Managing Your Center’s Labor

Table of Contents 1.Teacher Pay & Instructor Growth PlanJim Fee 2.System-Wide Metrics/TargetsDave Rosenbaum 3.Table Ratio ToolSal Cusanza 4.Training on Managing Your Center’s Labor Nicole Morse

Labor & Growth Labor is one of the Single Largest Expenses in Center Managing is a Critical Component of Profitability Variable Fixed Our Mission is to Unlock Potential Teachers are Critical to the Success of Mission Important to Look at Both Management and Growth

Teacher Pay & Instructor Growth Plan Teacher Pay must be managed to Center Budget at all times. Directors need headquarters' approval for any hires outside of the stated hiring pay. New hires $11.00/hour for Bachelor Degree New hires $12.00/hour for Master's Degree New hire math teachers $13-16/hour Cap for all teachers $19.00/hour All Teacher Training is $10.00/hour or a per set amount of training New Teacher Training Pay $100 Teacher Training Pay Paid at completion of training with 80% score on SUN Certification and 3 months of continuous teaching

Teacher Pay & Instructor Growth Plan 3 Month Review Meet with Director to: ‐Provide feedback on general observations ‐Go over Center expectations and discuss Instructor Performance Evaluation to be given at 6 month review ‐Answer any questions ‐Discuss importance of attending all staff meetings 6 Month Review Meet with Director to: ‐Discuss Instructor Performance Evaluation ‐Give program pay raise if instructor has completed the SUN Certification and has taught the new program in the last 6 months ‐Discuss importance of attending all staff meetings ‐Assign a new program if needed 1 Year Review Meet with Director to: ‐Discuss Instructor Performance Evaluation ‐Give program pay raise if completed and taught new program ‐Eligible for a 0-3% raise Directors must submit recommendations to the President for approval 30 days prior to the review Assign a new program if needed

Teacher Pay & Instructor Growth Plan Ongoing Annual Review Meet with Director to: ‐Discuss Yearly Instructor Performance Evaluation ‐Give program pay raise if completed and have taught new program throughout the year ‐Discuss importance of attending all staff meetings Eligible for a 0-3% raise Directors must submit recommendations to the President for approval 30 days prior to the review Assign a new program if needed Award annual Retention Bonus for continuous service ‐Years $50 bonus ‐Years $100 bonus

Sylvan Center Today versus 3 Years Ago Past Business Model Today’s Sylvan Center Manual learning plan development through assessment results Assessment is integrated into ILOs and automated learning plans are generated Paper based program with manual student progression reviews Sylvan Sync programs automate lesson plan progression reviews Brick and mortar retail centersRetail and institutional Satellite locations Program offering primarily remedialSylvan Edge Enrichment programs, enhanced college prep, and lower priced offerings

Maximizing Profitability Through Labor Management With the implementation of Sylvan Sync and business model, Directors of Education are spending less time on administrative activities. Is a Full Time Director of Education Role Required for your center? How should a center invest their employee’s time to maximize profits and minimize costs?

System Wide Labor Cost Territory Type and Revenue Size Center Labor Rates On average a center’s labor is 40% of revenue across all territories. Part Time labor averages 17% of revenue. Full time labor is leveraged as center revenue increases. Territory Type and Revenue Size Center Labor Rates On average a center’s labor is 40% of revenue across all territories. Part Time labor averages 17% of revenue. Full time labor is leveraged as center revenue increases. Source: Franchisee P&Ls submitted for the year 2013.

Table Ratio Management Improving Table Ratios from 1.8 to 2.4 Reduces labor costs by 8% and increases gross margin by 4% Decreases teacher hours by 25% Teaching cost per student session decreases from $7.50 to $5.63 Increases profit by $14,051 Improving Table Ratios from 1.8 to 2.4 Reduces labor costs by 8% and increases gross margin by 4% Decreases teacher hours by 25% Teaching cost per student session decreases from $7.50 to $5.63 Increases profit by $14,051

Director of Education in Operational Role Business Model DE time allocated to teaching and support labor Model Upside Cost Savings Full time DE position Model Risk Higher cost teaching and support labor replacing lower cost labor Savings of $13,887 Cost Analysis: Each DE teaching session costs 60% more than a $13.50 PT teacher Total annual additional teaching additional cost equals $10,638 for DE teaching and support labor Business Model DE time allocated to teaching and support labor Model Upside Cost Savings Full time DE position Model Risk Higher cost teaching and support labor replacing lower cost labor Savings of $13,887 Cost Analysis: Each DE teaching session costs 60% more than a $13.50 PT teacher Total annual additional teaching additional cost equals $10,638 for DE teaching and support labor

Lead Instructors in Place of Director of Education Business Model Center Director assumes greater operational role with decreased support labor rates Model Upside Lower cost model utilizing PT variable labor Reduced Breakeven Model Risk Lost revenue Center director spends less time on sales and marketing Pipeline conversion risk Lost opportunities for Satellite and Institutional contracts Savings of $29,779 Business Model Center Director assumes greater operational role with decreased support labor rates Model Upside Lower cost model utilizing PT variable labor Reduced Breakeven Model Risk Lost revenue Center director spends less time on sales and marketing Pipeline conversion risk Lost opportunities for Satellite and Institutional contracts Savings of $29,779

Director of Education in Operational and Sales Role Business Model Full time DE in 75% Operational and 25% Sales role Model Upside Revenue Opportunity Satellite and Institutional Contracts Potential of greater return on labor investment versus cost savings Model Risk Return on additional DE sales and marketing labor Profitability Comparison: Potential cost savings - $13,887 Revenue Required to B/E - $29,477 Business Model Full time DE in 75% Operational and 25% Sales role Model Upside Revenue Opportunity Satellite and Institutional Contracts Potential of greater return on labor investment versus cost savings Model Risk Return on additional DE sales and marketing labor Profitability Comparison: Potential cost savings - $13,887 Revenue Required to B/E - $29,477 Average Satellite Revenue$17,500 Gross Margin %52% Gross Margin $$9,100

Franchisee Tool - Center Models

Goal to Help Manage Part-Time Center Labor Forecasting Part-Time Labor Measuring Part-Time Labor

Teacher Pay Planning Tools – Forecast PT Labor Run the upcoming student scheduled hours Breakout your 1 to 1 and group student hours Set your planned table ratio Schedule non teacher PT labor to a goal

Teacher Pay Planning Tools – Forecast PT Labor Run the upcoming student scheduled hours Breakout your 1 to 1 and group student hours Set your planned table ratio Set an estimated cancellation rate

Teacher Pay Planning Tools – Forecast PT Labor Input earned revenue projection Set PT Labor % Goal Check your PT labor vs Goal Set your PT Support Labor

Teacher Pay Planning Tools – Set Schedule & Hourly Rate Set your schedule using an average hourly labor rate or per staff

Teacher Pay Planning Tools – Set Schedule & Hourly Rate Set your teacher schedule

Teacher Pay Planning Tools – Set Schedule & Hourly Rate Schedule PT Labor

Setting Table Ratios and Scheduling Part Time Labor Considerations Teacher hours at an optimal table ratio of 2.8 All scheduled student hours Actual scheduled hours after considering: Program requirements Group and 1 to 1 instruction Hourly student schedules Cancellation & No Show rates Table requirements

Teacher Pay Planning Tools – Tracking Time Spent Track your staff’s time to your desired level of detail Depending on how you collect your employee time for payroll, the tool gives the user the ability to report on how much of your staff’s time is related to instruction, sales and marketing, support customer service and administrative activities Be sure to breakout teaching time and teaching administrative and prep time

Labor Plan Tools – Input Actual Hours Input actual student hours and teaching hours Input your actual reporting to report against plan To get to a manageable table ratio, separate actuals for 3 to 1 and include only teaching time Include any Director of Education teaching hours to manage table ratios Input support labor part time hours and costs

Labor Plan Tools - Review Your Results Track your table ratios and teacher cost versus plan Review support labor

Teacher Training & Resources Proposed Training Timeframes for New Teachers Utilizing SUN as a Training Resource Labor Management Resources after Conference

Timing Guidelines for Teacher Training For a typical SylvanSync Reading and Math teacher, initial training should take a total of 7 to 10 hours to complete. Get teachers up to speed quickly with a systematic table management plan.

Timing Guidelines for Teacher Training Here is how a new teacher’s first formal teaching interaction should look like in a 3 hour shift: Hour 1: New teacher is responsible for 1 of 3 students at a lead teacher’s table Hour 2: New teacher is responsible for 2 of 3 students at a lead teacher’s table Hour 3: Depending on level of comfort, new teacher should be responsible for 2 or all 3 students at the table with support from DE or lead teacher On the following day new teachers can manage 2 students their first hour or two of the shifts and then 3 students towards the end of their shift. Budget 2.5 to 5 hours of training for each additional subject that a teacher takes on beyond reading and math. Hour 1 Hour 2 Hour 3 New Teacher Student Lead Teacher

Managing Your Center’s Labor Sylvan University Now (SUN) is a resource that is available to all franchisees and their center employees The center’s Learning Manager should assign appropriate courses for certification The Learning Manager should also ensure that students have a valid SUN log- in and password A module specific to managing your center labor is available on SUN– Labor Management ZeeTVLabor Management ZeeTV SUN includes recorded and digital lessons There is a curriculum guide available to outline the training path for teachers and directors An additional ZeeTV will be available to walk you through the tools presented today

Please see Paul Bungcayao and/or Romas Krywonis in Ballroom 3 following this presentation to sign up for a one-on-one demonstration of the Labor Management Tool (Sign Up Sheets Available Following Presentation)

Q & A