Workforce retention in 2026: are pay rises enough?

Article

Fiona Alston

Mar 05, 2026

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Remuneration has shifted in early childhood education and care, but workforce stability remains uneven. As services move through the first quarter of 2026, attention is turning to a more strategic question, how do wages, leadership and workload design work together to improve retention?

The sector has long advocated for stronger pay outcomes. Recent adjustments have delivered tangible improvements for many educators. That progress matters. It signals recognition of professional value and strengthens the sector’s competitive position in the broader labour market.

Encouragingly, some services are already reporting improved recruitment pipelines and stronger applicant quality.

Yet retention is proving more complex than remuneration alone.

Wages influence attraction. They also influence whether experienced educators consider staying.

However, exit interviews and workforce discussions across the sector suggest that decisions to leave often involve multiple factors:

workload intensity
unclear role expectations
limited career progression
inconsistent leadership capability
emotional fatigue

This does not diminish the importance of pay. Instead, it reframes retention as an organisational design issue rather than a single-variable problem.

Services achieving stronger workforce stability are typically addressing structural elements alongside remuneration.

A growing number of providers are reviewing how work is distributed across teams.

In high-performing services, leadership teams are:

auditing non-contact time allocation
streamlining documentation systems
clarifying responsibilities between centre managers and educational leaders
reducing duplication in compliance processes

These changes often produce immediate cultural benefits. Educators report feeling trusted, respected and professionally empowered.

This aligns directly with Quality Area 4 of the National Quality Standard, which requires effective staffing arrangements that enhance children’s learning and development. It also reflects Quality Area 7’s focus on governance and leadership.

When workload becomes sustainable, remuneration gains translate more effectively into retention outcomes.

Across industries, direct leadership relationships heavily influence retention. Early learning is no exception.

Services investing in leadership development are seeing measurable cultural shifts. Centre managers who provide:

consistent feedback
equitable workload distribution
transparent decision-making
psychologically safe environments

These investments create conditions where educators feel valued beyond remuneration.

Several providers have introduced structured leadership mentoring programs, indicating improvements in team cohesion and reduced short-term turnover.

This suggests that retention strategies grounded in leadership capability may generate compounding benefits over time.

Another positive shift is the increasing focus on career visibility.

Educators entering the sector are seeking clearer progression pathways. In response, some services are formalising internal career maps that outline progression from educator to room leader, educational leader or centre manager.

Structured mentoring, targeted professional development and succession planning are becoming more common.

These initiatives not only support retention but also strengthen governance continuity and organisational resilience.

Financial modelling remains critical. Wage increases affect margins, particularly for small and medium providers. However, recruitment costs, onboarding time, rising operating expenses and reliance on agency staff also have financial consequences.

When turnover decreases, service stability improves. Family confidence strengthens. Program consistency increases.

Retention therefore becomes both a workforce issue and a governance priority.

The positive development emerging is not simply higher wages. It is the growing recognition that remuneration, leadership capability and workload design operate together.

Pay establishes value.

Leadership multiplies it.

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