In a Nutshell

• Michigan has grappled with high rates of teacher turnover over for years; nearly one of every five teaching positions must be filled each year.
• Teacher retention strategies, including financial incentives, can be effective in reducing the turnover and addressing reported teacher shortages.
• The FY2021 School Aid Fund budget includes a new teacher retention program to reduce the exodus of new teachers from the profession.

After weeks of behind-the-scenes negotiations with Governor Whitmer’s administration, on Wednesday the Michigan Legislature approved a state budget for the upcoming 2020-21 fiscal year (FY2021) that begins October 1. In an otherwise flat budget, one of the few increases in the K-12 spending plan takes aim at a long-standing challenge that has plagued school districts across the state – teacher attrition. A new $5 million School Aid Fund appropriation will provide stipends to incentivize teachers to continue working in their current district. If effective, this new teacher retention program will help bring down Michigan’s higher-than-average teacher attrition rate and better ensure that all classrooms are led by a certified teacher.

In 2019, the Research Council did a deep dive into the state’s teacher pipeline to examine whether a teacher shortage existed or if one appeared on the horizon. In our discussion of teacher demand forces affecting the K-12 labor market, we identified teacher attrition and mobility as key drivers of Michigan’s high teacher turnover rate. One promising strategy we identified to lower the state’s turnover rate is for local districts and the state to provide teacher retention incentives. 

We are pleased to see state policymakers direct their attention and funding towards this teacher labor market challenge.

Michigan’s Teacher Turnover Challenges

Each school year, parents find out that their child’s teacher is leaving for a job at another school or exiting the profession. During the pandemic, teacher attrition and mobility are even greater concerns for families and district officials as older teachers and those with underlying health risks must contemplate their safety and that of those they live with in deciding whether to return to the classroom.

Nationally, about 16 percent of public school teaching positions must be filled each year because of job changes or career exits. In Michigan, the turnover rate (combination of both teacher exits and moves) from the 2017-18 to the 2018-19 school year was 20 percent. This means that, on average, districts in the state have to replace one of five teachers each year.

Michigan’s higher-than-average rate is not a recent phenomenon. The state rate has been consistently above the overall U.S. rate since the mid-2000s. Further, while the national turnover rate has remained fairly stable over this period, Michigan’s has been growing. In 2005, it was equivalent to the national rate. 

Not surprisingly, teacher turnover rates vary considerably across Michigan’s 800-plus traditional public and charter school districts, as well as geographically and by district locale. Previous research showed that urban districts had the highest teacher turnover (24 percent), followed by rural schools (16 percent) and then suburban schools (15 percent). Districts in and around Detroit and those with high concentrations of poor students have the highest rates. 

As a growing number of districts report teacher shortages, research has shown that teacher turnover is a key demand-side factor and a driver in creating vacancies. 

High turnover rates are costly for schools and students. While some turnover is expected and can be beneficial, increased rates require districts to spend funds recruiting, on-boarding, and training new staff more frequently. These expenses have to be covered from funds that would otherwise go towards classroom instruction or other school services. Estimates of these costs range from $4,000 to $18,000 per teaching position needing to be filled. For difficult-to-staff urban districts, filling a single vacant teacher position can approach $20,000. 

Apart from the financial costs, research has shown higher turnover rates have deleterious effects on academic performance for students. The problems are compounded when high rates of turnover occur in hard-to-staff schools as the personnel churn creates a steady flow of inexperienced teachers in classrooms, along with overall school instability, where students are already struggling to succeed academically.

To date, the State of Michigan has not adopted a specific policy intervention to deal with the challenges arising from high teacher attrition. Instead, districts have had to deal with the problem themselves. However, this is about to change. The Governor and state lawmakers agreed to commit state resources in the upcoming budget to help districts lower teacher turnover and increase stability in their educator workforce.

New Teacher Retention Bonus

Michigan’s long-standing teacher retention challenge is finally on state policymakers’ agenda. 

The FY2021 School Aid Fund budget includes a $5 million appropriation to supply eligible districts with state matching funds to provide stipends to brand new teachers that complete a full year of classroom instruction. Districts will have to apply to the state for these stipend funds and agree to match the state funding with a minimum of $500 per teacher. The state will provide $1,000 per teacher for those working in high-poverty districts and $500 per teacher for educators in all other districts. The added incentive for teachers working in poorer districts acknowledges the fact that these positions are often the most difficult to fill and, when they are filled, teachers are much more likely to leave than in wealthier districts.

Annual stipends of $1,500 or $1,000 per teacher per year would continue to be paid through a teacher’s third year in the classroom with the same district. Making funding available for three years is important because of the higher attrition rate among educators just starting out in the profession. Michigan’s newly adopted teacher retention policy resembles similar programs adopted in Texas and Arizona. 

Michigan’s teacher turnover rate is high and likely a key contributor of reported teacher shortages in many schools. Curbing turnover reduces the costly and often disruptive process of having to fill classroom vacancies. At the same time, reducing the annual classroom churn eases the pressures on the teacher pipeline that are associated with a shrinking supply of teaching candidates coming out of the state’s teacher preparation programs. In this sense, the state’s new teacher stipend funding can serve as a “twofer” in that it addresses both sides of the teacher labor market.