Q: RE: Instructors who we hire to teach a class. 1. What is the overall policy that LERN recommends or that other entities are using regarding course development or prep pay? This is a 2-fold question: a. Example 1: An Excel 2010: Basic class. 1-day workshop. We use a book designed for a 1-day workshop. We ask instructor to assist with description, outline, and add’l handouts if appl. b. Example 2: A Leadership Workshop, say on Communications. 4-hr workshop. No book is used and we ask the instructor to assist with description, outline, handouts, powerpoint presentation, etc.
A: There are a variety of ways to pay instructors, and the best way to determine what you can afford to pay your instructors is to apply the LERN financial analysis model. This is a simple model, but it gives you the tools you need to be able to determine your budget for teacher pay. Basically, you need to look at four things: Income from the course, how much it costs to promote the course, and how much it costs to produce the course. Promotion costs (your brochure, mailing, advertising, etc.) plus production costs (teacher pay, room rental, cost of books you pay for, etc) should not be more than 50% of your income. Ideally, your promotion costs will range from 10 to 15% and your production costs will be between 30 and 40% of your total income. This would give you a "profit" of between 45 to 50%. This "profit" is called operating margin, and it is what you use to pay all your other costs. We also recommend that you budget 5%for surplus.
The production costs then, must cover both your teacher pay and any other costs of putting on the class. Using this model, you can assign a compensation rate that is fair and reasonable taking into account your costs and need for financial self-sufficiency.
I have attached a spreadsheet which will allow you to enter the dollar amounts you spend on each area and determine whether you are below or above the ideal percentages.
http://media.lern.org/webinars/Operating-Margin-Calculator.xlsx