Unlocking Success: 5 Must-know tips for school district CFOs eyeing substitute teacher outsourcing.

Chief Financial Officers (CFO) for K-12 school districts share a common challenge: finding innovative approaches to trim expenses and maintain balanced budgets to serve their students best interests. It's been particularly difficult lately with inflation, disparities in education funding, the uncertainty of local tax ballot proposals, a loss of ESSER funds, and ongoing teacher shortages. Bound by fixed dollars tied to government funding, public school CFOs have little wiggle room when it comes to the salary and benefits line items that eat up 80% of their entire budget. 

Substitute educator outsourcing considerations. 

By choosing a partner to recruit, hire, manage, and retain substitute teachers or other part time staff, school districts can alleviate both hard and soft costs. For more than 25 years, Kelly Education has worked with hundreds of districts nationwide to solve the challenges of operating their substitute teacher programs. In talking with CFOs, we’ve compiled information into five areas that every CFO should consider when reviewing the benefits of outsourcing of substitute teachers: 

1. Impact of cost effectiveness through savings and avoidance.

One of the major advantages of outsourcing is its potential to generate substantial cost savings through streamlining the human resources functions. Most districts‘ demand is high for substitute talent for various reasons such as; substitute retention in today's competitive labor market, teacher attrition, and covering long-term absences for full time faculty on leave. It takes dedicated resources to constantly replenish the substitute pool with qualified, reliable workers as it fluctuates.   

For example, when Kelly Education became the employer-of-record, we provided Affordable Care Act (ACA) coverage for qualified substitute teachers at one Florida school district, and the district avoided as much as $345,000 in related ACA costs. Further, by implementing a centralized absence management technology, that district not only increased fill rates, it also reduced wage/hour compliance risk for those staffers calling substitute teachers during off hours. This case study shows how when recruiting, hiring, managing, and retaining is transferred, so are the costs. 

2. Reduction of administrative burdens that lead to burnout.  

Most districts tell us that they simply can’t handle the volume of work associated with demand of keeping a healthy substitute teacher pool. It drains the resources of the HR team causing burnout and potential employee turnover, which drives up the cost of the workforce. 

By hiring an education staffing partner, the responsibility of managing substitute employee scheduling, processing payroll, and administering benefits like health insurance and retirement plans is shouldered by the company. As a result, the in-house human resources team can dedicate its’ time and energy exclusively to full-time faculty and staff. As a bonus, when the substitute pool is healthy, there’s a reduction of burnout amongst faculty and administrators who are pulling double duty covering classrooms.  

A partner CHRO in Georgia told us that she and her district CFO have had the same talk for the past ten years:  “Is this something we could take back in house and save money? Well… it would fall to me and my assistant to recruit, train, and vet all those substitute teachers again that we rely on Kelly to do for us... and I just don't personally have any more time to spare to do that.” 

3. Transfer of compliance risk. 

The intricacies of state and federal regulations can pose significant risks when districts are not compliant. Outsourcing can help reduce this risk, thereby minimizing the possibilities of penalties and litigation. A staffing company manages wage and tax compliance, workers' compensation claims, unemployment, and potential lawsuits against substitute teachers. 

4. Inclusion of all services—without hidden fees.  

Not all education staffing companies are alike. Districts should never be surprised by hidden charges. We recommend that CFOs ask questions about what’s included and get it in writing. Here are some, but not all, questions to consider when uncovering hidden fees.

• Does the district get a choice of absence management technology?
• Is there a mix of targeted digital advertising and grassroots recruiting?
• Does the vendor care about its employees by providing training and quality professional development specifically for substitute educator roles?
• What about access to perks and benefits for substitute teachers to drive retention?  
• How robust is their effort in background screenings and verification of credentialing?

5. Value of data-driven partnership.  

Top education staffing companies don't offer cookie cutter solutions. Instead, their teams work closely with the district CFO to understand the costs of its current substitute program. As a CFO, you want a trusted partner who provides transparent, data-driven insights that shows how the cost of paying for all the HR functions is minimized and that the substitute pool is both well-trained and happily engaged. Once the contract is signed, CFOs should expect real-time, up to date analytics that holds accountable delivery of the promised value propositions. This ongoing partnership results in informed, collaborative decisions and adjustments to the plan based on concrete data.

Get a free absence analysis.

Kelly Education understands the unique needs of CFOs because we’re led by education insiders, including many former school administrators. Our experts don’t work for a private equity firm looking to win on the margins. Our goal is to help you to maximize spending in providing quality education for students... especially when their teachers are absent. We believe that you should be so delighted with the partnership that you'd also consider letting us create value with our paraprofessionals, tutors, nurses, custodians, or other non-instructional roles. 

If your district is considering outsourcing some aspects — or all — of its substitute teacher program, these five facets equip CFOs to understand the financial benefits of partnering with a trusted staffing provider. We invite you to reach out for a consultation where we can conduct a free absence analysis for your district.  

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About the author:  Heather Bills is the Chief Financial Officer for Kelly Education. With 25 years of experience in corporate finance, she understands how to create value with a data-driven, win-win approach. She brought her passion to the staffing sector in 2018 where she now leverages her skills to strategically improve the quality of education for K-12 school districts across the country.