Australian School Teachers Among the Highest Paid in the OECD

The OECD has recently released its 2019 report Education at a Glance: OECD Indicators, revealing that Australian teacher salaries are among the highest across the OECD countries. Actual average salaries including bonuses and allowances are 22% higher at upper secondary level, 32% higher at lower secondary level, 36% higher at primary school level and 52% higher at pre-primary level than OECD average salaries for those positions. Depending on the level of education taught, average Australian teacher salaries are 93-94% of the average of salaries of tertiary-educated workers. This places Australian teachers’ earnings among the highest in the OECD.

The annual starting salaries of  teachers at all levels are consistently higher than the OECD average, for example an Australian primary school teacher’s starting salary is US$44,287, compared with US$33,058 across the OECD. Salary progression is significantly faster for Australian teachers, taking only seven years for a lower secondary teacher to progress from the statutory starting salary to the top of the scale, compared with a 25-year average across OECD countries. While this may be beneficial for those in the early part of their teaching careers, the relative salaries for high-performing, experienced Australian teachers are low compared their OECD peers. This comparatively flat distribution of teacher salaries in Australia may make it difficult to attract and retain the highest achieving teachers.

Australian teachers do however have strong financial incentives to become school principals. Australian school principals are the second highest paid in the OECD, ranked above the US, the Netherlands and New Zealand.  Their salaries are significantly higher than the OECD average, for example at the lower secondary level, principals earn US$105,703 (A$154,094) compared to US$66,534.

In considering the remuneration of teachers, it is also important to consider measures of student performance. The Australian Curriculum Assessment and Reporting Authority has recently released the 2019 results of the NAPLAN assessments for primary school students in years 3 and 5, and high school students in years 7 and 9.  For years 3, 5 and 7, NAPLAN scores in reading, writing and grammar have improved over the last decade. For our most senior students in these assessments however, NAPLAN scores have declined over the last decade in all these domains.  Similarly, the PISA average performance of 15-year-old Australian students in reading, maths and science has declined significantly since 2000.

Information of this nature clearly creates a challenge for those endeavouring to ensure that the quality of the learning environment for young Australians is optimised. In circumstances where our most senior and experienced teachers have relatively flat salary progression, the attraction and retention of those teachers may be difficult, and this can have flow on effects for student performance.

Egan Associates recently reported on the agreement between the NSW Public Service Association and the Department of Education which has resulted in salary increases and role reviews of NSW pre-school and primary school support and administrative staff.  It is likely that these decisions will also lead to a review of pay equity for teachers relative to support and administrative staff, having regard to the training and qualifications needed to become a teacher. Over the past decade or more, the tertiary training of school teachers has shifted to a requirement of a four-year university degree.  This indicates that in the working population of school teachers there would be many who qualified under pre-university mandatory education requirements.

The challenge from our observation, having engaged in work value deliberations for more than four decades, is that the degree of granularity in most work value or job evaluation methodologies does not effectively differentiate work value among positions particularly comparable to a preschool teacher.  This arises from the adoption of methodologies established more than half a century ago which were underpinned by the concept of a just noticeable difference which adopted a 15% move up or down a work value factor scale.

With work value principles being applied at trades, trades assistants, junior administrative roles and others, current pay equity reviews are leading to a clustering of positions which are different in their entry requirements to tertiary education, the skills and judgements required to be exercised in the workforce and the nature of a position’s accountability.

Some academic work has been undertaken which postulates that certain invisible skills can be observed as essential in the workforce and lead to a differentiation between occupations.  These soft skills include empathic and emotional intelligence.  At this stage, they have not been incorporated in points factor methodologies to the best of our knowledge. The incorporation of these soft skills leading to quantification of difference in work value and consequently pay equity will become a challenge in areas that might be seen as related which would include preschool teachers, nurses, disability care workers and aged care workers to nominate a few.

Egan Associates look forward with interest in how work value differentiation is addressed and indeed how hierarchical classifications might be developed for teachers.