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Jason Schoenleber
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Jason Schoenleber

Analytics, Education, Forecasting, Negotiations

3 Key Steps for Conducting Negotiations with Data Analytics

Posted on Feb 21, 2017 11:20:04 AM

School district negotiations are often the most stressful, labor-intensive, and volatile times of the year for administrators.  There can be conflicting views related to salary increases being requested versus revenue constraint realities.  Health benefit costs seem to be unstable, but continually rising, year after year, so just keeping last year’s plan might increase costs by 5% or more.  Local taxpayers want the best teachers for their children, but might not feel too keen on the tax burden needed to afford those teachers.  State funding models are getting more complicated, making it harder to predict next year’s revenue.  All of this is happening even before you begin to data mine other districts’ salary data for benchmarking.  During this time, it is more important than ever to be able to manage expectations, present solid, factual data to support the district’s position, and communicate your position clearly. 

Setting the Stage

A key to managing expectations is to set the stage for where the district has been and where the financial picture may be going.  Often, many stakeholders at the table may not have all of the pertinent information, so it is up to the administration team to provide the background information necessary to establish realistic expectations.  Besides comparative salary and benefits information, here are some other data points that you may want to present:

  • Enrollment and demographic trends to establish a base for future revenues and expenses
  • Trends in instructional costs including any programs that are inflating at a higher than normal rate
  • Trends in local tax rates and property values to establish potential revenue streams

Learn how to use analytics when filing your district's administrative positions.

You will also want to look at salary and benefits trends, and show what that cost has been as a percent of the total operating budget.  Most districts spend between 70-80% of their operating budget on salaries and benefits alone, meaning there is little room for movement.  If changes in expenses are matching or outpacing revenues, then regardless of what the district would like to do, you may be restricted by what you are able to do.

Evaluate the Market with Solid Data Comparisons

What if you are the wealthiest district in an area, or the poorest?  How do you accurately compare salaries against such different local peers?  In the end, a district may have to compare against their local peers when negotiating, however it is important to see what the market is paying in districts of similar size, wealth and demographics.  Pulling this information to create better peer groups can assist in making better judgements on what you want to pay.  When comparing to local peers, make sure to look at similar degree types and positions.  If average salary comparisons come up, compare the number of staff and the experience levels as well.  An increased average salary may be caused just as much by a reduction in your lower-experienced staff count as an increase in salaries.  It may be best to compare average salaries in experience bands such as 0-5 years, 5-10 years, etc.  Finally, an often overlooked piece of the narrative is the academic return on investment (ROI) compared to your peers.   This might be test score comparisons, spending on certain programs or functions, or some other student performance/growth measures.

Running Scenarios and Examining the Impact

Probably the most important question that needs to be asked and addressed is, “What is the future financial impact of these scenarios on the district?”.  Many states require districts to provide a multi-year projection, but even if not required it can be critical to effectively communicating your position and decisions.  Additions to your staff, incremental increases to salaries, changes to health care plans and costs, and revenue projections should all be included in your multi-year plan and analysis.  There may be three scenarios on the table that are differentiated by the health plans, salary percent increases, or retirement contributions.  Running a projection on each of these scenarios then comparing them will not only provide the district with a clear understanding of which plan will potentially cost less, but combined with graphs can clearly communicate why your choice is obvious.  The goal is to present the data in such a way that your listeners draw the same conclusions you do; visual summaries of the data may be more effective than complicated spreadsheets. 

More and more we are seeing districts using data to tell their story with great results.  Negotiations will always be laborious, but a proper framework and the right analytics will make the process less painful than it has to be. 

Hear how Assistant Superintendent of Township High School District 113, Barry Bolek, saved $1M during teacher negotiations

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Jason Schoenleber is a Relationship Manager with Forecast5 Analytics in Naperville, where he assists clients with data analysis, and connecting them to the value of the Forecast5 product suite.  Prior to working at Forecast5, Jason worked for 3 years as a Solutions Consultant for Enfos Inc., advising corporate remediation directors on managing their financial debt obligation data through a SaaS platform and template modeling.  He received his Bachelors in Marketing from the University of South Dakota, and is currently pursuing his Masters in Business Administration from Northwestern University’s Kellogg School of Management.

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