Special Report
Recruitment & Retention

Contractors Are Filling Staffing Gaps in Schools. Know the Benefits and the Drawbacks

By Mark Lieberman — June 29, 2022 7 min read
Conceptual illustration of district substitute being directed to a school in need
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The 60 schools in Florida’s Osceola district are short a total of 140 permanent teachers. That number goes up considerably when staff absences surge during COVID outbreaks, as they did several times last school year.

Next year, the district is set to bring in 140 new teachers to fill those gaps—but it won’t be employing them directly. Instead, it’s hired a private staffing firm to bring teachers from Latin America for three- to five-year stints.

This approach may cost the district a little more, and the new teachers won’t be familiar with the school’s community and culture. But for Osceola’s administrators, it’s far preferable to the alternative: a long-vacant position, which the district calls “lapse.”

“The staffing agency is not a permanent model. This is not outsourcing,” said Julius Melendez, the Osceola school board member who helped develop the contract staffing plan. “We want to run it ourselves, but we can’t hire enough people fast enough.”

Osceola, with roughly 68,000 students, is among thousands of school districts that tap private staffing companies to fill positions they can’t, or won’t, hire in-house. These companies provide crucial relief for districts in a pinch, particularly for specialized workers like nurses, speech-language pathologists, and special education paraprofessionals. They’re increasingly common sources for substitute labor, and even for permanent teaching positions.

These companies can relieve school districts of the burden of recruiting and managing local specialized workers who are few and far between, or easily lured by more-lucrative positions in other industries. Some firms beam in teachers and other staffers virtually. Others tap into international sources. Some even recruit workers right out of teacher education programs.

But these models are not without their drawbacks. Companies sometimes charge districts a hefty sum for their services. Workers who come to schools through a staffing agency sometimes lack access to the same benefits as the district’s unionized workforce. Short-term fill-ins lack the institutional knowledge that comes with working in the same school community for a long time, and might not feel as motivated to embed in the community if they know they’ll soon leave.

Critics of privatization in public schools worry that the prominence of staffing firms as a temporary solution to hiring woes represents a deeper problem with the place schools occupy in the labor market: The education profession is not as appealing for job candidates as it once was.

“It’s frankly an act of desperation. You don’t need contracting firms if your demand is being satisfied. But the demand’s not being satisfied,” said Samuel Abrams, director of the National Center for the Study of Privatization in Education at Teachers College, Columbia University. “And that’s a sad commentary on the state of education in the United States.”

School district staffing is a growing industry

Federal, state, and local spending on K-12 schools in the United States currently totals roughly $800 billion.

By comparison, the education staffing industry generated $1.2 billion of revenue in 2021, according to the tracking firm Staffing Industry Analysts. That number is double the figure from 2012, when the firm first started tracking the education staffing agency. Analysts expect the industry’s annual revenue to grow to $1.4 billion next year.

That doesn’t count all the money districts spend on contractors for bus drivers, nurses, and other non-instructional contracted positions.

K-12 education represents a tiny slice of the broader private staffing industry nationwide. The industry has its roots in the post-World War II era, when firms needed help filling clerical positions in offices as well as blue-collar jobs. In recent decades, the industry has shifted to covering professional occupations like IT, health care, and education.

Data on the number of contract employees in schools nationwide are hard to come by. Substitute teaching has been the main area of growth for K-12 education staffing in recent years, said Timothy Landhuis, director of research for Staffing Industry Analysts. Three main firms dominate the landscape, sucking up two-thirds of the sector’s revenue: Kelly Services, Education Solutions Services, and Substitute Teacher Service.

These firms appeal to workers by offering networking opportunities and more flexibility around job opportunities than a single district can offer on its own, said Landhuis. They appeal to school districts by offering to take the challenging task of recruiting off their hands.

The Republic school district in Missouri has been contracting since 2015 with the private temp agency Penmac for substitute positions. Penmac helps the district find workers to fill positions, relieving the burden on building secretaries to help with daily coverage.

The 1,500-student Republic district participates in a substitute pool with several nearby districts. Each one sets its own pay rate, and then Penmac takes a cut of that pay rate for itself.

Early on, the firm was mainly useful for supplying teachers and classroom aides. More recently, the district has tapped into Penmac’s pool for replacement custodians, food service workers, and secretaries.

“They’re very engaged with what’s happening with the workforce,” said Tyler Overstreet, the district’s assistant superintendent. “That allows us to target specific strategies to hopefully recruit and get more people in our sub pool when we don’t have someone full-time hired.”

The district also collaborates with the other districts in the area that use Penmac to strategize expanding the pool of candidates for substitute positions.

Districts weigh the pros and cons of staffing contractors

Some school districts are more wary of private firms’ role in addressing their staff woes.

Katie Ahern, director of student support services for four school districts in Windsor, Vt., has tapped into staffing firms to provide special education services that are otherwise hard to come by in her rural community.

“Ten years ago, you might have had to use an agency for one position,” she said. “I have five [contracted positions] now, in not a very big district.”

But she’s grown increasingly frustrated with marketing emails from companies pitching districts on contracting out teaching services.

Some agencies have proposed charging districts $70 to $125 an hour for the workers they offer. That amounts to between $110,000 and $150,000 a year. Many workers employed directly by a district in similar positions make less than half that, even with benefits included.

If the contracted worker decides to stay at the district after one year, some companies charge districts a finder’s fee as well.

Sometimes out-of-state applicants from contracting firms don’t understand Vermont’s state-specific regulations around students with disabilities.

But even so, Ahern has found high-quality employees through these firms, too.

Some district administrators think tensions over contractors are misplaced. For instance, some districts balk at higher hourly rates for contracted workers compared with in-house equivalents. But others point out that costs end up coming out even because districts are not paying for contracted workers’ retirement.

Stephanie Betit-Hancock, director of special education for the Windham Central Supervisory Union in Townsend, Vt., said she saves time on administrative tasks when contracting firms take care of logistics around the behavioral specialists and speech-language pathologists they provide to her districts.

On the flip side, contracting doesn’t always work. When she needs a bus to transport a student who requires specialized services outside the district, most bus companies are 50 miles away and take too long to arrive.

Privatizing education services can have other consequences as well. A Pennsylvania school district recently dropped its substitute teaching contractor after the company declined to permit substitute workers from being employed directly by the district. Another Pennsylvania district drew ire from community members after it dropped its bus driver firm in favor of a cheaper, but less local, alternative.

Meanwhile, some staffing firms are wary of getting into education because the bureaucratic processes involved in partnering with school districts. Attending a school board meeting, for example, can be more cumbersome than meeting virtually with a company CEO.

But the staffing firms that do serve schools are becoming more high-tech, using artificial intelligence to streamline the recruitment process, Landhuis said.

Some districts likely wouldn’t use contractors to the extent they currently do if they had more success finding workers and keeping them around.

“We can only control what we can control. Contract staffing may not be for everybody, and it may rub some people the wrong way,” said Melendez, the school board member in Osceola, Fla. “I have a gap that I have to fill, and I thought of a solution. Even if it’s a temporary Band-Aid, it allows us to minimize the damage and move forward.”

Holly Peele, Library Director contributed to this article.

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