Klarinet Archive - Posting 001268.txt from 1998/04

From: Jonathan Cohler <cohler@-----.net>
Subj: Re: Pay analysis of Full-time Orchs
Date: Wed, 22 Apr 1998 20:49:20 -0400

Ed Lacy wrote:

>On Wed, 22 Apr 1998, Jonathan Cohler wrote:
>
>> Now in most businesses (such as software and publishing with which I am
>> familiar) the average tenure of an employee is more like two or three
>> years. These businesses consider a recruiting cost of 10% to 20% of the
>> annual salary to be reasonable.
>> [much snipped]
>> So by this logic the orchestra should be willing to spend roughly
>> $20,000 to recruit a second clarinet player.
>
>The problems with this line of reasoning include the following:
>
>1. An orchestra is not like "most businesses."

Of course.

> In your business, you can
>figure your costs including personnel recruiting, add in your desired
>profit margin, and set your prices so that the bottom line works out. An
>orchestra cannot do that. Typically, orchestras earn less than half their
>total annual budget from sales of their "product" - (sales of tickets to
>concerts). The remainder must be made up from donations from individuals
>and businesses, and a pittance from governmental agencies. A few realize
>a little from permanent endowment funds.
>

None of this speaks to the issue.

The fact that orchestras have multiple revenue sources (i.e. customers) is
irrelevant. Microsoft has multiple product lines, and multiple types of
customers (VARs, Resellers, end-users, ...). Ticket buyers are one revenue
source for orchestras, corporations are another, individual donors are
another, public funding is another, ...

If you are trying to say they are orchestras are different from other
businesses and therefore recruiting costs should be different too, that's a
reasonable statement. However, the difference must be a function of the
value of the employee to the financial success of the operation (orchestra
or business).

Are you saying that orchestra members are less valuable to the financial
success of an orchestra (~100 members) than an employee of, for example,
Microsoft (which has tens of thousands of employees)? Does one employee at
Microsoft make as big an impact on the quality of Microsofts products as
does one player in a 100-member orchestra?

It seems to me that a player in a major orchestra has a much more direct
and substantial effect on the quality of the product than does a single
employee of medium or large corporation.

>2. The cost of recruiting is only one of the expenses facing orchestras.
>There are expenses for hiring soloists, rental or maintenance of a
>performance facility, rental and purchase of music, and dozens of others.
>In "most businesses," a figure such as $20,000 can be allotted for
>recruitment costs, and the assumption will be that the employee chosen
>will add more value than that to the company's balance sheet. It doesn't
>work that way for orchestras.
>

I am well aware of the costs associated with running an orchestra, as I am
Music Director of one (albeit a small and rapidly growing one).

Your statement that businesses assume that "the employee chosen will add
more value than that to the company's balance sheet" is fine, but you don't
say why this is not true for orchestras. It seems that based on my
argument above, it should, if anything, be more true for orchestras!

>Certainly orchestras should employ sound financial planning and budgeting,
>and too many have not and have gotten in trouble as a result. However,
>probably a more useful exercise would be to compare such expenses among
>orchestras rather than comparing orchestras to companies which sell
>refrigerators, television sets, automobiles, or computer software
>services.

Agreed. I would love to see some budget figures for orchestras that
include breakdowns for recruiting costs and the like.

Does anyone have access to these figures?

-----------------------
Jonathan Cohler
cohler@-----.net