Staring at a decade of budget gaps - crpe.org...More than getting talent and keeping it Redesign...
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Staring at a decade of budget gaps: Why leveraging talent will affect your bottom line in the coming years Marguerite Roza Research Associate Professor Georgetown University [email protected]
Transcript of Staring at a decade of budget gaps - crpe.org...More than getting talent and keeping it Redesign...
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Staring at a decade of budget gaps: Why leveraging talent will affect your bottom line in the coming years
Marguerite Roza Research Associate Professor Georgetown University [email protected]
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Built-in cost escalators outpace revenues for K12
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Public education staffing had been growing through recessions and is only now starting to fall!
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# Adults
Total Comp
What will happen to staff in coming years?
Number of educa-on staff per 1000 students peaked in 2008
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Cost escalation of production components
Baumol’s disease Source: Catherine Rmpell, “Man v. Machine. Economix Blog
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Structural deficit: Benefits consume an increasing share of expenditures
Author’s analysis on NCES reported data 6
Na0onally, school staffing benefits load on salaries grew from:
• 28.9% in 2004 to • 33.5% in 2008.
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Fundamental Tradeoff:
# Adults Total Comp
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How does pay vary across course type?
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Math/Science teachers earn less than other teachers
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Regular Ed Classroom
How is talent being leveraged inside high schools?
Source: hKp://nces.ed.gov/programs/digest/d09/tables/dt09_033.asp
Honors/AP Classroom
$61K 22 students
$73K 14 students
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More than getting talent and keeping it
Redesign delivery to … – Get the talent to the high impact positions – Expand the reach of that talent – Using that talent to reduce the need for so
much labor going forward
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What do you prefer? (survey by Goldhaber & DeArmond) $5K bonus or 2 fewer students in
each class you teach
$5K bonus or 1/5 of an aide
$5K bonus or 3.5 hours more prep
0me per week
83%
88%
69%
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Innovations provide insight into productivity improvements: Rocketship
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Innovations provide insight into productivity improvements: Rocketship
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Shorter work year drives up teacher benefit costs per week
$649
$265
$239
$0
$500
$1,000
$1,500
$2,000
$2,500
Teachers Computer Programmers
Accountants
Per year Per week!
$22,080
$12,743
$11,463
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Teachers Computer Programmers
Accountants
Benefits
Wages
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Benefits illustration
Options: • Cafeteria plan • District contribution follows salaries • Negotiate increases in total
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Benefits illustration
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Factors that affect pension liabilities • Wage growth (particularly in years just prior to retirement). (Better to give level $ raises not % raises. Also, eliminate policies that enable spikes in pay to late career staff).
• Pension COLAs (Generally not in the contract and can be altered to reflect economic conditions).
• Employee contributions (Increasing employee contributions to pensions lowers liability).
• Retiree health benefits (and retiree contributions to those). (Also generally not included in contractual obligations).
• What counts as a vesting “year”? (Pension accrual should be tied to actual days worked, vs furlough days, etc.)
• Arrangements for new entrants
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