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by Rebecca Lister | 14th Mar 2025

The Rising Cost of Employment in Schools: How HR Consultancy Can Help Reduce Costs and Improve Efficiency

Recent years have seen ever rising costs for schools, and now, with the Institute for Fiscal Studies (IFS) predicting costs will outpace funding for schools in 2025/2026, it is clear the financial struggle shall continue on.

Managing budgets while ensuring staff and students receive adequate support is a challenge. Our HR services for schools can provide expert guidance to help reduce costs and improve efficiency.

With the Government’s recommended rise of 2.8% in pay for teachers and no new funding to support this, school and academy trusts are searching for ways to reduce expenses while maintaining high educational standards.

By seeking HR expertise, schools can streamline workforce management, navigate employment law, and build a resilient, well-supported team. If you’d like to discuss your HR requirements in more detail, get a quote today.

What are common financial challenges education is facing?

Budget Cuts and Funding Constraints

As explored briefly above, arguably the biggest financial challenge for schools at the moment is budget cuts and funding constraints. The last decade has seen the implementation of a series of consecutive financial cuts for education providers. With rising costs and inflation, many educational institutions are struggling to maintain and employ enough staff to support pupils’ learning.

The IFS has estimated that costs are set to rise by 3.6% in the 2025/26 financial year, with school funding only rising by 2.8% alongside this. Undoubtedly, this will leave many schools in difficult positions as they are forced to make decisions when it comes to budget management. Since staffing is one of the largest expenses for schools, effective HR services for schools can play a crucial role in workforce planning and cost management.

Schools require large numbers of staff to help with the day to day running, teaching and supporting of students and the cost of staff can often be one of the largest expenses for schools. This is further compounded with calls for increasing pay for teachers, which many schools may struggle to meet. The failure to increase funding alongside these ever-growing staffing demands is putting extreme financial pressure onto schools to minimise impact on students and the sector as a whole.

High Staff Turnover and Recruitment Costs

Alongside funding and budget cuts, low retainment of staff within the education sector is also having a costly impact upon the finances of schools. Many schools are facing challenges in recruiting and retaining teachers and staff into the education industry. This has been a consistent issue for the sector in recent years and has contributed to the financial difficulties schools are facing.

Staff shortages are leaving many schools forced to use agency staff as a way to ensure teaching standards are maintained, to best support student outcomes. The cost of using agency staff can put immense strain on schools who already find themselves stretched thin. Furthermore, recruiting new members of staff as well as the resources needed to support this in terms of onboarding, training etc. can be costly and with high turn-over levels of staff, is becoming an ever-increasing expense for schools.

Low recruitment and retainment within schools can be attributed to a number of factors. Many individuals find themselves put off from a career in teaching due to concerns over low pay and high workloads. Working environments within schools can also play a huge decision making role with prospective staff.

Taking steps to nurture and support a positive working environment can be a great way to entice new employees into the industry and help to ensure staff feel happy and supported to remain in the profession.

HR consultancy services can provide strategic advisory services to improve recruitment and retention by developing competitive benefits packages, fostering positive workplace cultures, and implementing policies that address HR matters proactively. Schools and academies that invest in HR support can create environments that encourage long-term employee commitment, reducing turnover and associated costs.

Managing Long-Term Sick Leave and Absence Cover

Workplace absences due to long-term sick leave significantly contribute to the cost of employment in schools.

When high numbers of staff are off sick, schools are left with the financial burden of paying sick leave as well as finding absence cover or investing in additional resources to compensate for the absence. This can have a detrimental impact not just on the school as a whole but the quality of teaching being provided.

The absence of integral members of the workforce can disrupt the running of the school and can affect the culture of the workplace as other staff find themselves having to take on extra responsibilities/cover.

Looking to ensure your school has effective absence management policies in place, as well as providing appropriate support systems for staff can be a great way to combat high levels of absenteeism and keep costs down. Through expert support, schools can develop proactive strategies to reduce absenteeism and enhance workforce resilience.

Costly Legal Disputes and Tribunal Claims

Staying compliant and up-to-date with employment law can be a demanding task- especially in a busy school environment and disputes could arise at any moment.

Whether it be from a disgruntled employee or just a need for legal assistance, employment disputes are taking up an unnecessary amount of school’s budgets when financial constraints are already present.

Ensuring you are aware of all of your obligations as an employer goes a long way in ensuring your school remains compliant and helps to avoid costly legal issues.

By working with an HR advisory team, schools can stay compliant with evolving regulations and prevent avoidable legal conflicts. As part of our tailored support for schools we navigate complex employment laws and maintain best practices.

How Eclipse HR provides Expert Support Services for Schools

With all these financial constraints, it can be difficult to work out how best to juggle all of these demands. Seeking assistance from an external HR consultant can often be a great way to ensure schools can function efficiently and smoothly and have support as and when they need it.

At Eclipse HR, we specialise in HR services for schools, offering tailored solutions to help schools and academy trusts address key HR challenges. Whether it’s managing recruitment, reducing absenteeism, or ensuring compliance with employment law, our HR expertise provides practical solutions to help schools operate efficiently.

For more information on how external HR consultants like us here at Eclipse HR can assist your school, please read our article The Role of HR in Schools and How a Consultancy Can Help or to learn more about the HR Consultancy Services we provide and how we can best support you and your school, feel free to explore our website or get in touch!