The demand for teachers is high and the number of teachers in the pool is shrinking. It is challenging to recruit teachers from an increasingly competitive marketplace and to pay them the salaries that will attract and retain them.

Since staff salaries and benefits often comprise 75% to 85% of most independent and international day school budgets, schools are aware of the need to spend scarce resources wisely.

Teachers want more than competitive and fair compensation. They also want to have some control over their classroom curriculum; feel a strong sense of community and collegiality; interact with a reasonably respectful parent body; and work for administrators whom they can trust and respect.

We also know that teachers are influenced not just by money but how that money is paid. In other words, compensation design and its distribution over time has both dramatic and subtle effects on teacher behavior and whether teachers wish to stay and whether talented new teachers can be recruited.

Some schools hire teachers from the marketplace at salaries that may be substantially higher than what they pay to those who were hired years ago but who have the same number of years of experience. That is because fewer teachers are now entering the profession, and more are leaving it whereas some years ago, the demand for teachers did not exceed the supply. Thus, the salaries of internal, experienced teachers are falling behind those who are hired from the outside. In interviews with teachers worldwide, this Consultant hears that teachers are increasingly aware of this. Furthermore, the average annual faculty salary increases at most schools have not kept pace with a changing, more competitive marketplace and in some cases with the cost of living. 

In our work with independent and international schools, this Consultant often analyzes salary compression. Compression refers to losing salary ground over time as years of experience increase. This typically occurs in the discretionary model for mid-career teachers who did not negotiate their entry level salary (and/or annual increases) aggressively and thus tend to receive relatively low annual raises on top of an already low base. It can occur in the lock-step model when there are periodic side-bar changes to the scale to benefit certain individuals or groups.

This Consultant has two rules of thumb which if followed, tend to alleviate the common salary compression problem. First, the highest salary should be at least two times, or better yet two- and one-half times, that of the starting salary. The second rule of thumb is that there should be at least a $7,500 average increase in the average salaries (not the median) between cohorts or five-year experience groups.  

Since school heads often must raise the bar at the entry level to be able to compete in the marketplace the first cohort (0-5 years) is often doing well. Or the senior faculty (15 to 20 years) who have been most influential in tinkering with the salary system over time may be the group doing the best in terms of total salary.

On the other hand, it is often the mid-career, and the slightly above mid-career teachers, who may be starting a family and/or planning to buy a home who are most hurt by salary systems. However, through tuition remission a school can sometimes provide an offset to less competitive salaries. 

It is often the mid-career teachers who are least happy, and that unhappiness can be very contagious. It only takes six disgruntled teachers out of a faculty of 60 (or 10%) to turn the entire culture sour.

Most schools do not have a philosophy of compensation that relates to their mission, and therefore they do not have a salary system that is drawn from a well-articulated philosophy of compensation. Most schools have adopted salary systems from other schools without any relevance to their own history, culture or mission. Salary scales that are based on longevity alone or on longevity plus graduate credits often have nothing to do with the mission of the school. That is how problems begin.

Schools need salary systems that give teachers a modicum of predictability and certainty while at the same time giving them the tools to influence their own future earning power. Those tools should be focused on the philosophical and mission-based outcomes of the school and also enable heads to reward in one fashion or another: quality of teaching in the classroom; mentoring fellow teachers; advisory and pastoral support; openness to change, innovation and constructive criticism; and going that extra mile without always expecting to be paid for it. 

These systems need to support collegiality, enhance trust, and still provide for growth and career advancement so that teachers not only want to stay but advocate the school to their friends.

Littleford & Associates has assisted over 3200 schools worldwide since 1983 in this effort to design supportive, mission based compensation, evaluation and benefit systems that can stand the test of time.