useless television, or arguing with your teenage friends about which shopping mall to visit in the afternoon. Fast forward 25 years and your time has something called an opportunity cost. In economics, this is defined as not being able to do the next best thing because your time was already spent on one thing. And it’s the result that matters. So opportunity costs need to be properly weighed up. Take exams for example. With the knowledge of assessments being 3 weeks away, every minute not spent study bears the opportunity cost of studying, with the possible overall outcome of failing your exams.
Inevitably as age increases time becomes far more valuable. But it is also dependent on your stature and degree of responsibility. If you are in the C-suite of a Fortune 500 company, your 5 minutes may well be worth a whole day’s salary of an employee a few tiers lower. Why? The levels of decision making, accountability and knowledge consumption required at your level bears a much higher cost. A mistake made by you could be worth millions. A slight miscommunication with a major client could veer the company off its intended path of progression. Your time, from the accumulation of your experience and valuation of your professional ability, will thus hold much higher levels of opportunity cost than a simple retail employee’s.
Thus the opportunity for the home services industry arrives. Whilst the above example outlines the measured use of time that high level executives must negotiate, the technologically leveraged age that we live in places all of us in a similar position; time is valuable. Whilst in older days only the richer could afford computers or smartphones and the consequent opportunity to utilise more productively their time, the distribution of opportunity leveraged by utilising these assets of technology is much more egalitarian today. Whilst in older days education was reserved for the wealthier, anyone with access to a laptop or smartphone can now access thousands of domains offering upskilling courses from cooking, learning Chinese, trading stocks to coding websites. Just look at YouTube for example, many of its users are subscribed to key opinion leaders and educators. Khan Academy is a prominent example. You can find a tutorial on finance, economics and accounting topics.
Point being made, with technology available to energise a society into more of a culture of learning, time becomes valuable for everyone. For the cumulative hours that one spends on maintenance activities, one could spend them on upskilling activities. Cleaning the kitchen, mopping the floors, washing the dishes, building newly bought furniture, installing the new smart television are typical maintenance activities. If you averaged 4 hours per week doing them, that’s 208 hours per year which you could have spent teaching yourself a new language, learning how to build a website on Udemy, or reading The Economist articles to build your entrepreneurial knowledge base. Stretching those hours into an average lifetime, a miniature career could have been made from a more efficient allocation of time.
Which is why home service companies exist. They realise that housekeeping matters are on the bottom of priority lists for people desiring to maximise their time from pursuing more career-pertinent interests, or even just self-actualisation interests. Well, most often anyway. Housekeeping, if done well, can be made into a commercial service creating value from alleviating the burden of maintenance activities from the schedules of people who would rather not do them. Rather, these maintenance activities are traded to people who would value doing them as a productive use of time. This is the premise of the service trade. If you’re the CEO of a company and your time is worth $500 per hour, it is meaningful to pay a fraction of that, maybe $50, to someone who would value their own time at $25 an hour. This way, you both make a profit out of your time. For the CEO’s it would mean an additional hour which could be dedicated to furthering his vision of the company, reverberating into extra shareholder value for the future, and for the employee of the home service company, it would mean $25 surplus of his expected value. Win, win.
And it is the realisation of opportunity gaps such as these which is burgeoning the rise of home service ‘gig’ economies such as the one predominated by Airtasker in Australia and more recently, its entry into the UK. Allowing home residents to outsource more mundane tasks to workers who are willing to bid asking prices for their services, a particular man made $171 000 AUD through work found through the Australian start-up. Being nearly three times the minimum wage, this is an exorbitant sum, with the ‘salary’ reaped from competing 172 tasks. Such an exorbitant sum illustrates the opportunity available to both home owners hoping to efficiently allocate their time and workers ready to accept tasks to productively be paid for their time. And if someone can tidy your home better than you, or install that annoyingly complicated Internet cable system without as many headaches and in a shorter time than you, then maybe their time is worth your money.
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