I would like your input on paying teachers – I am thinking it advantageous to the teacher as well as myself to rent space – rather than pay per head. Seems as though there is more incentive as teacher would be responsible to get students – would love your input on this!
I’m going to answer this question from both the perspectives of the yoga studio and the freelancing yoga teacher.
Yoga studio owners have the following methods for paying yoga teachers who teach in their yoga studio:
- Pay per hour
- Flat rate per class taught
- Per student attending
- Rent the space to the teacher by the hour
- Hybrid: a combination of two or more of the above.
Few yoga studios can afford to pay yoga teachers a full salary. A salary works for larger studios where the teacher takes on additional duties such as administration, sales, curriculum development in addition to teaching classes.
Obviously a salary, assuming it’s a decent salary, is a great option for a yoga teacher especially if it includes benefits. It can also be great for a large and busy yoga studio.
The downside for paying yoga teachers a salary is it’s a fixed cost and adds tremendously to overhead. I always prefer keeping overhead to a minimum, but in some cases, where there are many large classes, a salary is the best financial option for a yoga studio.
A salaried yoga teacher may help foster teacher loyalty to a studio. Students will perceive salaried teachers as a more permanent person and teacher of the studio. A great teacher can bolster the reputation and brand.
If your studio is large, growing, the teacher is loved dearly, and the teacher is willing to take on non-teaching tasks outside of class, a salary may be the best option for both the studio and the teacher.
Pay per hour
If you pay per hour only for hours the teacher teaches, it’s no different than a flat rate per class taught. However, if your hourly teachers are agreeable to work for an hourly wage doing non-teaching tasks, this can help you and your business tremendously.
Not all yoga teachers will agree to perform non-teaching tasks.
The downside for yoga studios is if a class is poorly attended, the studio may lose money. Plus, the hourly option doesn’t include any incentive for teachers to attract students. Of course if the class is well attended the studio does well.
From the teachers perspective, a fixed hourly rate is good because the teacher can count on a certain amount of pay. However, for teachers who are popular and fill up classes, they are not being rewarded for their popularity (assuming the good attendance is partly the teacher’s popularity and not entirely the studio’s popularity).
From a studio perspective, it’s always good to know how much your students like various teachers. If you receive a lot of requests for a particular teacher, you may need to be more flexible in paying that teacher if the teacher wants a “piece of the pie”.
Flat Rate per Class Taught
Same pros and cons as pay per hour apply.
Pay Per Student Attending
It’s rare a yoga teacher will accept payment based 100% of attendance. A more common approach is a base hourly/flat rate plus a per student attending fee.
The base rate plus per student fee is my favorite yoga teacher pay model from BOTH the teacher’s and studio’s perspective.
Why is this my favorite yoga teacher payment model?
Because it best-aligns the interests of both the yoga studio and the teacher.
A yoga studio wants to minimize fixed costs. A yoga teacher wants to earn a base amount. Both the yoga studio and the teacher want to reap financial rewards when attendance is high.
As a studio owner you might object with “but it’s my studio’s popularity that brings in all the students so why should I pay a “bonus” for that high attendance?”
That’s a good objection. However, my response is to consider the long-term with respect to teacher loyalty and teacher performance incentives.
If a teacher comes in and knows their pay is based on attendance, the last thing they want to do is lose students for their class. The pay per student bonus is an incentive for the yoga teacher to do their best job. When teachers run a great class, it’s also great for the studio.
If attendance falls consistently, the teacher’s pay may drop so low that they’ll stop teaching for you, saving you the unpleasant task of not inviting them to teach anymore.
From a teacher’s perspective, if they’re paid per head, they also have the incentive to market their classes and bring in extra students. The downside for the student is if so many students show up that the room can’t accommodate them all. This is a never-ending problem (a good problem) for yoga studios.
Popular yoga teachers may wish to ask for “capacity bonus” as well to compensate teachers who consistently fill up a class.
Teacher rents the space for a flat rate
This yoga teacher pay model places all the risk on the teacher. But it also rewards the teacher in the event a class is well attended.
From a yoga studio perspective, I don’t care for this model because the studio becomes a facility rental. I always prefer the potential for financial reward for a job well done. When renting space, the studio receives a fixed rate and that’s it. It reduces the incentive for a studio owner to continue branding the studio and building up a loyal student body.
Moreover, if a class isn’t well attended, the teacher will stop renting the space. This leaves you with no class. In some cases it’s better to run classes that aren’t well-attended because you want to offer class times throughout the day as a full-service studio. If you rely on rent only, that revenue can dry up at any time.
From a teacher perspective, it’s risky and potentially presents a lot of work outside of the classroom with respect to attracting students and running the business. The yoga teacher will need insurance, take payments and essentially run a business which can be quite a bit more work. That said, if a yoga teacher is planning on opening their own studio and is building up a loyal student clientele, the rental model can be the best. In fact, many yoga teachers rent space before opening a studio.
Naturally by renting space, a yoga teacher who fills up a class will do well financially (assuming the rent is reasonable and class rates are good).
Yoga teachers who rent must keep in mind that they may be responsible for getting yoga insurance.
Hybrid yoga teacher pay models
You can certainly get creative with how you pay teachers. A combination of any of the above models can work well in aligning the interests of both the studio and the teacher. As I set out above, I like the hybrid flat rate plus pay per student bonus model because it nicely aligns everyone’s interests.
When deciding on how to pay your yoga teachers, you need to consider the financial cost, financial reward incentives and loyalty incentive perspectives. Great yoga teachers aren’t easy to find (because they often start their own studio). If you have a great yoga teacher teaching in your studio, and that teacher brings in plenty of students, you’ll have to pay more.
Whenever possible include incentives for yoga teachers to attract students. The best incentives are payment methods that reward teachers for attracting students such as price per student and/or renting space to the teacher.
Always keep in mind that any yoga teacher you employ or bring in to teach a class can open a yoga studio at any time. If your studio’s students are loyal to that teacher, you could lose a lot of students.
Therefore, you also want the core of your student body to be loyal to you and your studio. How do you foster student loyalty? Always offer terrific classes, a clean environment, be available and friendly … over deliver on what students want and pay for.
What’s the best yoga teacher pay model?
There is no one best model. The best model depends on the situation. However, the test to use is choosing a model that best aligns the interests of the studio AND the teacher.
- A studio looking to grow may place more emphasis on providing a huge incentive for teachers to attract more students.
- A well established busy studio that is often at capacity may prefer not sharing the attendance volume reward and instead pay flat or hourly rates.
- A yoga teacher teaching part time for fun may be content with a flat rate fee.
- A yoga teacher looking to build a business for the long term may prefer renting space and building up a clientele.
Don’t forget about insurance
Regardless of the yoga teacher payment model, both the studio and teacher must ensure the teacher, while teaching is insured. The yoga teacher pay may impact who must have yoga insurance.