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Guide for school and district leaders: Better practices in staffing when budgets are cut

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School leaders are no strangers to fiscal cuts.

With personnel costs, including salary and benefits, typically consuming up to 80% of a school’s annual operating budget, leaders are frequently confronted with difficult choices regarding staff restructuring and layoffs when budgetary constraints arise — including from the end of federal pandemic funding, enrollment declines because of changing demographics, and the expansion of school choice.

Acknowledging the extensive efforts undertaken by districts to attract and retain a pipeline of effective and diverse educators, school leaders must proactively reassess layoff policies, learning from past mistakes, to safeguard against undermining these efforts. After all, one of the few indisputable facts in education remains the indispensable role teachers play in facilitating student learning and development.

Education research underscores five critical lessons to be learned from the Great Recession, particularly focusing on decisions that adversely affected schools and their students.

Lessons learned thus far in the turbulent P-12 school funding landscape of the 21st century underscore a set of better practices that district and school leaders can employ to frame and guide budget decisions:

  • Explore alternatives to layoffs.
  • Identify options for reducing staff needs.
  • Prioritize school-based rather than districtwide adjustments.
  • Develop a holistic layoff policy that retains the most effective teachers.
  • Engage in early and transparent communication to foster school climate and culture.

Explore alternatives to layoffs

School, district, and state leaders must thoroughly investigate alternatives to layoffs before letting educators go.

These alternatives include strategies such as:

  • Instituting hiring freezes, wage freezes, salary reductions, and temporary salary reductions.
  • Offering early-retirement incentives.
  • Implementing furloughs.
  • Scaling back at-will positions.
  • Allowing non-essential contracts to expire.
  • Postponing maintenance.

Identify options for reducing staff needs

Before resorting to position cuts, leaders need to identify and explore temporary options to trim staff requirements or cut costs, such as:

  • Increasing class size.
  • Combining job responsibilities.
  • Modifying instructional arrangements.
  • Consolidating departments.
  • Reducing contracting services.
  • Eliminating professional development days.

Prioritize school-based adjustments

School systems must prioritize school-based adjustments rather than sweeping district-wide cuts, as the latter disproportionately affects schools with larger populations of students from traditionally marginalized backgrounds.

For example, a comprehensive case study examining the response of the Los Angeles Unified School District to layoffs induced by the recession, conducted by Knight and Strunk (2016), revealed a glaring inequality in the distribution of layoff notices across the district, disproportionately affecting students of color, bilingual students, and those from low-income households.1

This not only affects the school culture and climate but also causes teacher “churn” within schools,2 which has been shown to negatively affect student learning.

Develop a holistic layoff policy that retains the most effective teachers

School systems should refrain from relying on seniority-based policies and work to develop policies that consider multiple dimensions, such as performance, licensure status, and school leader assessments of educators and the needs of the school and its students.

A recent review of layoff policies across 148 of the largest districts in the United States reveals that nearly a third of these districts prioritize seniority as the primary criterion for making layoffs, two-thirds of which use seniority as the only criterion.3

This method, known as “Last in, First out,” or LIFO strategies, eliminates the most recently hired teachers, irrespective of performance or diversity considerations. While this approach may seem fair, as shown by Knight and Strunk (2016), it inadvertently worsens persistent opportunity gaps for students of color and those from low-income backgrounds because these students are more likely to attend schools that novice teachers and teachers of color disproportionately staff.

Seniority-based layoff policies devoid of considerations for teacher quality can lead to the loss of highly effective teachers and a higher overall number of teachers being laid off. Take, for example, the findings of a study examining the implementation of Charlotte-Mecklenburg Schools’ discretionary layoff policy, prioritizing performance and licensure over tenure and granting principals the final decision-making authority.

Kraft (2015) found that this approach resulted in fewer teacher layoffs coming out of the Great Recession, with a less detrimental impact on student achievement than seniority-based cuts.4 Such methods do a better job of retaining top-tier teachers, as few teachers identified for layoff under district-wide seniority-based policies would face termination under a performance-based system. Goldhaber and Theobald (2015) reach a similar conclusion in their study of reduction-in-force notifications in Washington State.5

Retaining the most effective teachers directly impacts students, and districts transitioning from seniority-based layoff policies to ones incorporating multiple performance criteria for determining layoffs witness improved student achievement, embodying a more equitable, effective, and student-centered approach.

Engage in early and transparent communication to foster school climate and culture

It is important to recognize that layoffs have a detrimental impact on the climate and culture of schools. District officials and principals need to establish a clear and transparent communication strategy regarding the scope and process of potential layoffs, being careful to avoid jargon, remain student-centered, and solicit regular feedback from staff and parents.

This involves holding regular meetings with key stakeholders, including parent groups, especially when considering different options the school system may be considering. By fostering open dialogue and inclusivity, schools can navigate difficult decisions with greater understanding and support from the community, helping to mitigate some of the adverse effects on the climate of a school and fostering a sense of unity during challenging times.

Read more

Gordan and colleagues (2020) provide a comprehensive, easily accessible breakdown of considerations for reducing budgets following the pandemic. Gordon, N., Loeb, S., Rosa, M. & Taylor, E. (2020, July) Reducing district budgets responsibly. EdResearch for Recovery Project.

Kraft and Bleiberg (2022) provide a comprehensive research brief on the effects of teacher layoffs. See Kraft, M.A. & Bleiberg, J.F. (2022). The inequitable effects of teacher layoffs: What we know and can doEducation Finance and Policy 2022; 17 (2): 367–377.

The Education Trust provides a comprehensive set of recommendations for state and district leaders to avoid inequitable teacher layoffs. See Ed Trust (2021). Lessons Learned: Avoiding Inequitable Teacher Layoffs.

  1. Knight, D.S. and Strunk, K.O. (2016). Who Bears the Costs of District Funding Cuts? Reducing Inequality in the Distribution of Teacher Layoffs. Educational Researcher, 45(7), 395-406. ↩︎
  2. Ronfeldt, M., Loeb, S., and Wycoff, J. (2013). How Teacher Turnover Harms Student Achievement. American Educational Research Journal, 50(1), 4-36. ↩︎
  3. Saenz-Armstrong, P. (2023, February 9). Teacher layoffs may be coming. How do districts decide who to let go? National Council on Teacher Quality. The NCTQ database on collective bargaining agreements reports that layoff and reduction in force is a mandatory subject of bargaining in 10 states and a permissible bargaining subject in another seven. ↩︎
  4. Kraft, M.A. (2015).Teacher layoffs, teacher quality, and student achievement: Evidence from a discretionary layoff policy. Education Finance and Policy 10(4): 467-507. ↩︎
  5. Goldhaber, D. &, and Theobald, R. (2013). Managing the teacher workforce in austere times: The determinants and implications of teacher layoffs. Education Finance and Policy 8(4): 494-527 ↩︎
Matthew Springer

Dr. Matthew Springer is a co-founder and Managing Partner at Basis Policy Research.