The Education Minister says teachers' demand for a 16 percent pay rise over two years outstrips what others in the workforce are receiving.
About 29,000 primary and intermediate teachers and principals went on strike yesterday, calling for better pay and conditions.
They had rejected the government's offer of a 14 percent pay increase over three years for new teachers and a six percent one for experienced teachers.
Chris Hipkins told Morning Report he expected there to be compromise.
"If they're going to hold fast to 16 percent over two years or eight percent a year, that's way out of kilter with what everybody else in the economy is receiving and I think I would be looking for some movement from their side on that as well," he said.
Mr Hipkins said the government is also working hard to address other concerns teachers have raised such as the workload and support for children with special needs.
"It's a balancing act for us, there's no question about that - we want to deal with all of the issues that teachers are raising," he said.
Yesterday teachers showed support for a possible two day strike.
Mr Hipkins said that was disappointing.
"I would prefer that teachers focus their efforts on reaching an agreement rather than preparing for further industrial action," he said.