You might believe that your worth to your employer is equivalent to your salary. However, Katie Gatti Tassin has a different perspective — your value is significantly greater than that.
The host of “Money with Katie” recently discussed a framework that could transform your negotiation approach permanently. Her formula is straightforward: Your worth is determined by your market rate, plus the cost of replacing you, all elevated by your distinctive skills.
Many individuals concentrate solely on market rate — the pay for comparable jobs in your region. This information can be obtained through salary transparency laws, LinkedIn statistics, or job ads. However, this is merely the beginning.
The real revelation? Replacement costs. When you depart, companies incur recruiting fees, interview time, onboarding expenses, and a decrease in productivity. For mid-level positions, recruitment agencies typically charge 15 to 25 percent of your initial salary. Higher-level roles incur even greater costs, with headhunters for executive functions charging 25 to 35 percent of the total compensation.
For instance, replacing an employee with an $80,000 salary may cost a company $20,000 just in recruitment fees. In the case of a $200,000 executive, this figure could rise to $70,000. When you factor in training time and the productivity gap during the search for a replacement, the total replacement costs can range from 50 to 200 percent of the annual salary.
Additionally, there's your “special sauce” — the distinct value you offer. You may have strong client relationships, specialized expertise, or institutional knowledge that would require months for a replacement to acquire.
Katie gained insight into this framework during her own career transitions. She began her career as an ad copywriter but transitioned to user experience writing after collaborating with a UX designer who highlighted the significantly better pay. That internal transition enabled her to make an external move that increased her salary from $70,000 to $140,000.
Although Katie had to leave for a flight — as she was visiting our New York studios during her book launch tour — the discussion included practical strategies for earning more and creating wealth.
Resources Mentioned:
Money with Katie | Website
Rich Girl Nation: Taking Charge of Our Financial Futures | Book
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You might believe that your worth to your employer is just reflected in your salary. However, Katie Gatti Tassin has a different perspective — your value is significantly greater than that.