Business Manager Compensation 2011–12: Salaries
School Heads should determine the compensation package that will recruit and retain the best Business Manager possible. Having the right person in this position, one who is capable of covering multifaceted tasks that call for a variety of skills (finance, human resources, facilities management), is crucial in providing the School Head with the support needed.
The Business Manager will have primary responsibility for creating the first draft of each year’s operations budget, prior to the Head’s and the Finance Committee’s involvement. This business professional will need to have (or develop) the skill of “translating” your strategic financial plan—a six-year, 13-line document in ISM’s approach—into the detailed, multipage operations budget that your school will use day-to-day throughout the upcoming school year. The Business Manager will also be charged with presenting the operations budget in this 13-line format several times during each school year to the Board of Trustees, most of whom will not be “financial people” and who will be dependent upon this presentation to participate meaningfully in the annual conversation about the degree to which the school is tracking appropriately along its intended financial vector. Moving between multipage operations budget and single-page strategic financial plan will be a fundamental task for your Business Manager.
The Business Manager position typically encompasses both Chief Financial Officer and Senior Facilities Manager responsibilities. Beyond these crucial and strategic roles, the Business Manager’s service attitude toward faculty/staff/students (internal service) and parent body/alumni body/wider community (external service) can be expected to impact morale, institutional image, and, via the inevitable ripple effect, student and faculty recruitment and retention. The impact of the right—or the wrong—Business Manager is substantial and widespread. Compensation must be commensurate with the position’s impact.
here are no mandatory rules for a School Head when determining the appropriate compensation for a Business Manager. Factors that might dictate salary include prior experience, special skills, the responsibilities assigned, the complexity of the school operation, the Business Manager’s number of direct reports, and the conditions endemic to your school or your locale. Also, be aware of the salaries offered for similar positions in comparable schools, other nonprofit agencies, and employers in the public sector for persons with that skill set, e.g., accountants.
According to ISM’s recent compensation survey of I&P schools, the average base salary for all full-time Business Managers is $103,652. The typical respondent had an average 17.46 total years of experience, and had worked at his/her current school an average of 7.34 years.
Other key school attributes revealed in the survey (e.g., school size, budget, region) need to be examined to see if you are paying your Business Manager appropriately.
Figure 1 shows average salary by region. West North Central is the lowest ($71,008) and Mountain and Southwest the highest ($141,400). Some areas of the country have been hit harder by the poor economy than others, and this is reflected in the data. Within each region, salaries spanned wide ranges depending upon size of school, location (e.g., metropolitan, suburban), cost of living, etc. Your most effective indicator is the compensation of other similarly positioned schools in your area in which the overall job responsibilities are comparable.
|Figure 1: Average Salaries for Business Mgr./CFOs
More students (and more employees) at a school generally translate to a higher salary. (See Figure 2.) However, in our survey results, Business Managers in schools with enrollments between 1,000 and 1,499 showed a diminished compensation. In the results of ISM’s 2006 survey, we noticed a similar dip in the 550–850 range of enrollment.This variance in salary may be as much a function of the price/product/process equation as is size of school. Quite a few of the Catholic/Christian schools in the 1,000–1,499 range (and in the 550–850 previously) are “price-value” schools, and this may explain the salary dip.
|Figure 2: Average Salaries for Business Mgr./CFOs
(by Student Enrollment)
Budget is also a consistent gauge of salary. As seen in Figure 3, the low is an average salary of $36,900 for a budget between $1 million and $2 million; the high is $193,800 for a budget above $25 million. This wide range in compensation may reflect the increased responsibilities (and an assumed higher degree of complexity) for the role of the Business Manager in schools with a higher budget.
|Figure 3: Average Salaries for Business Mgr./CFOs
(by Operating Budget)
Generally, a Business Manager’s salary increases commensurately with the complexity of the school. There is, however, no single set of factors for setting the salary of your Business Manager. Your school’s needs, coupled with the available talent pool in your community, will drive the salary figure—whether you seek to retain or recruit a Business Manager.
While job satisfaction is important, the lure of more lucrative opportunities from other schools and the public/corporate sector cannot be ignored. Set your compensation appropriately, monitor the often-expanding workload of the Business Manager, and be vigilant concerning outside competition for this key employee. This is important to keep in mind if your school is competing in the market for talented business leadership.