An examination of teachers’ pay - updated – An examination of teachers’ pay – updated,...

Incomes Data Services 23 College Hill London EC4R 2RP Telephone: 020 7429 6800 Facsimile: 020 7393 8081 E-mail: [email protected] Website: www.incomesdata.co.uk

An examination of teachers’ pay - updated

A report for the National Union of Teachers by Incomes Data Services

January 2009

This report was prepared by Incomes Data Services (IDS) on behalf of the NUT. It was researched and written by: Nicola Allison Jessica Evans Incomes Data Services 23 College Hill London EC4R 2RP Telephone: 020 7429 6800 Facsimile: 020 7393 8081 E-mail: [email protected] Website: www.incomesdata.co.uk Copyright © Incomes Data Services 2009

Contents

1. Key findings 1

2. Pay and progression in teaching compared with other graduate professions 2

3. Comparing teachers’ pay with other occupations by age 10

4. Pay benchmarking 13

Appendix A – Respondents to the IDS graduates’ pay survey 2009 18

Appendix B – IDS job levels 20

IDS – An examination of teachers’ pay – updated, January 2009

1

1. Key findings

• This report updates previous work by IDS for the NUT, delivered in August 2008, which

looked at teachers’ pay in comparison to 2007 IDS graduates pay data, and assessed

pay and progression for teachers under the current pay structure. It uses new data on

graduates salaries, including salary data for graduates after 10 years, collected for the

first time.

• Pay data from the latest IDS research on graduates has been used to see how much

teachers would be paid if they progressed at the same rates as graduate recruits in

other sectors. A band D teacher at the top of the pay scale, ie after five years, received

£30,148 (M6). This would be 7 per cent higher, at £32,219, if the IDS median, giving

typical graduate progression over the first five years of a career, had been applied. The

equivalent figure for average graduate progression would be £35,313, some 17 per cent

higher than the M6 figure.

• After 10 years, a band D teacher at the top of the upper pay scales (U3) receives

£35,121. This would be 13 per cent higher, at £39,604, if the IDS median, giving typical

graduate progression over the first 10 years of a career, had been applied. The

equivalent figure for average graduate progression would be £41,832, some 28 per cent

higher than the U3 salary.

• Analysis of ASHE data for different age groups shows how teachers’ earnings fall

behind those in other professions. At age 20-29, median earnings for primary teachers

are above science professionals, 8 per cent below engineering professionals, and 16

per cent below health professionals. By age 40-49, median earnings for science

professionals are 12 per cent above those for primary teachers, while engineering

professionals are 14 per cent above and health professionals are 36 per cent above.

• IDS has applied its standard pay benchmarking methodology to teachers’ salaries at

three different levels. This analysis indicates that new teachers’ salaries are at 83 per

cent of market median pay for jobs at a similar level. Mid-career teachers are at 88 per

cent of market pay, and senior teachers (at the top of the pay scale) are at 73 per cent

of market pay for similar jobs. New teachers and senior teachers’ salaries were also

below the market lower quartile for jobs at a similar level.


2

2. Pay and progression in teaching compared with other graduate professions

Pay and Progression for Graduates is an annual publication by the IDS Executive

Compensation Review which provides information and analysis on the state of the graduate

labour market. One part of the report looks at how successful employers have been in holding

on to their graduates recruited in past years and tracks how much their salaries have

progressed since starting work with them.

For the 2009 publication, employers were asked to provide details of the current salaries paid

to graduates they took on five and 10 years ago, groups that we term five-yearlings and 10-

yearlings. In the most recent dataset (to be published in February 2009), five-yearlings are

those taken on in 2003 and 10-yearlings are those taken on in 1998. To calculate the salary

progression of graduates over the two periods, the five-and 10-yearlings current salaries, as

supplied by the employer, are subtracted from the latest graduate recruitment rate in the same

organisation. The difference between the two, expressed as a percentage, is a ‘salary lead’.

These salary-leads have then been compared against the teacher’s pay spine as at 1

September 2008. The five-yearlings increases are compared to the equivalent increases in

salaries of graduates entering the teaching profession on main pay scale M1 and moving up to

the top of the main scale pay band M6 after five years. The 10-yearlings increases are

compared to the equivalent increases in salaries of teachers who reach the top of the upper

pay scale, U3.

Graduate starting salaries by sector (Source: IDS, Pay and Progression for Graduates)

Lower quartile £pa

Median £pa

Upper quartile £pa

Average £pa

Finance 23,500 25,000 28,000 26,232

Law & accountancy 24,000 29,400 37,000 29,674

Manufacturing 23,125 25,000 28,500 25,675

Service 22,750 24,000 26,500 24,947

Public/not-for-profit 22,434 24,045 25,390 23,835

All 23,000 25,000 28,000 25,984


3

Graduate progression after five years

In order to provide the clearest indication of how teachers’ salaries after five years compare to

salaries in other professions we calculate the median and average increases across 117

organisations.

Using these figures, the M1 salary points were multiplied by the median and average salary

leads to show where the M6 salary points would stand if they had increased over the five years

by the IDS figures. To provide a further comparison this same process was applied to looking at

the salary differences by four broad sectors of manufacturing, service, finance and public/not-

for-profit.

All sector median salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768

If IDS median salary lead 32,219 33,769 37,488 39,050

Band D National Band C Fringe Band B Outer London

Band A Inner London

The overall findings show that teachers at grade M6 are lagging behind in salary progression at

both the median and average than what they would have been if an IDS all-sector median or

average had been applied to the pay scale. At Band A, for example, a teacher at the top of the

pay band after five years would earn a salary of £34,768, which is 12 per cent below the

£39,050 salary had the IDS all-sector median been used. This pay differential widens to 23 per

cent when comparing the average figures.


4

All sector average salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768

If IDS average salary lead 35,313 37,012 41,088 42,800


Band A Inner London

Five-yearlings pay progression by sector Looking at the sectoral pattern it can be seen that when increasing the M6 pay scale by the

finance salary-lead median it produces the highest salary in comparison to the other sectors.

For example, taking teachers at band B the M6 salary point is £33,554, but when using the IDS

finance sector salary-lead the figure increases to £43,104 (a 28 per cent pay differential). The

public/not-for-profit sector median has the smallest lead over teachers, but it is still positive, at

£35,784 (7 per cent) in band B.

Finance sector median salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London


5

Finance sector average salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London

Public sector median salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London

When using average salary-leads, the service sector has the largest salary difference with

teachers, at £45,600 (31 per cent) in band A, but is closely followed by the finance sector, at

£45,450 (also 31 per cent). The manufacturing sector has the third-greatest difference at

£38,725 (11 per cent) in band A, with the public sector having the smallest, at £37,500 (8 per

cent). Overall, at the average, if teachers pay had increased in line with the increases in the

service sector by point M6 on the teachers’ pay scale the salary would range from £37,624 to

£45,600 depending on location, while the equivalent range using the finance salary-lead would

be £37,500 to £45,450.


6

Public sector average salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London

Service sector median salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London


7

Service sector average salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London

Manufacturing sector median salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London


8

Manufacturing sector average salary differences (M6/five years), 2008

0

10,000

20,000

30,000

40,000

50,000

Annual salary £pa

Teacher on M6 30,148 31,138 33,554 34,768



Band A Inner London

Graduate progression after 10 years It is less common for organisations to retain graduates for a 10-year period as within this time

often the employee has tended to move on to another organisation. However, the latest IDS

graduates report charts data provided by 13 employers who still had graduates with them after

10 years, and using the same methodology as with the five-yearlings, these salary-leads can

be compared with the top of the upper pay scale, U3. The findings show that after 10 years the

salary-leads of graduates at the median are nearly double their starting salary in 1998, and at

the average the figure is over double.

All sector median salary differences (U3/10 years), 2008

0

10,000

20,000

30,000

40,000

50,000

60,000

Annual salary £pa

Teacher on U3 35,121 36,114 38,634 42,419



Band A Inner London


9

The analysis shows that for teachers on U3, salaries after 10 years are below what they could

have been if the IDS median and average salary-leads had been used. On the scale point U3

the pay ranges from £35,121 to £42,419, but if using the IDS median salary-lead the range is

13 per cent higher, from £39,604 to £48,000. At the average the potential salary if using the

IDS average all-sector lead is much greater with a range from £41,832 to £50,700 depending

on location, a 19 per cent differential.

All sector average salary differences (U3/10 years), 2008

0

10,000

20,000

30,000

40,000

50,000

60,000

Annual salary £pa

Teacher on U3 35,121 36,114 38,634 42,419



Band A Inner London


10

3. Comparing teachers’ pay with other occupations by age

This chapter looks at how teachers’ earnings in relation to other occupations change with age.

This is done by analysing ASHE data broken down by occupational and age to see the

earnings pattern over lifetimes.

Taking the most recent data available, for 2008, teachers’ median salaries over three age

bands, 20-29; 30-39 and 40-49, are compared with the median annual earnings of science,

engineering and health professionals.

Comparison with science professionals median salaries in 2008

0

10,000

20,000

30,000

40,000

20-29 30-39 40-49Age

£pa

Primary & nursery teachersSecondary education teachersScience professionals

The first chart shows that at age 20-29 science professionals’ median earnings1 are 6 per cent

below those for primary and secondary teachers. By age 30-39, median earnings for science

professionals have caught up, so that they are 4 per cent ahead of primary teachers, and 1 per

cent behind secondary teachers. By age 40-49, science professionals’ median earnings have

moved ahead of school teachers, with a gap of 3 per cent over secondary teachers and 12 per

cent over primary teachers.

1 The median of the median salaries for chemists, biological scientists and physicists.


11

Comparison with engineering professionals median salaries in 2008

0

10,000

20,000

30,000

40,000

20-29 30-39 40-49Age

£paPrimary & nursery teachersSecondary education teachersEngineering professionals

When looking at the median earnings of civil, mechanical and electrical engineers against

primary and nursery and secondary education teachers the engineering professionals are 8 per

cent above both teaching groups at age 20-29. By age 30-39, the differential has grown to 14

per cent above secondary teachers and 10 per cent above primary teachers.

Comparison with health professionals in 2008

0

10,000

20,000

30,000

40,000

50,000

20-29 30-39 40-49Age

£pa Primary & nursery teachersSecondary education teachersHealth professionals

A final comparison with health professionals, which includes medical practitioners,

psychologists and pharmacists, shows the biggest differential between this group’s median

salaries and both areas of teaching. Across all three age bands health professionals’ salaries

are consistently above those within teaching. The differential is 16 per cent above both


12

teaching groups for age 20-29, but has increased to 24 per cent above secondary teachers and

36 per cent above primary teachers by age group 40-49.

Salary differences between teachers and other professions

Age band 20-29 % difference



In comparison with secondary education teachers

Science -5.9 -1.5 2.8

Engineering 8.2 14.1 4.3

Health 16.4 14.7 24.2

In comparison with primary & nursery teachers

Science -5.9 3.8 12.2

Engineering 8.2 20.2 13.9

Health 16.4 20.8 35.6

An alternative view of salaries by age can be seen by looking at pay growth within the

professional occupations. The table shows how median salaries have progressed over time by

relating the median salaries for age bands 30-39 and 40-49 by the median salaries for age

band 20-29. The findings show that within age band 30-39 engineering professionals have

seen the greatest growth in salaries by 34.8 per cent, over what their counterparts in age band

20-29 are being paid. Secondary education teachers also saw one of the highest pay growths

on their younger colleagues of 33.5 per cent. Health professionals saw the lowest growth in

earnings over the two age bands of 25.9 per cent. This picture changes when looking at the

pay growth between age bands 20-29 and 40-49, with health professionals seeing an above

double increase of 52.3 per cent. Teaching professionals saw some of the lowest pay growth,

but it was engineering professionals that saw the smallest level of growth.

Pay growth over age band 20-29 in 2008

Age band 30-39 % growth

Age band 40-49 % growth

Primary and nursery teachers 28.5 37.8

Secondary teachers 33.5 45.5

Science professionals 33.8 55.9

Engineering professionals 34.8 37.6

Health professionals 25.9 52.3


13

4. Pay benchmarking

IDS regularly undertakes pay benchmarking exercises, which involve matching jobs to an IDS

job level and then benchmarking against a range of market data for jobs at the same level.

Below we conduct this exercise for newly-qualified teachers, those with five years’ experience,

and senior teachers at the top of the pay scale. While we are not suggesting direct equivalence

between the roles, the data draws a broad comparison between alternative occupations at

similar levels, using available data sources. Usually we would seek to use three sources of

market data. The data is all for employees at a national level; where necessary it has been

updated slightly to be consistent across all data sources.

The newly-qualified teachers have been evaluated at IDS job level 5, mid-career teachers (five

years’ experience) at IDS job level 7 and the senior teachers (10 years’ experience) at IDS job

level 8. More information about IDS job levels is given in appendix B.

1. Newly-qualified teacher

Data source Job match Lower quartile £pa Median £pa Upper

quartile £pa

Engineering survey I Engineering graduate 20,600 24,617 25,750

Engineering survey II Graduate - 27,540 -

Universities Junior lecturer 29,704 32,458 35,469

NHS Physiotherapist/ radiographer/SLT (band 5)

20,225 23,174 26,123

ECR graduates survey New graduate 23,000 25,000 28,000

Market summary 21,800 25,000 27,062


14

2. Mid-career teacher


quartile £pa

Engineering survey I Senior engineer 30,286 34,270 40,170

Engineering survey II Engineer - 34,221 -

Universities Lecturer 36,532 39,920 43,622

NHS Physiotherapist/ radiographer/ SLT advanced (band 7)

29,091 33,722 38,352

ECR graduates survey

Graduate after 5 years 30,000 36,160 45,000

Market summary 30,143 34,270 41,896

3. Senior teacher


quartile £pa

Engineering survey I Engineering manager 35,709 41,000 45,100

Engineering survey II Senior engineer - 50,592 -

Universities Senior lecturer 44,930 48,381 52,086

NHS Physiotherapist/ radiographer/SLT principal (band 8a)

37,106 40,817 44,527

ECR graduates survey

Graduate after 10 years 43,002 47,552 57,695

Market summary 40,054 48,381 44,814


15

Summary of market data

Lower quartile £pa Median £pa Upper quartile

£pa

1. Newly-qualified teacher 21,800 25,000 27,062

2. Mid-career teacher 30,143 34,270 41,896

3. Senior teacher 40,054 48,381 44,814

The table bellows compares the market medians from the range of data sources to teachers’

pay rates at the start (M1), after five years (M6), and at the top of the discretionary pay scales

(U3). Typically a salary within 10 per cent is considered to be in line with the market. In all

cases, teachers pay is below the market. The differential is greatest for the teachers at the top

of the pay scale, where the salary is at 74 per cent of equivalent market jobs.

Market medians compared to teachers’ pay rates

Teachers’ pay rate (band D) Median £pa

Teachers’ pay compared to the market median

1. Newly-qualified teacher 20,627 25,000 83%

2. Mid-career teacher 30,148 34,270 88%

3. Senior teacher 35,121 48,381 73%


16

Market medians compared to teachers’ pay rates

0

10,000

20,000

30,000

40,000

50,000

1. Newly-qualifiedteacher

2. Mid-career teacher 3. Senior teacher

Teachers's payMarket median

£pa

Pay for newly-qualified teachers is below the lower quartile for comparable jobs, pay for mid-

career teachers is at the market lower quartile, and pay for senior teachers is at just 88 per cent

of the market lower quartile.

Market lower quartiles compared to teachers’ pay rates

Teachers’ pay rate (band D)

Lower quartile £pa

Teachers’ pay compared to the market lower quartile

1. Newly-qualified teacher 20,627 21,800 93%

2. Mid-career teacher 30,148 30,143 100%

3. Senior teacher 35,121 40,054 88%


17

Market lower quartiles compared to teachers’ pay rates

0

10,000

20,000

30,000

40,000

50,000

60,000

1. Newly-qualifiedteacher

2. Mid-career teacher 3. Senior teacher

Teachers' payMarket lower quartile

£pa


18

Appendix A – Respondents to the IDS graduates’ pay survey

AC Nielsen Bases Government Communications Headquarters Aegis Media Hazlewoods LLP Aker Kvaerner Herbert Smith Aker Kvaerner Hewitt Associates Allen & Overy LLP HM Prison Service Alliance & Leicester HM Treasury Alvis Vickers Hoyer UK Ltd Anglian Water Services Ltd IFS UK Aon UK IG Group Holdings plc Army IG Index Asda Ilmor Engineering Associated British Ports Ince & Co ATIS REAL Weatheralls Interfleet Technology Baillie Gifford & Co IPOS UK Bank of England Jaguar and Landrover Bechtel John Wood Group Plc BG Group Kendall Freeman Bidwells Kerry Group Plc Blick Rothenberg Laing O'Rourke Brebner Allen & Trapp Lambert Smith Hampton British Standards Institute Lloyds TSB Burges Salmon Makro S.S.W Buro Happold Marsh Caterpillar (Northern Ireland) Masterfoods Clyde & Co Merck Sharp & Dohme CMS Cameron McKenna Nabarro Nathanson Corus Nationwide Building Society Countryside Properties Next Retail Croda NHS Graduate Scheme Cummins Nissan Motor UK Demag Delaval Turbomachinery NOP World Department for Transport Nortel Devathlon UK Norther Ireland Civil Service DHL NRG Management Limited Dixon Wilson Organon Research Scotland DLA Piper Pearl Group Services LTD Domestic and General Price & Myers LLP EDF Energy Reeves and Neylan Edwards Geldard Rehau ExxonMobil Rentokil Initial Field Fisher Waterhouse Ricardo UK Financial Services Authority Royal and Sun Alliance Fitzpatrick Contractors RSM Robson Rhodes FKI Plc RWE nPower Flight Centre Saffery Champness Freshfields Bruckhaus Deringer Samworth Brothers Gallaher Ltd Servier Laboratories Geo. Adams & Sons Ltd Servier Laboratories GFK NOP Ltd Severn Trent GlaxoSmithKline Siemens Industrial Turbomachinery


19

Softcat Ltd Watson Wyatt Standard Life Willis Group Services Symonds Group Wincanton Thomas May & Co Woolworths Group Total E&P UK Plc Wragge & Co LLP TRL Writing Machine United Utilities Xerox Vaisala Yorkshire Building Society Vehicle and Operator Services Agency


20

Appendix B – IDS job levels

CAPSULE JOB LEVELS MATRIX Category Level Description Administrative, manual and support

1 Work requires basic literacy and numeracy skills and the ability to perform a few straightforward and short-term tasks to instructions under immediate supervision. Previous experience is not necessary

2 Work requires developed literacy and numeracy skills and the ability to perform some routine tasks within procedures that may include keyboard and practical skills and initial contact with customers. Some previous experience is required

Secretarial/Craft

3 Work requires specific administrative, practical, craft or technical skills gained by previous experience and qualifications to carry out a range of less routine work and to provide specialist support, and could include closer contact with the public/customers

4 Work requires broad and deep administrative, technical or craft skills and experience to carry out a wider range of activities including staff supervision, undertaking specialist routines and procedures and providing some advice

Vocational/Supervisory

5 Work requires detailed experience and possibly some level of vocational qualification to be able to oversee the operation of an important procedure or to provide specialist advice and services, involving applied knowledge of internal systems and procedures

6 Work requires a vocational qualification and sufficient relevant specialist experience to be able to manage a section or operate with self-contained expertise in a specialist discipline or activity

Professional/Managerial

7 Work is concerned with the provision of professional services and requires an experienced and qualified professional to provide expertise and advice and operate independently. Would also include operational managers responsible for service delivery

8 Work requires deeper professional experience and qualifications in a specific discipline to be able to carry out a range of specialist technical or scientific activities, which may include the management of a team or services. May also include specialist management roles responsible for delivery of a major service

Senior management

9 Senior managerial roles involved in managing an important activity or providing authoritative expertise, also contributing to the organisation as a whole through significant experience

Director

10 Member of a company board or an executive/senior management team in public sector organisations, with overall functional responsibility and input to the strategy of the wider organisation, through deep and broad experience

Chief Executive

11 The most senior posts in an organisation responsible for setting the overall direction, strategy, financial success, and performance achievement requiring substantial business pre-eminence

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