The increase in National Minimum and Living Wage rates due to come into force on 1 April will doubtless be welcomed by many employees and families struggling to make ends meet during the current cost of living crisis. On the other hand, the increase poses a number of challenges for employers, both financially and logistically, with schools being among the most affected.
The increase in rates before and after 1 April 2023 is substantial and is summarised in the table below
||23 years and over
||21 -22 year olds
||18 – 20 year olds
When budgets were put in place for the current academic year it is unlikely that many schools would have budgeted for an increase in these minimum levels of pay at such a level. Consequently, the first challenge for schools will be to ensure that they have the finances in place to meet these minimum requirements.
Secondly, an increase in the minimum wage/living wage at this level will not only impact upon those whose roles are traditionally paid at or very slightly over minimum wage rates such as midday supervisors, cleaners and some kitchen staff, but it is very likely to also impact upon higher graded roles such as teaching assistants, potentially including more senior/highly skilled staff. This presents schools with a further set of concerns.
Accepting that the increase will impact upon a number of staff, and that there is a minimum cost in ensuring that all staff are at least paid at the applicable minimum rates, schools then face the question of whether to simply pay all staff whose pay will be increased by the change in law at the new minimum rate or whether they seek to retain a different level of role grading across their workforce.
Schools minded to keep pay differentiation in place will have to firstly consider the financial implications of doing so. In some cases it may simply not be possible to apply wider increases that seek to maintain some pay differentiation between roles. The downside in not being able to (or choosing not to) apply wider pay increases is that this may impact on the morale of those employed in higher graded roles who may ultimately choose to work elsewhere. It is well documented that most of the main supermarkets and retailers are paying higher wages than most schools pay their teaching assistants. This has led to increasing shortages of teaching assistants as they turn to higher paid roles which generally carry less stress and responsibility. If experienced staff do not feel valued, it increases the likelihood that they will move on and/or change careers.
Increasing wages more widely and maintaining the differentiation in pay between roles is not, however, necessarily an easy option. The impact in raising salary levels is not a short-term expense but a longer-term one that would need to continue to be covered. Continuing to shoulder those costs may not be possible in the longer-term if funding does not increase and some schools may find themselves in a position whereby they need to reduce support staff numbers in order to counter the rising employment costs, this in turn is likely to have a detrimental impact on pupils and the provision provided by the school.
One alternative suggestion would be to increase all salaries up to required minimum levels for the remainder of the current academic year and to then seek to reintroduce a graded pay scale for academic year 2023/24 in the hope that a similar situation does not arise in a year’s time. Adopting this strategy, new pay levels for September should be communicated clearly and early, in the hope that key support staff are not tempted to look elsewhere in the meantime. This does not, however, alleviate some of the longer term challenges around financial sustainability.
Given the external pressures faced by schools in this regard, having clear retention strategies and career progression paths in place becomes increasingly important for schools. Providing staff with “added value” in the form of career development, learning and a genuine culture focused around employee wellbeing may help to provide more effective and sustainable long-term retention of staff within schools. Such career progression, development of skills and ability to take on new responsibilities could then also be linked to higher rates of pay, which is likely to be preferable to upgrading the pay of all staff.
Please do not hesitate to contact one of our education sector specialist team for more information as to how we may be able to assist schools and trusts in these areas.