TIMA Road Map #9: How To Set Pay Scales At Your Martial Arts School

Phil: Good day team. Phil Britten here. Graham: And Graham McConnell from TIMA, The Institute of Martial Arts. In this video, you're going to see all about staff pay. Well, where do I start? Now, you may all ready have a bunch of assistants that are helping you around your school or volunteers. At what point do you start to remunerate them or give them the benefit of actually helping out? Something myself and Phil do at our school is we always like to pay, well, I guess the instructors. We don't like to have too many volunteers moving around, it's always nice to have them there, but at the end of the day we want to have them converted so they're committed to us. Before you start worrying about how much to pay, there's some really important things if you do make that decision to have them on board, and first and foremost is clarity. Clarity about what it is they're actually going to be doing and their level of commitment to you. For example, if you have somebody simply just helping out with one day a week, they need to understand what their role is, exactly what you're going to do because at the end of the day, if they're not performing well, how do you give them feedback? How do you help them improve because well, you're paying them for a service, you better make sure you're going to get your money's worth. Phil: Yeah, definitely commitment to you. You want to make sure that they're committed to delivering their time to give your business the best instruction that they can. So commitment on that particular time. If it is just one day a week or multiple times a week, you want to get a really good commitment out of them because you know what, if you're relying on them and they don't turn up, that is a really tough position to be in. And the guys at our schools, it really feels like a little bit of a letdown when you're expecting all these assistants and then one or two call in sick, which it happens, we know, but we want to make sure that the commitment stays clear. Another thing that we talk about when it comes to paying staff is different levels. We have various levels from to level 1, 2, 3, 4, 5, all the way up to full-time instructors, and each one of those levels have different pay rates. From completely free and volunteering their time because they're learning, and then to the top of the range branch manager who are getting paid very well for what they do. So making sure you have the clear levels, that clarity that Graham was talking about, but also knowing that you start here, and at the end of the day when you get to here, well, you could be running your own school earning X amount of dollars, which is pretty cool. Graham: Hey guys, look, we've had a ton of questions from our coaching clients and just through the email as well about contra. And we're not talking about contra, it's swapping services for I guess training. We've done it. Myself and Phil have been in that situation plenty of times, and I must say over the many years we've done it, we've only ever had one successful case out of probably hundreds and hundreds. And I'm glad to say that person is still training with us, but I guess there are pros and cons to this. I'm going to sort of throw to Phil a little bit so he's got some stuff to add into but, there's definitely a thing there where people get a little bit complacent. You're basically potentially giving them an income of X amount, however much you want to sort of remunerate. And it might be, let's just say $10 a class, $15, $20, whatever that may be, versus your student fees. But what happens if they don't turn up to class? What happens to that pace girl or that training man. If they're still training and they're not teaching, what happens here? Phil, what else have you got? Phil: I think there's just too many variables when it comes to contra. We're swapping a service which is teaching martial arts, and they're swapping a service of their skill and ability, let's just say it's like a handyman. So you have a handyman, we don't pay that person, but they do all the maintenance around the building. Well, exactly what Graham said. What if they don't do the maintenance and it goes terribly wrong? What if they don't turn up to class? Are they going to want money for that? So there's all sorts of, too many variables, and as Graham mentioned, probably 99% of the time that we've done contra, it's bitten us in the butt. So we don't recommend it, it's only in the very, very rare case that the person who you're looking at doing contra is a very valued member, probably a current member who's been with you for a while, a fantastic person around the school. There's all the ticks in the boxes, and you're sort of like willing to give it a go knowing that it quite possibly might fail. So contra is one of those things that, yes, they're and I think we do have one person on at the moment, but at least in that case they tick all the boxes, they're a valued member of our school, and they do a fantastic job no matter if they come there rain, hail or shine. Whether they're training or they do the maintenance. That's why we don't really do contra to be honest. Graham: Hey guys. Just something else to think about, and from us we're very statistic-driven. And when we look at numbers and average student size, and you hear us talk about this in some of the other videos, if you've got 10 people in your school on contra, you might go, "Look, I've got 10 people, members but $0 income from." How do you actually gauge an average fee? So something we like to know...At the end of the day we like to make sure we're very clear. And myself and Phil have the agreement that if a student joins our school, they're paying us for a service. Equally, if we ask them to work for us, we need to pay them. So that way there's a clear indication. And if for whatever reason the relationship dissolves, either person can fire the other one. What I mean by that is, well, if they don't enjoy their training, they're not training anymore, they're going to stop paying us. Therefore, we're in a bit of a pickle there, they're not really going to continue working. The other end of the scale, if they're not doing their end of the bargain, we have an option to be able to say, "Hey, look mate, this is not really working out, how about we just get you back doing your training," and there's no issues there. Because, I know the challenges and we've had this personally. Suddenly they're paying a fee, you swap that fee for a service, they're no longer training or no longer paying or doing that service for you, and then suddenly you ask them to repay for that training again, that can cause a little bit of a friction there guys, and we've generally have had in most cases, the student ends up leaving. So definitely something to consider guys when you're thinking about contra and working on paying staff as well. Phil: Cool. A couple of more things before we wrap up in today's video, and a question we always get is how much do we actually pay our staff. Well, we actually align ourselves with the fitness industry. So all our guys are paid on an award rate aligning with our fitness industry. Therefore it's like a governing body that we're aligning ourselves with, it's not just a number or a figure that we pull out of our heads and go, "Well, that's how much that job is worth." So that's really beneficial when employing teenagers or a kid from school, and even your older guys and girls that come through, because they can see the clear structure, the clear award rate that they need to be paid for that particular role for those particular duties as well. All the way up to, like we pay our managers and our staff quite well when it comes to martial arts, because these guys are Jacks of all trades. They have so much skill and ability. They're marketers, they're salespeople, they're your instructors, they're your walking billboards, they're all these things. So we pay our guys a really good amount of money to be with us full-time, and we also want to make sure that those guys who are even part-time or even kids, know the scale on what they can get to, because at the end of the day we want to our martial arts and our legacy to live far longer than us, and we want these guys who are starting as instructors to be going through the roles of being an instructor, a paid instructor and a full-time instructor running a school all with us. So that's something that we always get. Graham, do you have anything else to add? Graham: There's just one final thing. Again, with what Phil was saying to chime in there. If you are thinking about employing somebody, and it goes back to that clarity and Phil talked about those scales, don't pay them the kitchen sink to start with, because then you've got nowhere to go. Look, I've spoken to many instructors and I've said, "Look, they're worth $30 an hour, $50 an hour." But what happens if they're pretty good instructors? What happens if they get better? What if they get worse? So again, think of, "Here's your starting rate. That's what I'd like to pay you." And genuinely they're going to be pretty chuffed that you get paid to do martial arts. And then say, "Look, in three months time, in six months time, we'll revise," and there's a sliding scale. So something to think about, guys, but also make it very clear that if they drop below that standard that you expect, well, there's going to be some revision required, because at the end of the day, you want to make sure that they're going to remain as a student, they're going to have a great experience, and you as a martial arts business owner, get the best return on your investment as well. So look, in a nutshell guys, have fun with that. Don't forget to send us a truckload of questions if you're unsure. You guys should know the email address all ready, but in case you don't or if you're in a different sort of landing page or provider, it's [email protected]. Send them through, we'll answer them back, and we'll even create some vlogs in and around your topics, guys. Phil: Cool, guys, well it's us signing out. If you're watching this anywhere else other than our website, shoot over to our website and check out all the goodies over there. That's TIMA.com.au, and guys, well, go get them this week. Graham: Take care.