Save Money in this School Budget Cycle

Every organization likes to do more in fewer resources so as to improve its efficiency and productivity. Schools are no exception to this. As the budget planning cycle is about to start for schools, this article helps you to identify where you can save cost this year and for the years to come.

Saving cost does not mean not spending. On the contrary, it means spending and saving judiciously so as to grow the school.


Saving and Spending Judiciously

There are 3 major expenses that schools do today. Let us see how you can decide to spend or save your cost judiciously on these major expenses.

Technology Expenses

Sure! Technology makes managing a school and teaching easier. But spending on technology without knowing if your teaching or office staff is ready to leverage the technology is the spending done at a wrong time. Such a spending results in low Return-on-Investment (ROI). Worst of all, it can make the staff technology-averse. This severely impacts school operations for a long time.

You may say that we can address this issue by hiring more technology-ready staff. But this is easier said than done. First, such a staff comes with a considerable cost and second, staff rotation in search of a right person leads to heavy cost of attrition.

What do we do?

First, it is important to evaluate how ready the staff is to adopt a technology, what would be the loss if you buy the technology now, and what would be the right time to adopt the technology? These questions can be answered by analytics program such as myNalanda’s Teacher Skills Analytics in which teacher assessment on technology readiness is one of the major focus.

Second, it is always cost-effective to train the existing staff to adopt a technology than finding a new person for the same. Why, let us see that in the next point.

Cost of Attrition

Research shows that teacher’s salaries constitute up to 70% of operational expenses of a school each academic year. It is also a common knowledge that schools today face severe attrition of teachers every year. Teacher attrition in school ranges from 10% to 40%. Even if we take minimum attrition at 10%, it means that 10% of teachers leave their jobs every year. More worrisome fact is that each teacher leaving the job is double the loss to school. For example, if a teacher’s annual salary is 3 lacs, then the loss to a school if this teacher leaves is Rs. 6 lacs. This loss includes just the financial loss* and not the other adverse effect it creates.

Let us take an example to understand the impact of attrition on school’s operational expenses. Let us take a school of 50 teachers with average salary of Rs. 3 lacs per annum. The following example illustrates the details:

Total teachers50
Average annual salary of each teacher 
Total operational expenses on salary each year1.5 Cr
 By 10%, number of teachers leaving job each year 5
 Loss due to 1 attrition 6 Lacs
 Loss due to the attrition of 5 teachers 30 lacs
 % loss of attrition compared to total salary expenses 20%

This also means that if we can stop at least one attrition from happening, we can save a loss of Rs 6 lacs. Needless to say, money saved is money earned. The same money is then available for better usage.

But how do we identify which teacher we can stop from leaving? What are the parameters we must take into account to arrive at this decision? This is possible only when we know the skill profile of teachers and from that we know whom to retain and whom to let go. Typically, an advanced level of teacher assessment on skills provides such insights.

Cost of Training and Development

Different academic boards invest different amount on teachers’ professional development. It is said that IB or IGCSE boards invest anywhere close to 2.5 lacs on each teacher for training every year. For ICSE schools, this amount is up to Rs. 75,000/- and for CBSE, it is said to range up to Rs. 5000/-.

There are 3 major issues due to which many schools don’t get results even after spending such a substantial amount on teacher training.
First, these training, most of the times, lack follow up assessment or assignments. Due to this, training acts like a one-time steroid shot that gave a temporary feel-good factor but failed to give real benefit.

Second, very rarely schools know which teacher to send for which training. This is because the schools don’t capture the core teaching skill that needs to be developed in a teacher. It is practically difficult for schools to give such a minute attention so as to find the real skill that needs attention in each teacher. As a result, typically teachers are sent to training based on their classroom observations. This leads to wrong teachers being sent to wrong training. As an effect, schools lose money.

Third, skill set of each teacher is different and therefore one-training fits all approach does not work. However, many schools end up doing just that. Thereby, schools send teachers to training in bulk and end up burning money without any results. Worse, it gives teachers no sense of entitlement and such training is considered not more than a professional time-off or professional-outing.

To save this loss, schools need a thorough analysis of teacher’s skills so as to identify their strengths and areas of development. An analysis like myNalanda’s Teacher Skills Analytics can identify the precise training needs at individual teacher-level, section-level, and school-level. Based on your training budget, it also recommends the trainings that the school must undertake on priority and the precise teachers who must enroll those training. With this approach, schools not only get higher results from training they end up saving the training budget.

End Note

If schools use advanced programs such as Teacher Skills Analytics, they can either spend their budget wisely or can save anywhere from 6 lacs to few crores rupees, depending on which spending you are considering.

* The cost of single attrition includes advertisement cost, man hours of people and the associated cost involved in hiring the teacher, training and grooming cost, and the cost of repeating the same cycle if the teacher leaves and hiring new teacher and making her productive. This cost does not include intangible costs such as effect of new teacher on children, load of completing the syllabus on other teachers, due to less number teachers, effect on parents’ satisfaction, and overall school image, etc.

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Teacher & Student Skills Analytics for Schools | myNalanda