“Outdated” government teacher pay policy may cause more shortages in the profession after the pandemic, report warns

The report, published today [Thursday 20 May] by the Education Policy Institute (@EduPolicyInst) and funded by the Gatsby Foundation (@GatsbyEd), finds that after a surge in teacher numbers following the pandemic, the subsequent economic recovery could result in a large proportion of this new intake quitting for other occupations. 

The government’s approach to teacher pay in England is outdated, inflexible and may lead to a greater number of teachers leaving the profession over the next few years.

While improvements to the wider labour market after a recession often result in many teachers moving to alternative, higher-paying jobs, the report shows that the government’s approach to setting salaries, together with its lack of incentives for teachers to remain in the profession, may only serve to exacerbate future shortages.

The EPI study “Local pay and teacher retention in England” finds that while pay is not the only reason behind teachers’ decision to leave the profession, it can play a pivotal role. Policies such as modest, targeted top-up salary payments are shown to be highly effective at persuading teachers to stay.   

Despite the government acknowledging that the recent boost from the pandemic will only improve teacher numbers in the short term, it has recently removed such top-up payments – a decision which is likely to greatly hinder efforts to retain the recent influx of teachers.

The report also demonstrates that the current design of pay policy for teachers is a barrier to recruitment and retention. It finds that many parts of England struggle to attract and keep hold of teachers due to a large local “pay gap”, with competing occupations offering higher salaries on average – over £5,000 (11%) more in areas around London.

Researchers argue that closing these local pay gaps between teaching and non-teaching jobs is key to improving teacher supply: reducing the pay gap by 10% in the worst-affected regions would result in as many as 720 extra teachers in the local workforce.

However, current government policy for teacher pay offers little flexibility and prevents headteachers in these regions from being able to adjust salaries so that they are able to compete with higher-paying occupations.

In order to improve teacher retention as the country emerges from the pandemic, the report calls on the government to review its current pay policy so that teacher salaries are far more responsive to local labour markets – whilst also considering the distributional impact of any reforms.  

EPI also calls on the government to urgently reinstate its policy of additional top-up payments for teachers – both for those who are new to the profession, and existing teachers.

Key findings from the report:

The pandemic has boosted teacher numbers, but this may prove short-lived, with longstanding recruitment and retention problems likely to return

• Over the last decade, the teaching profession in England has faced serious retention problems, with teachers across most levels of experience more likely to leave the profession in each successive year since 2010.
• Early-career teachers have very low retention rates – in 2019, just two-thirds (67%) remained in the profession 5 years after they joined, down from 72% in 2010. 
• However, the Covid-induced recession has provided a temporary boost to the profession. Since March 2020, teacher training applications have increased considerably, leading to the government reaching its overall recruitment target for the first time in 8 years. (Though some subjects such as maths and physics still missed their targets).
• Teaching typically becomes more attractive to graduates in a recession, as it is largely unaffected during this period, offering stability to workers.
• But despite this recent surge in teacher numbers, research shows that teachers who were drawn into the profession by a recession are also more likely to leave once the labour market recovers. As a result, while the government has recently made some reforms to boost the status of the teaching profession, it is expected that longstanding supply issues will return in the near future.

Despite acknowledging the risk of a shortfall of teachers after the pandemic, the government has recently scrapped policies which are most likely to encourage retention

• Evidence suggests that pay can play a key role in teachers’ decision to remain in or leave the profession. While there are other factors which may affect teachers’ career decisions, pay is one that can be altered immediately by a change in government policy.
• Policies which boost teacher pay in a targeted way can have a positive impact on recruitment and retention. There is strong evidence that top-up salary payments given to those teaching shortage school subjects (such as maths and physics) and in more challenging schools, are likely to significantly improve retention.
• In 2019, following EPI recommendations, the government introduced new salary top-up payments for new teachers in shortage subjects (£2,000 per year if still teaching 2, 3 and 4 years after training) and for new teachers based in challenging areas of the country (an extra £1,000 per year).
• However, in response to the current, short-term boost in teacher numbers, the government has since cut these retention payments. This decision could prove costly, as it likely to hinder efforts to retain the large intake of new teaching graduates once the economy improves.
• To effectively respond to the expected shortfall of teachers in the coming years, the government should urgently reinstate these top-up payments for teachers, and expand them so that they cover existing teachers, as well as those who are new to the profession.

Large local pay gaps are impeding efforts to recruit and retain teachers – they must also be addressed to prevent teacher supply problems returning

• In some parts of the country, particularly around London, there are significant teacher supply problems, driven by relatively low local pay. Non-teaching occupations in these regions pay higher average salaries than teaching occupations.
• This is especially the case in areas around outer London. In areas such as High Wycombe and Reading, teachers earn over 11% less on average than non-teaching professionals, which corresponds to about £5,400 less per year.
• Smaller local pay gaps are associated with fewer supply problems in the profession. Just a 1% reduction in the local pay gap is associated with higher numbers of more experienced teachers in the workforce and fewer vacant teaching posts. The reduction is associated with a 2.6% decline in the proportion of teachers without qualified teacher status (meaning that there are more experienced teachers remaining in the workforce), and a 5% decline in the proportion of vacant posts.
• In those areas with very large local pay gaps, a larger, 10% reduction in the gap could reduce the number of teachers leaving the profession by 0.5 percentage points each year and increase recruitment by 3.4%. Taken together, this equates to an extra 720 teachers in the local workforce.
• While in theory headteachers have been granted freedoms to set teacher salaries, in practice, the present system offers very little flexibility because of funding restraints, meaning schools are unable to respond to local labour market conditions and narrow the local pay gap.
• To improve recruitment and retention and respond to challenges after the pandemic, the government should review its policy on setting teacher pay, so that salaries are more responsive to local labour markets. In doing so, it should take into account both the distributional impact of any changes and the impact on teacher supply.

Commenting on the report, James Zuccollo, report co-author and Director of School Workforce at the Education Policy Institute (EPI) said:

“While the government has put in place positive reforms to raise the status of teaching, this report shows that its current approach to setting teacher pay is outdated and could heighten the risk of an exodus from the profession in the coming years.

“After seeing a boost to teacher numbers following the pandemic, many of those who recently joined may now leave as the economy recovers. The government must do all it can to retain this large influx of new teachers. Our research shows that reforming pay to make teacher salaries more adaptable at a local level may be an effective way to do this. We need to give headteachers genuine flexibility so they can offer attractive salaries that are able to compete with other occupations.

“By changing its approach to setting salaries, and by reinstating recently scrapped financial incentives for teachers, the government is more likely to put the profession on a sustainable footing for the future and avoid severe supply problems.”

Jenni French, Head of Teacher Supply Programmes at Gatsby Charitable Foundation, added:

“Ensuring a supply of high-quality, experienced teachers should be a priority for education policymakers, so that we can provide a high-quality education for all pupils, irrespective of background or economic circumstance.

“We know that the most common reasons teachers give for leaving the profession are workload and behaviour. But science, particularly physics, and maths teachers leave the profession in even greater numbers than other teachers and this could be explained by the better paid opportunities outside the profession.

“We encourage government to use pay policies more effectively to help retain teachers, ensuring that salaries are more responsive to factors outside of teaching.”

Dr Mary Bousted, Joint General Secretary of the National Education Union, said: 

“The EPI report rightly highlights the severe teacher recruitment and retention problems, and the significant gaps between teacher pay and the pay of other graduate professions.  Changes to pay at a local level, suggested in the EPI report, will not however help with the recruitment and retention problems.  Effective action to tackle the teacher supply problems requires urgent improvements to teacher pay across education including the restoration of a national pay structure to support fairness and transparency. 

“A sticking plaster approach of recruitment and retention incentives, or other pay adjustments limited to certain groups of teachers, is no substitute for the holistic solutions we need.  The problems are system-wide and we need improvements to pay for all education staff. 

“The EPI report argues that there is too little differentiation in teacher pay, when there is in fact too much.  Further pay flexibility or regional pay would damage and not improve teacher supply.  The dismantling of the national teacher pay structure since 2010 has removed the fairness and transparency needed to attract and retain the teachers we need, so further dismantling would take us in completely the wrong direction. 

“The recruitment and retention problems are deeply rooted.  The problems extend across the country and across the curriculum.  They have not been solved by the short-term impact of the pandemic.  It is a travesty that teaching can only recruit to target when there is a national crisis such as the pandemic.  Any recent improvements will be short-lived unless there are urgent and significant improvements to teacher pay and conditions across education.  Instead, the Government plans to freeze teacher pay. On top of which, workload continues to rise – this is another key driver behind teachers leaving the profession, and in significant numbers within the first five years of starting teaching. 

“The NEU continues to press for the teacher pay levels and national pay structure that are essential if we are to tackle the recruitment and retention problems.”