HOW TO CREATE FAIR TEACHER PAY SCALES

Setting pay scales for your teaching staff can sometimes prove to be a complex task.

As someone who has employed over 200 teachers while growing my music school from 30 to 2,000+ students, I have some solid recommendations that will hopefully save you time, money, and a tonne of awkward conversations with staff who feel undervalued.

I’ll start with what I don’t recommend.

⛔️ Paying on percentages

This is the most popular problematic pay model I see so I’m going to give it the most attention.

Here’s the questions I would ask someone who has chosen this model.

• Why do you think that’s a good idea in the first place?
• Where did you get that idea?
• What data helped you arrive at that percentage split?

In my experience, these percentage splits are usually just plucked out of thin air based on what seems ‘fair’ to try and appease the teacher.

No other business model I know of pays its staff in this way.

People choosing this model don’t really understand their actual business costs or exposure to financial risk.

There are often two false beliefs as to why music teachers and their employers think this model is GOOD.

1. It’s an exact number that the teacher agrees to and both parties always know what their cut is.

2. For the teacher, as fees go up, so does their pay proportionately.

Why this model is actually really BAD.

That second point is where the real danger lies, as expenses for the employer can raise over time or unexpectedly leaving them open to crippling financial risk.

Studio/Academy owners, ask yourself ...

What if your fixed expenses all rise e.g rent, power, wear-and-tear, etc, but you can’t raise your prices for another 3 months?

What if there’s a big financial hit where your $1,500 digital piano breaks and needs replacing for lessons to continue? …

… Or a weather storm means a day or week of lessons get missed meaning you lose a that income but have to continue with paying all your business expenses?

… Or what if you have to back pay a lesson credit or an unhappy customer? Do you just cough up yourself, or are you now in that tricky situation of having to talk to the teacher about needing to get them to chip in for the refund, or have it deducted from their future pay?

The reality is your teachers aren’t going to chip in to help with that, and they certainly aren’t going to want their pay reduced to help cover it.

These are things businesses have to absorb, which is why as owners we have potential for both the greatest risk, and greatest reward.

⛔️ Paying per student that attends a group lesson

For example, 3 students turn up for one group session ($30), 1 student turns up for the next ($10), 5 for the next ($50) …

This is a total nightmare if you’re dealing with students missing lessons, credits, cancelled students etc.

⛔️ Paying multiple pay rates

I highly recommend you don’t pay your teachers one rate for individual lessons, and another rate for group lessons.

This is a logistical nightmare and you end up with people getting disgruntled because they want more hours doing the higher paid work.

⛔️ Paying all staff the same amount

It isn’t fair for people that have worked for you for 3 years to be paid the same as the new person that started last week.

🤔 So what DO I recommend?

First and foremost, agree to create pay scales that are based on this concept: ‘If the business is doing well, you (the teacher) will do well.'

Additionally, I recommend you adopt these 4 things:

✅ 1. Have a pay scale

Pay scales are important, and I believe it’s really not fair to pay someone the same amount who has worked for you for 5 years as the person that’s just started.

Pay scales encourage people to stay and grow with you, and they give them pay goals to work towards 

Your pay scale should explain:

• What the scale is
• How people are measured to start on the scale
• How people move up

💡So how do you figure out what scale you can afford?

This is where you should be using the Build a Music School cashflow tool.

You’re going to know exactly what percentage of your revenue your teachers are being paid, and you’ll be able to easily tweak your budget within the tool to find the optimal pay % target for your business.

For me, the target was 38% of the revenue after sales tax, but that’s not going to be relevant to you because your numbers are different depending on all the other expenses you have.

Your numbers are also going to evolve year to year as you grow your business.

✅ 2. Make pay the same rate for both individual and group lessons

Remember that the job is ‘teaching’ - teaching 5 students at a time is not 5 times harder than teaching 1.

Also, if you work in any other service business you don’t get paid more to do different tasks.

Again, opening the door to this means that teachers could begin choosing the higher paid tasks over the cheaper ones, potentially leaving you with scheduling holes in your offered services, and staff disgruntlement.

People want a stable job with dependable income they can predict and rely on.

✅ 3. Try to pay better than the competition

If possible, you want to be aware of what others are paying so you can understand where you sit in the market.

At my school we didn’t have the best hourly rate compared to our competition, but we hired staff as employees meaning they received all the benefits that came with that (annual leave, sick leave, legislated rights etc) plus way more hours than others could offer.

In the end it meant teachers could earn more overall, plus get access to better lifestyles when they worked with us in a great job.

The takeaway here is this: don’t just compare hourly rates; there’s loads of other factors to consider that can make working at your school valuable to a teacher like …

• Are they employees / contractors?
• How many weeks a year are they paid?
• What sort of hours do people typically get given there?

Using discussions with teachers to dig deep for real understanding in this area could really help you create amazing jobs for teachers that pay both fairly and generously compared to your competitors.

✅ 4. Only raise pay when the business can afford it

You don’t want to pay more than you can afford in anticipation of growth happening.

That’s called spending money before you make it, and that is reactive instead of proactive.

I wouldn’t encourage my staff to do that in their personal life because it would be risky and could cause them potential hardship; your business should have the same outlook.

If you implement these 4 things in your own business, I strongly believe your music school and staff will have a much higher chance of thriving.

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