Q: What kind of information / resources can LERN provide me regarding the trend in pay rates for contract trainers in educational settings in areas like customer service, team building, management development, etc.
A: Here is a response from Julia King-Tamang, LERN's leading consultant in Contract Training.
I wish I could say something like this: “The average fee per hour for such instructors is $104.” But I can’t and here’s why...
Let’s imagine the instructor is going out to a small, local business to teach a class on customer service. The company might reasonably pay $1,000 for a day-long customized class. Let’s imagine the class met from 9 to 4, a fairly standard format. And let’s say that 10 people participate. If you keep your pricing in the “sustainable range” recommended by LERN, that means that you can pay your instructor about $400-$500, depending on the cost of materials and other expenses, including coffee and so on. (The sustainable range pricing would mean that you kept production costs–materials, instructor costs, development and so on–down to 40% or less of the course income.) That would yield the instructor around $60 an hour for pay.
But let’s imagine that the same Contract Training unit sends that very same instructor out to teach customer service at a large insurance company. Let’s say the class meets 9-4, but has 150 people in it. If we charge the same per person cost for materials as in the scenario above, I could easily imagine that the class might be billed out at about $5,000.00. In this scenario, the instructor might be making around $350 an hour.
I guess I could say that the average of those two wages is $205 [($5,000 + $350)/2] but I don’t think it really gets at the true answer to Dave’s question.
To really answer Dave’s question you have to understand that in Contract Training, each job is unique. When we say we do customized training, it does not only mean that we customize slides, exercises and handouts. It also means that we tailor the delivery to each situation. In many cases, the same instructor teaching the same course in two different places is often actually teaching two very different events.
For example, the two classes mentioned above could easily use the exact same materials and slides. But in the larger company, it might be the case that the facilitator has to bring a much higher level of facilitation and presentation skills to bear and that the client expects significant follow up via email.
As a professional presenter, I expect that each job is bid separately. I do have a daily rate. But the ‘standard daily rate’ is simply a place to begin the conversation. Things that might affect that rate include:
• The amount of customization
• The length of the class
• The amount of pre or post-class work or communication
• The travel required
• How much I enjoy working at the site
• How much I want to have the client on my list of client’s served
• How easy or difficult the client is to work with
• How much work I have that month, week or quarter
• Whether or not I have the basic course prepped
• How much I enjoy teaching the subject matter–and so on
For example, I just taught a job in the midwestern US. I did it for the cost of expenses. Why? A family member lives nearby and the job allowed me to make a weekend visit at no cost. I wanted to be sure I was the vendor of choice, so I made the most attractive offer possible. I got the job. It was a win-win. So what was my hourly rate? Free.
I also remember once when a client called our training department asking for a one-day class in a topic area we did not particularly enjoy teaching. We were good at it, but we’d just taught it so much we were excited about other things. And, our docket was full to the max.
The client pressed us to give a quote for a daily rate over the phone. Because we did not particularly want the job, we quoted three times our normal daily rate. The client said, “OK. Great. What are you first available dates?” At three times our daily rate, we were happy to go out and do our least favorite subject. So our hourly rate there was about $640 a classroom hour.
So is the daily rate zero dollars per hour, or $640? Both are true. The real answer is: it depends.
A better approach to pricing the instructor costs is to set what feels to you like a reasonable hourly cost for this presenter for this job. Now, multiply that number by the number of hours they will be in the classroom. Add in materials. Then, divide that by .40 (because you want to keep production costs at 40% or less of income) and see what the number is. Will the client pay that? If they will pay more, raise the cost and do something to increase the value in the client’s eyes.
If you think the client will not pay that much, reduce the scope of services.
Now run this number by your instructor. What do they say? If they want more money, explain that you need to keep production costs (instructor, catering, materials) down to 40% or less of income and ask the instructor their ideas for raising the amount the client will pay–which effectively raises the amount you can pay the instructor. Work together until you get a workable formula.
So, in Contract Training, there is no set hourly rate. Of course, you can go onto LERN’s Contract Training LinkedIn discussion group and put the question out to your colleagues. You’ll get helpful answers that tell you the “basic rates” for instructors. And if you get a lot of answers, you’ll see that they vary widely by geography, specialty area and so on. And remember–just because a lot of people are doing something does not make it a best practice–it makes it a common practice. These are two very different things!