As the 2022-23 school year gets into full swing, our first article this year is about tackling the important work of setting your faculty compensation. For a variety of reasons, including the stresses arising from the COVID-19 pandemic, attracting and retaining good quality teaching staff is becoming increasingly more difficult. In addition, with inflation at levels that we have not seen for decades, staff are expecting significant salary increases. Given this set of circumstances, international schools are going to have an interesting set of hoops to jump through this year. In this article our Managing Consultant Russell Cooke looks at what Schools will have to do to meet this challenge and the importance of innovative compensation models and good articulation of the benefits of teaching at their school!
The primary discretionary budget drivers for most international schools are tuition rates and faculty compensation/benefits. Operating budgets are then determined by expected levels of enrolment, and the number of teaching staff required. A more in-depth understanding of the marketplace prior to making determinations about these drivers enhances a school’s ability to make better decisions about its competitive positioning relative to peer schools. Other school’s tuition rates are more readily available to gain an understanding of your market position. However, faculty compensation and benefits will require benchmarking using organized compensation surveys.
As such there is a great deal of importance in having access to salary market data. As an international school your market may not be easy to define, you are in theory attracting your faculty in competition with all other international schools around the world. You should identify those schools which you see as peers or competitors, who could be alternatives to the faculty that you want to recruit. For this group of schools there needs to be a salary survey, preferably one which is completed annually. The survey results should be able to provide you with reliable market percentile data and can show you where you currently sit in that market. You may be lucky enough to belong to a school association that conducts compensation surveys or part of a school leadership group in your country which conducts salary and benefits comparisons. This survey will enable you to articulate where you are, which is important in the discussions to be had on where you want to be.
The discussion about the market position of the school’s compensation is a strategic one. The School Board should be the one that gives direction on this. The school administration then has the responsibility to create a budget that can deliver a salary scale which meets this strategic salary goal and of course has corresponding tuition fee increases that are acceptable to the community.
In developing the nuts and bolts of your compensation package you should take the following into account:
Set a maximum entry point on your scales which is attractive to potential employees. If you have a step system, do not give the scale too many steps or too few, particularly if you have a high maximum entry point. Consider how many years at a minimum you would like to retain staff and make sure there is a step progression for at least that number of years.
Involve a trusted and representative group of faculty members to give you feedback on your ideas and to make suggestions on how to finesse the new compensation package to achieve maximum impact. This group is also a great resource to consult on how to present the compensation changes to faculty meetings, so it’s worthwhile listening to them.
As you move existing staff on to the new scale you should be prepared to make some individual adjustments that can be grandfathered or given a sunset date, so that no staff member is negatively affected by the implementation of the new compensation scheme.
Keep the compensation package as simple as possible to understand. In a recruiting situation, a potential faculty member should be able to easily understand what they could be earning.
If you are revising compensation, take the opportunity to also tidy up and improve the language in your contracts.
In presenting contracts details for the revised compensation package, remind employees that there is more to compensation than salary alone. If you do not do so already, it is worth considering preparing a total compensation statement for each employee, listing not only wages and retirement contributions, but also things like insurance plan contributions, professional development funds, and tuition remission.
Revising faculty compensation is a major project for a school’s HR and Finance department. It is further complicated through its connection to the budgeting process, faculty contract issuance and the recruiting season. It is important that all the work starting with the gathering of market data to the cross checking of the revised individual contracts, is completed to meet the timetable of these connected processes. It is important to factor into the project planning the amount of time needed to communicate. To engage stakeholders, to have individual meetings and finally to deliver effectively and positively what should be some good news to faculty.
Finally, your salary and benefits are both real and important, however now is the time to not only consider more closely what those factors entail, but also to work out your school’s value proposition to faculty and how best to share that information in motivating and influential ways.
Faculty are attracted to work at a school because of its mission, so develop ways to communicate this clearly. Develop a teacher profile that fits with this mission, so that you know what kind of faculty you are looking to attract and retain.
School culture is highly important to staff, it does not cost anything to develop community. As we emerge from a workplace restricted by Covid-19 requirements, think about ways to improve your faculty onboarding and create community for them.
Consider your professional development offering, do your staff rave about it? Have a process to gather staff feedback and then act on it.
The point is that no international school will be able to increase faculty salaries in a way that outpaces, or even keeps up with, inflation, making it more important than ever to remind employees that there is more to compensation than salary alone.
At Sage Consultancy our team has the experience to synthesize compensation information, highlight the distinct characteristics and components of various models, and summarize the outcomes these strategies achieve for the international schools. We help school leadership in making the desired change their school is seeking regarding faculty compensation.