Why Schools Are Using Staffing Agencies More Than Ever (And What That Is Costing)

If it feels like your district leans on outside staffing more than it used to, you may be right. The numbers back you up.

The education staffing segment is projected to grow 3 percent in 2026 to $3.3 billion, with another 3 percent expected in 2027. Data shows that segment is mostly substitute teachers and aides going into K-12 schools. As of 2025, roughly 14.6 percent of substitute teachers in the country worked through a staffing firm rather than directly for a district. That’s close to one in seven.

A decade ago, outsourcing a meaningful share of your substitute coverage would have required a board-level conversation. Now it’s becoming a necessity.

What’s Driving It

The shortage is deeper than the headlines suggest. The most recent national scan found more than 425,000 teaching positions either unfilled or held by teachers who aren’t fully certified for their assignment. That’s about one in eight positions across the country, and the third year in a row the number has gone up. On top of that, 74 percent of public schools reported trouble filling at least one teaching vacancy going into the 2024-25 school year.

Teacher preferences have shifted too. Studies show that one in seven public school teachers moves schools or leaves the profession each year, a higher rate than in the 1990s. On top of this, educators have more work options than before, and a staffing firm can offer something a single district structurally cannot: more flexibility to work at multiple schools and assess which schedules or workplaces they like best.

The Loop That Keeps Feeding Itself

There’s a loop forming underneath these driving forces, and it helps explain why the number of school staffing agencies is growing.

Scarcity is the first element to point out. That’s because it gives workers choice. When open positions outnumber qualified people, the people have more leverage to decide where they work.

That helps create a divided labor market. A substitute who can work three districts, pick their days, and skip assignments they don’t want has little reason to commit to one employer.

This fuels the need for more staffing agencies. A fragmented market can result in the need for new staffing agencies to help serve the evolving demands of the market and offer more options for today’s flexibility-seeking professionals.

With the influx of agencies, the need for a managed service provider grows. MSPs were created to streamline and centralize staffing from a wide variety of vendors, and with so many vendors now in play, MSPs become a necessity.

For a district, the effect of this builds quietly. No single vendor relationship looks like a problem on the day you sign it. You bring one on for a therapist you cannot hire, another for a building that keeps running short on subs, and each decision makes sense by itself. But that often means the number of staffing relationships you are responsible for is growing faster than anyone is tracking.

Unfortunately, this loop will not break on its own. But implementing a more flexible workforce model can help.

How Bill Rates Fit In

Here’s where staffing math usually goes wrong. Compare an agency bill rate to a teacher’s salary and agency looks expensive. Compare it to what that teacher actually costs your district and the gap mostly disappears.

Start with pay. The Bureau of Labor Statistics (BLS) puts the median wage for special education teachers at $67,190. Then add that to what the district carries on top of it. BLS data on employer costs shows that statutory contributions and benefits add substantially to base pay for state and local government workers, and hiring itself carries a soft cost that rarely gets counted. And last divide that across a 172-day school year at 7.5 hours a day. For the median numbers, a special education teacher ends up costing a district about $77.14 an hour. Meanwhile, industry data puts the average agency bill rate for the same role at about $77.00. That means agency use costs about the same as direct hiring for special education teachers, so the choice should come down to which one gets you the best quality candidate, fastest.

That picture can shift by role, so it’s worth assessing each individually. Some roles like paraprofessionals, where turnover is high, tilt further toward agency use because it helps avoid absorbing expensive hiring costs over and over again. Some, like Speech-Language Pathologists (SLPs), lean toward agency use because of a shortage of available candidates and laws that make SLP services required. But for roles that have more pipeline or retention stability, it may be genuinely cheaper and easier to fill them internally. Which staffing approach you take shouldn’t always be about saving money. It should be about finding the most effective solution tailored to each specific problem.

What Does Agency Use Actually Cost?

As your staffing agency use grows, it often ends costing more than just the bill rate. It can administratively tax your team and create a gap between how many vendor relationships you have and how many you are actually managing. Every agreement creates work: a rate to track, invoices to reconcile, credentials to verify, performance to judge. When agency use grows one vacancy at a time, it tends to grows without anyone owning it. A principal calls a vendor for a hard-to-fill week. A special education director signs a separate agreement for a therapist. Six months later you have four vendors on four rate structures, and you are struggling to produce a single number for what contingent staffing cost.

The resulting fragmentation then costs you in a few ways. You lose pricing leverage, you don’t have a consolidated spend picture to help you negotiate sharpened rates with agencies, and you can’t compare how your different agency rate structures are actually performing.  You also can lose the thread on retention since agency coverage is built to handle the symptom. It often does nothing about the departure that created the vacancy, and it can obscure how often departures are happening. That’s a big problem as every teacher who leaves costs a district between $12,000 and $25,000 to replace once you count separation, recruiting, hiring, and onboarding.

Why “No More Agency” Is Not the Right Reaction

Plenty of districts look at a growing invoice and land on a simple answer: cut the agencies out. It feels like regaining control.

But this cuts your options drastically. Pulling back from agencies means losing access to a large share of the available workforce. You can no longer tap into the network of people who chose flexibility over a single employer, so your candidate pool narrows to whoever is willing to work for one district on one schedule.

A better question to ask about agency use is whether the relationships you already have are managed or scattered.

What Changes with an MSP

A managed program does not mean using more agencies. Usually it means using fewer of them, on purpose, while keeping the reach that makes them useful.

When you partner with an MSP, somebody becomes accountable for the whole picture. One agreement covers vendor access, so requisitions route through a single process. Performance gets tracked the same way across every vendor, so you can see time to fill and cost per position side by side. The spend sits in one place, so you can finally answer with confidence what contingent staffing actually costs you.

That visibility is what makes the next decision as educated as possible. Once you can see which roles genuinely need outside help and which ones your own pipeline could cover, you can pull work back in-house where it makes sense and keep vendor access open for the roles that resist everything else.

Districts buying agency coverage one emergency at a time tend to not get to that comparison. They usually just get a bigger invoice each year and less information about why.

Want to explore how an MSP partnership can help your school optimize its staffing approach? Connect with the Sunburst team today.