Chances are that 95% of people is what is bringing in 95% of the value of your company.
"Five thousand dollars," the artist replied.
"But, what?" the woman sputtered. "How could you want so much money for this picture? It only took you a second to draw it!"
To which Picasso responded, "Madame, it took me my entire life."
If 20 hours of someones time saves you 2 million though, it's a no brainer to pay them 20k to do it.
Some people absolutely do specialize in this sort of engagement, and do well at it. It's really important to remember that. $N/hour usually doesn't mean $N*2000/year salary. Often hourly rates go up because of the nature of the work means the ratio of billable hours to hours put in isn't great (see, e.g. many independent lawyers).
Also worth noting that most people contracting at this level don't in fact charge hourly but that's a different aspect.
P.S. It was an inflated amount to get an immediate fix based on his daily rate knowing it'd only take an hour or two - not because sysadmins working on ~30 person networks reguarly earn ~£3k a day.
I agree that 20000 for one hour is pretty unlikely but 10,000 a day for 2 days seems like it might happen.
Sure, but there are plenty of business problems worth solving even if it takes millions. You're not paying for the person, you're paying for someone to solve your problem.
My friend (annoyed) asks what is he going to do. Locksmith pulls out a bent coathanger. My friend gets angry. Says he could do it himself, he has a coathanger upstairs, he doesn't need the locksmith, £150 is a total rip off, calls him every name under the sun.
Locksmith: "Okay mate, you have a coathanger now?". Friend says no, agrees to pay him. Door opened. £150 well spent.
I think too many people here perceive tech as something that meets their needs when it should be about providing a service to others.
A MacBook repair shop may replace a $0.50 transistor, but charge $200+. What you're paying for is the knowledge and experience in identifying and solving the problem. It's unfortunate that so many consumers don't understand this principle.
I don't know who they found to take the task, but I have to assume they charged them quite a lot because you're just not going to find very many people to solve that particular problem.
Certainly not 10000 per hour, but a significant amount given the Danish market.
And no...that just isn't correct. It does vary by industry. Very generally, capital-intensive businesses have smaller productivity differences...but even then it is probably far less than you think (in some of those industries, experience curves are per employee). But, given the subject of the post, then yes...productivity can vary that much.
What is perhaps confusing you, and many companies get this wrong, is that they treat every employee like a superstar when (by definition) they can't be. It is far more profitable to hire five below-average people and teach them to be average than hire one superstar.
My point wasn't really about what companies should or should not do but how they should look at those decisions. Wages really don't matter. I will pay someone $1m tomorrow if they can generate $5m in sales. Simple.
But companies should think carefully before they go down this route. It mostly isn't worth it because most companies aren't very good at hiring and will lose the employee if they can't continuously provide a high productivity environment. Some places can retain staff but, again, there is an 95/5 rule about workplaces just as there is employees.
Only if you discount equity, small companies are very unequal because the owners/founders will make orders of magnitude more in the event of a sale.