How schools can improve financial sustainability through employee benefits

By Jamie Burdess, Principal Consultant 

A practical guide for school leadership 

Independent schools are facing one of the most challenging financial landscapes in decades. As school leaders, you stand at the centre of this pressure, balancing budgets, managing risk, supporting governance and ensuring long term sustainability in an environment defined by rising costs and increased scrutiny. 

While attention often defaults to income generation, estates strategy or fee planning, employee benefits remain one of the most powerful and often overlooked levers for cost efficiency and risk management.  

Why employee benefits matter more than ever for schools 

The recruitment and retention of talented staff is one of the sector’s most significant challenges. For teachers, leaders and operational specialists alike, workload and wellbeing pressures are acute. 

Rather than viewing benefits as a fixed HR cost, forward-thinking schools are reframing them as infrastructure, a dynamic tool for cost control, risk management and strategic workforce planning. 

This guide reframes key sector challenges through the lens of strategic employee benefits, helping leaders unlock savings, reduce financial volatility and strengthen workforce resilience. 

The following areas represent high-impact opportunities for schools seeking to strengthen financial sustainability without compromising staff wellbeing or their educational mission. 

Review employee benefits and pensions to identify savings opportunities 

Employee benefits and pension contributions account for a significant proportion of non-salary expenditure for independent schools. However, many of these arrangements were implemented years ago and have never undergone a rigorous strategic review. Over time, this creates several inefficiencies: 

• Legacy pension structures that no longer reflect workforce demographics or affordability 

• Insurance policies whose scope or pricing has drifted far from market norms and budgets 

• Benefits that are over specified, offering more than is required and delivering minimal additional value 

A structured benefits audit will provide leadership with transparency and actionable insights. Benchmarking policies against current market rates often reveals meaningful savings, achievable without reducing support to staff. 

More importantly, an evidence-based review enables management to present governors with: 

• A clear strategic rationale for any changes 

• Options to optimise return on investment 

• Improved alignment between benefit provisions and the school’s long-term financial plan 

In an environment where every line of expenditure is under scrutiny, this exercise represents one of the most straightforward ways to create budget headroom. 

The most effective benefit reviews do not start with “what else could we add?”, but with: 

• What do we currently spend? 

• Are we achieving the best return on our investment? 

• What outcomes are we trying to influence (absence, wellbeing, retention, recruitment)? 

• How clearly do we articulate our total reward proposition to staff and candidates? 

Reduce absence costs through employee benefits and wellbeing support 

Staff absence remains one of the least understood and most underestimated pressures on a school’s finances. Its impact extends far beyond the cost of cover including: 

• Additional workload placed on colleagues 

• Disruption to pupil learning 

• Increased pastoral pressures 

• Escalation of minor issues into long-term sickness 

Crucially, schools face unpredictability, making budgeting extremely challenging. 

Focusing on absence management transforms this unpredictability into a structured, manageable solution. This proactive approach does more than cover financial risk. It helps reduce risk at source. 

For schools, it shifts absence from an operational headache to a manageable, forecastable element of the budget. 

How Arnold Lodge School reduced employee benefits costs* 

“Having previously managed our benefits directly with our insurer, we engaged Broadstone to conduct a comprehensive review of our benefit provisions. Their analysis was both rigorous and insightful. As a result, we achieved savings of around 50% on our annual costs without compromising the quality or breadth of our existing benefits. 

Broadstone also identified forward-looking enhancements to ensure our package remains ahead of sector benchmarks, strengthening our ability to attract and retain a happy, motivated and high-performing school workforce.” 

Arnold Lodge School 

*This example reflects the experience of one organisation and is not necessarily representative of the results other schools may achieve. Outcomes and savings will depend on individual circumstances. 

Make existing employee benefits budgets work harder 

Increasing NHS waiting times have a direct operational impact on schools. Delayed access to diagnostics, physiotherapy or mental health support often results in prolonged staff absence, particularly during high-demand teaching periods. 

The good news is that many low-cost health solutions can be funded without new budget, simply by reprioritising existing spend: 

• 24/7 virtual GP consultations 

• Counselling and mental health triage 

• Musculoskeletal early intervention programmes 

• Absence management programmes 

• Health screenings 

These services can significantly reduce the time required for staff to return to work. 

They also provide equitable support across teaching and non-teaching staff, strengthening the school’s reputation as a responsible employer. 

For management, this approach enhances operational resilience while demonstrating efficient use of funds. 

Use collective buying power to improve value 

The sector is experiencing an increase in partnerships, mergers and shared service arrangements. 

For schools, this creates a powerful opportunity to leverage collective purchasing, particularly in areas such as insurance, pensions and wellbeing services. 

Effective collaboration can deliver: 

• Lower premiums through aggregated buying power 

• Diversified risk to support usage-related cost increases 

• Standardised benefits across campuses or partner schools 

• Reduced administrative burden through simplified processes 

• Clear, consistent reporting for governors and auditors 

Despite the opportunities, economies of scale remain underexploited in the independent sector. 

As financial pressures intensify, schools that capitalise on shared procurement will be able to protect benefit quality while achieving meaningful savings. 

Align employee benefits across the school workforce 

Support staff are essential to school operations, yet their benefits often differ sharply from those offered to teaching colleagues. 

This disparity can create cultural tension, reduce engagement and contribute to higher turnover in roles that are already difficult to recruit. 

Aligning benefits across staff groups brings several strategic advantages: 

• Improved retention, reducing costly recruitment churn 

• A more inclusive culture, supporting staff morale and productivity 

• A unified wellbeing strategy that reflects the interdependence of all workforce groups 

• Greater transparency and fairness, supporting the school’s reputation and employment brand 

This is not merely a moral issue. It is a financially rational one. 

A cohesive, supported workforce performs better, remains longer and places fewer demands on budgets and leadership time. 

Providing access to healthcare and wellbeing support across both teaching and support staff can improve inclusion, engagement and value. Our report, The case for whole-of-workforce health benefits, explores the impact of extending support across an entire workforce. 

Strengthen governance through regular employee benefits reviews 

Strong governance has become an essential component of a sustainable independent school. 

Governors now expect: 

• Transparent reporting 

• Evidence-based recommendations 

• Alignment of financial decisions with long-term strategy 

• Clear articulation of workforce risks and liabilities 

Employee benefits contribute significantly to these discussions, yet are often overlooked in board-level reporting. 

A consultancy-supported review provides leadership with: 

• Scenario planning for different workforce models 

• Long-term cost projections 

• Risk mitigation strategies, particularly around absence and pensions 

• Clear documentation to support regulatory compliance and public benefit reporting 

By elevating benefits into strategic planning discussions, management can provide governors with the confidence and clarity needed for effective long-term decision making. 

Treat employee benefits as a strategic investment 

For schools, employee benefits represent a rare opportunity to reduce expenditure, strengthen workforce resilience and support the school’s long-term mission. 

When used strategically, benefits are not simply an HR cost. They are a financial instrument, a risk management tool and a foundation for workforce wellbeing. 

In a sector defined by tradition and evolving expectations, those schools that modernise their approach to benefits will be best positioned to thrive into the future. 

A practical employee benefits checklist for school leaders 

Financial sustainability is rarely achieved through a single initiative. Small improvements across employee benefits, pensions, wellbeing and absence management can collectively have a significant impact.  

The checklist below highlights practical actions school leaders can take to review existing arrangements, improve value for money and support long-term organisational objectives. 

Conduct a full audit of existing benefit spend 

• Benchmark all policies against industry standards and current market pricing. 

• Identify legacy provisions and underutilised benefits. 

Review pension schemes for cost efficiency and workforce alignment 

• Assess contribution levels, scheme design and contractual commitments. 

• Many schools have already reviewed Teachers’ Pension Scheme participation, but ongoing governance and regular audits across all pension provisions are important to achieve continued best value.  

Stabilise budget volatility by insuring employee absence 

• Model current absence costs, including cover and supply, overtime and long-term sickness. 

• Implement absence insurance to mitigate unexpected financial shocks. 

• Use insurer reporting to track trends and inform workforce planning. 

Introduce preventative wellbeing measures to reduce absence duration 

• Deploy early intervention services such as primary care, physiotherapy, mental health support and triage. 

• Engage employees with the preventative services available to them. 

• Establish clear return-to-work and rehabilitation pathways.  

Repurpose budget to provide low-cost health solutions for the whole workforce 

• Use virtual general practitioner services and digital health platforms to reduce NHS-related delays. 

• Provide broad access across teaching and support staff to improve inclusion. 

• Offer a suite of voluntary, employee-funded benefits to meet varied individual needs without adding cost to the school. 

Harmonise teaching and support staff benefits 

• Reduce disparities that negatively impact culture, retention and recruitment. 

• Align key benefits such as healthcare, wellbeing support and life assurance across roles. 

• Ensure affordability through tiered, scalable benefit design.  

Leverage economies of scale through collaborations or trust-style structures 

• Explore co-purchasing benefits with partner schools. 

• Use shared procurement to secure better pricing and reduce administrative burden.  

Use data and reporting to strengthen governance and decision making 

• Provide governors with clear cost-benefit analysis and risk models. 

• Integrate benefits data into strategic planning and budget forecasts. 

Build a long-term workforce and wellbeing strategy 

• Align benefits to your five to ten-year financial plan. 

• Ensure benefits support staff wellbeing, workload management and retention. 

Communicate clearly to maximise engagement and return on investment 

• Launch benefits with tailored communication to teaching and non-teaching staff. 

• Track usage to ensure benefits are delivering expected value. 

• Reinvest savings into high-impact wellbeing and health initiatives. 

The information in this article is for general information only and is not intended as advice. Any examples provided are illustrative and not necessarily representative. Outcomes, including potential cost savings, will depend on individual circumstances and are not guaranteed.