Covid has prompted many of us to question what we’re doing with our lives – and what we’re doing at work. Many are asking whether they and their organisation have a clear purpose – and not getting a clear, satisfactory answer. Charities have potentially had the upper hand here – the desire to do good in the world has given them an advantage in recruiting employees who feel passionately about their cause, or who are drawn to the non profit sector in general.
But what now - when commercial organisations are catching up and getting clearer about their purpose, while at the same time, it’s becoming more ‘expensive’ to ally yourself with an organisation that doesn’t pay as well as the alternatives. Can charities still rely on purpose to sustain them in the new hybrid world?
Here's a quick overview of the discussion points in this episode:
AWA Host: Karen Plum
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00:00:00 Karen Plum
Hello everyone. Over the last few years, I guess many of us have been questioning what we're doing with our lives - I suppose a pandemic will do that for you! Maybe we're considering the work that we do or how we're treated at work. Perhaps we're thinking about whether the work has meaning for us and lines up with our personal values and beliefs.
If we're looking for purpose, what better place than a charity? They tend to be really good at communicating their purpose, I mean, let's face it, the purpose is often in the name of the charity, so it's hard to miss. But does that mean that charities are finding it easier to recruit and retain people who are keen to make a difference? Let's see what my guests think.
00:00:31 INTRO: Welcome to the Changing the World of Work Podcast where we provide insightful, practical content to untangle and demystify workplace change. I'm Karen Plum, director at Advanced Workplace Associates, where we combine science with nearly 30 years’ experience helping organizations change the way they work, for the better.
00:01:10 Karen Plum
Purpose is clearly important, but there are a number of challenges facing charities at the moment and those are making the task of recruiting and retaining talent pretty difficult. I wanted to explore the issues and to help me, I have three guests with different experiences and perspectives of the sector.
My first guest is my AWA colleague and HR specialist Brad Taylor. Brad works with nonprofit organizations and private sector companies, so has a wealth of experience. I asked if he thought that having a clear sense of purpose is still a way for charities to stand out.
00:01:47 Brad Taylor
There were a lot of events that occurred during the pandemic that caused organisations to rethink about what they stand for and how they articulate wider important social causes to their people, and some did that very well and some don't, but the charity sector is one that particularly does. Because it is so rooted in a cause of a particular type, it's very easy to say, well, I'm going to go work for this charity because we're doing this good in the world. And that resonates well with people. And so therefore there's an attraction to someone who's thinking well, yeah, what I want to stand for and what I want to do and how do I want to take the skills that I have, be it in marketing, finance, sales, business development, whatever how do I want to use those really effectively meaningfully in the world?
And there's the charity sector already set up to say come work with us, because we're doing this in the world and we can use your skills and your capabilities in an environment where people matter as well and who you are as an individual is important to us.
00:02:47 Karen Plum
I guess if it's important to you to feel like you're making a difference, then that may attract you into the sector and it might keep you in the sector, albeit might not keep you in the same charity. From charities I've worked with, they always say that people tend to move around within the sector, they perhaps less often move in and out of the sector. But maybe that's changing?
00:03:11 Brad Taylor
I think there's traditionally been a different type of balance to work and life when someone works in the charity sector, you know there won't necessarily be this expectation that you are on call 24 hours a day, even if you're on holiday that you're going to dial into a meeting. The culture and the ethos of the organization will be different, that actually you as an individual matter as well and if you're having some rest time, you take that rest time.
But at the same time, there's a very important purpose that that organization is doing. So when you're on site and you're working in that role, actually, it's becoming increasingly more like any other organization in terms of objectives and strategies that need to be achieved and how the organization goes about achieving those objectives. They're getting better at that. And likewise how they galvanize themselves and organize themselves to achieve those is getting better as well.
So I think it would be wrong for someone to go into the charity sector thinking perhaps this is going to be an easier ride. It won't necessarily, but what it will be is probably a different type of balance and a different type of culture, that means that people are able to have the opportunity to feel a lot more fulfilled because they're doing something that's cause driven. They also get their own time, which is part of the value proposition of working for this type of organization.
But there'll be downsides to it, you know, you perhaps won't get the same level remuneration that you would do in private sector organisations, for example. So there is this real question that people have to ask themselves is, well, what matters to me, what are the important things that I want to take off on my list here? And does the charity organization provide the best opportunity for me to achieve that?
00:04:52 Karen Plum
Yes, I think there used to be a perception of charities that they were all cash strapped, so, you know, you wouldn't get paid very much and perhaps they wouldn't look after you. But I think these days charities have to operate as fully functioning commercial businesses with those business imperatives and with the right standards.
Certainly several of them have come under the spotlight in this country recently for their practices and obviously there's a regulator and a Charities Commission and they have to adhere to the rules the same as organisations in other sectors.
00:05:28 Brad Taylor
There's a greater level of expectations, both from an operational rigor and the standards that monitor charities, to expect them to do things professionally and properly, but also public expectation. There’s so much more transparency now about how a charity is running itself and where that money is going. But likewise they need to make sure that they're doing this in as robust ways possible.
So the need for, you know, high caliber of leadership skills both at the Board of Trustee levels for a charity and also the leadership team is increasing. And so therefore what we're seeing is rather than people working their way up through a charity to eventually hold a leadership position at the table, those organizations are reaching out into, say, the private sector, the public sector, to search for those level of skills to bring in to make sure that the charity is run properly and professionally.
00:06:21 Karen Plum
And certainly, again, from my experience, charities told me that they recruit in young people, they train them up, they put them through a whole program of working through different Directorates and different areas in the charity so that they learn all about how it works. And that maybe takes two or three years, but then there's nowhere for them to progress into.
00:06:40 Brad Taylor
There are typically two streams I've seen in charities when it comes to career paths. There are those types of roles where people are able to work their way around the organization to really get a good breadth of skills, as you were saying there, and move between the various Directorates because their role is very much ingrained into the heart of what the charity’s all about.
And then there are those roles that come in because they have a particular profession. So perhaps they're a finance person or an HR person or a marketing person and therefore they don't necessarily want to move around the entire charity, but they want to be able to still grow their career in their profession.
But there comes a point for both of those, which is, well, what do we do next with them then? So for the person who's been all around the Directorates, it might have taken, you know, two or three years, OK, well now do they have the capability to be made a manager of an area or a head of an area?
And then in the professional stream, OK, they've been say a marketing executive for the last three years or so and we don't want to lose them because they really understand the organization and they know how to market to us, they’ve got all knowledge, so we’d better make them a manager and give them, you know, a couple of people to line manage because that's the only space that they've often got to go in.
And the challenge with that of course is that we then get people who perhaps don't necessarily have all the range of skills to be an effective line manager going into those roles. And there'll be some that want to learn, they're very keen to learn those skills, but likewise there will be those that perhaps aren't motivated to really manage people. They just want to do marketing or great finance or whatever it is that they do.
And there's the problem now, we're going into a world where people are working both in offices and in remote locations. People looking for so much more social connection and purpose with the organization as well.
A great line manager needs to be able to connect with everyone individually, no matter where they are, and really make sure that things like their well-being is looked after; that they feel included as part of the organization; if there's any mental health issues that those are being talked about and addressed; that the person’s clear on their objectives and how the objectives relate the goals of the organization; and that they feel equipped and enabled to go and execute all those things.
Now there's a lot of demands and therefore it's the make-or-break point for charities at the moment is how do we equip our line managers as speedily and as effectively as possible in order to be able to carry on doing what we want to do really, really well.
00:09:06 Karen Plum
And I guess in that sense charities are no different to other organisations that are needing to adapt to these different patterns and ways of working.
00:09:18 Brad Taylor
Yes. What tends to differentiate them is culture, at the end of the day, it's the way things get done. Now that's a very broad statement because obviously every organization in every sector will vary slightly on how it goes about doing things. But typically in say the private sector you're going to see much more of a results driven culture because there are shareholders that need to be satisfied, there’s results and targets that need to be hit. And therefore the conversations are around ensuring the capability is there and the very quick effective conversations to make those things happen.
That's not necessarily the case in the charity sector. It's so much more around, we want people who are so enthusiastic about the cause of what we're trying to do that they become advocates for it and passionate about it and give their very best to make the charity a success, despite the fact that we may not have as much money to pay them. Or a wider range of benefits to supply them with. So therefore we need to get that right.
And that's the challenge for this particular sector - is how we develop all the skills and capabilities that we need to manage that type of culture as effectively as possible.
00:10:33 Karen Plum
It seems that the landscape is changing for charities and as with private sector companies, they're really needing to focus on the people and not just rely on attracting people that have a keen sense of purpose.
Next, I was delighted to welcome Fiona Condron to the podcast. Fiona is an Audit partner at BDO, a global organization providing accountancy, tax and advisory services to clients in more than 167 countries. I started by asking if she could explain what her role entails.
00:11:06 Fiona Condron
So I'm an audit partner at BDO, which means I specialize in providing external audit services exclusively to charities actually. So BDO specializes in working with the larger charities and not-for-profit organisations in the UK, and that means I've got the privilege of working with many of the most recognizable charity brands.
And alongside that, I also provide training and technical updates to the sector, including trustee boards and management.
00:11:35 Karen Plum
Right, got you. OK, so after a couple of years of COVID and now obviously with the cost-of-living crisis that we're getting deeply into, what are the key challenges that charities are facing at the moment?
00:11:51 Fiona Condron
The real issue that many of them are facing is around everything to do with their workforce. So we're experiencing, like commercial businesses, a higher turnover in terms of staff - maybe people didn't look for new roles during the COVID period, but now feel that they're ready for a change. But also in filling those new roles, obviously there are salary and inflationary expectations that people need to meet now because of the cost-of-living crisis.
So we often talk about a war for talent, which means, you know, there are not enough people available to do the roles and those people are commanding slightly higher salaries even though it's in the charity sector, because they're looking at the equivalents that they may be able to get in the commercial world. And although traditionally the charity sector has attracted people based on a sort of values based employment proposition, I think with the cost of living going up so much, people are obviously having to think a bit more discerningly about their own circumstances; and whether at this stage it's better to look for a role that will pay slightly more and then they'll perhaps return to the charity sector in a few years’ time, hopefully when this particular recessionary wave has passed.
So I think the whole people issue is a real challenge for the charities in terms of recruiting, retaining and having a really valuable people proposition, which will ensure that the workforce remains as stable as it can.
00:13:21 Karen Plum
It's interesting because when I worked with some charities a few years ago, I think it was very much the case that people that went into the charity sector, as you say, they were very much looking for an organization where they could make a difference and where the organization itself had a very clearly stated purpose.
00:13:41 Fiona Condron
So I think people still are attracted to the idea of working for a charity in that kind of altruistic way. But at the moment the decisions are being made more around what's right for individual circumstances and their own families in terms of offsetting the high inflationary costs. But I remain very optimistic that over time, people will gravitate back to the charity sector, but I just think it's a particularly challenging time at the moment.
00:14:11 Karen Plum
So that kind of feels a bit like a double whammy for charities really, coming off the back of a couple of years of COVID where I'm guessing that fund raising hasn't been perhaps as easy as it was before COVID, and now they're having to fight even more for employees. How are they responding?
00:14:29 Fiona Condron
I think actually from a financial perspective through COVID there was a number of different support packages available in terms of the coronavirus job retention scheme and the various grants that were available. So many charities actually have emerged from the pandemic in, I hesitate to say, good financial position, but in a financial position which is perhaps better than they had anticipated.
But I think where they are also struggling in terms of the people proposition is obviously many charities are hugely reliant on volunteers. And if you think about charities that run retail chains, for example, they are hugely reliant on volunteers to blend with paid members of staff to make that activity profitable. And actually the older demographic were the ones that were typically volunteering in charity shops and they've been the cohort that have been more hesitant about returning to that environment, either on health grounds or actually because, you know, a number of older people now are working for longer as well themselves in terms of paid roles.
So that's sort of also been a bit of a challenge for them, but I think you're right that towards the smaller end of the sector there is definitely a concern that despite the government support, they will now struggle to get back up to the same levels of fund raising that they had in the past and again with the recessionary impact impacting on discretionary spending.
We often find in these periods that the cancellation rate for direct debits, which you know is the lifeblood for many fund-raising charities, that begins to tick up as people you know are a little bit more discerning about, on a month-by-month basis, what their outgoings are going to be.
00:16:15 Karen Plum
Yes, they're literally having to go through their bank statement and see where the money is going. And as those big bills are coming in for their energy and the cost of food going up, then it probably feels like an easy thing to do to cut out that £20 a month that's going to whichever charity they've previously supported.
So I mean, in terms of how the charities are responding, obviously they've now got a big challenge on their hands to recruit and to retain the talent that they need. How are they going about trying to attract new people and to keep the existing people - are they embracing things like hybrid working?
00:16:56 Fiona Condron
Yeah, definitely, I think that's a really huge positive. So I think charities have always been an employer where they've embraced sort of flexible working and perhaps provided staff with more opportunities to work in an environment which is sort of suitable for them. So actually moving into a hybrid way of working has been relatively straightforward, I would say.
So lots of charities that I work with have used this as an opportunity to reduce some of their overheads and the footprint that they have through owning or leasing properties and that's obviously accelerated that need for flexible and hybrid working because they don't have sufficient office space for people. But I think like all organisations, it's getting the balance right that's important, so whilst encouraging and supporting people to work in a hybrid way, you need to ensure that you can work out the best way of getting people together to collaborate and to sort of innovate, but also to help with people's own personal development through that learning on the job if you like.
And linked to the idea of there being a higher turnover of people, you particularly need to think about the onboarding process and whether it's more effective to do that remotely or through, you know, getting together as a team.
The other thing I would say is that again, not dissimilar to commercial organisations, but this idea of moving more into this hybrid working has accelerated digital transformation, which I think perhaps charities haven't always had on the top of their list of priorities, but obviously through COVID it became an absolute necessity to be able to operate using remote platforms like Google Docs, OneDrive, SharePoint. Et cetera, as well as the communication tools like Teams, etc. to stay connected.
I think the hybrid way of working is definitely here to stay and I think if anything, the charity sector are demonstrating to other employers that it really can be a positive change.
00:19:06 Karen Plum
And they've taken the opportunity to up their game as well, as many other organisations have done. But they're really now having to recruit in the bigger pond, aren't they, with a lot of other serious competitors.
00:19:19 Fiona Condron
Yeah. There was a report that was actually issued today that's noted that typically charity sector pays about 7% lower than the commercial sector and again a number of my clients are doing benchmarking reviews now of their staff because often charities have quite complicated payroll structures and maybe multiple levels within their payroll structure. They have multiple levels and that actually makes life quite complicated in terms of working out the skills that you need and also what's the right level of remuneration for them.
But I also think that they’re perhaps taking this opportunity to think more broadly about what their employer proposition looks like and, you know, the tangible and intangible benefits that they can offer that will ensure that they can entice and retain really exceptionally talented people.
00:20:12 Karen Plum
Perhaps people could have coped with 7% less because I'm doing something that's really meaningful to me and I can cope on that sort of a salary, perhaps now they can't.
So just to wrap up, I'm curious, is there something that you find yourself saying over and over to clients? Is there a theme or a topic that you are regularly advising charities about?
00:20:36 Fiona Condron
There's a couple of things that sort of spring to mind. One is around making sure that staff have really clear objectives and that you have regular appraisals. Again, I think in the corporate world, the idea of sort performance management is probably more embedded from an HR perspective and we typically find in the charity sector people perhaps don't have their job descriptions updated as often as they would otherwise do and therefore when it comes to those annual reviews and that sense of, am I progressing, am I developing, it's not as easy as it is in other organisations to then link back to – well what did I set out to achieve this year and am I on track and if I am on track to demonstrate that I've met these objectives. Where do I go from here?
So I think it's really important to have another look at that whole career development framework within a charity organization. Because as I say you can't just rely on the fact that people have come to work for you and they will stay with you for a long time just because they feel that kind of connection. Everyone wants to know that they are improving themselves and developing their skills, whether it's to employ those skills in your own organization or somewhere else?
00:21:54 Karen Plum
Everybody wants to progress and in the smaller charities there are just not that many opportunities, until somebody leaves.
00:22:02 Fiona Condron
That's true, and actually the charity that I'm involved with in on a personal level, we recognized that we had a need for digital skills and social media skills and we've actually had a huge success of taking somebody through an apprenticeship program and really using those skills and now we're going through exactly that thought process of how we can develop that role to encourage and support her to continue rather than letting go and then having the next apprentice come through.
00:22:33 Karen Plum
I love the idea that organisations are doing things differently, being creative and trying to get ahead of the challenges. If you’re interested in the report that Fiona mentioned, it's called “The price of purpose: pay gaps in the charity sector”, and there's a link in our show notes.
Finally, I thought it would be interesting to get the perspective of someone running a nonprofit organization and I was lucky enough to chat with Liz Cotter Schlax, President and CEO of United Way of Southern Maine. So firstly, let's find out what they do.
00:23:07 Liz Cotter Schlax
United Way of Southern Maine is part of a network of United Ways across the United States and around the world. There actually are United Ways in 40 countries, and United Way is about mobilizing the community to solve really vexing problems together. And that's why our name is what it is!
And we do that through asking people to give and where we are sort of pioneers and made our name and make most of our money, is through giving at the workplace. In the US we have a phrase that people sometimes use to brush someone off, which is “I gave at the office”, and that is United Way because we do primarily workplace giving, but we also do advocacy in the public policy realm and grassroots advocacy, as well as encouraging and enabling and mobilizing volunteers to tackle problems together.
So it's really a holistic approach to addressing any specific community’s most challenging problems. So while a United Way is part of a global network and we derive a lot of strength from that, each United Way is local and independent and working on the issues that are most important to the local community.
00:24:23 Karen Plum
So what would you say, Liz, are the most pressing challenges for your organization at the moment?
00:24:31 Liz Cotter Schlax
I think that the most pressing challenge when we look at things is we're always focused on our mission, which is addressing big challenges in our community. And that's pre COVID, post COVID, you know for decades to come. And obviously, our communities are tremendously challenged right now by the fallout from COVID. So you know, first and foremost our communities need us the most right now and then obviously we are all experiencing to different extents across the globe, the challenges of the economy right now in rising costs.
And so in a resource constrained environment where we depend almost entirely on individual and corporate giving to be our funds that we use to make change in community, it's pretty challenging to ask people to dig deeper into their pockets when they're already digging deeper for things like their fuel for their automobiles and their food and housing costs.
I don't know if this is the same in the UK, but we really are having incredible increases in housing costs across the country and where I live in Portland, Maine, that is at the top of everybody's list of problems in our community, so with all those rising costs and with greater community need, sometimes driven by higher costs, but other factors as well due to COVID primarily, we're seeing great community need and people feeling like they don't have the resources to address them as well.
00:26:05 Karen Plum
And as an organization, are you now having to work differently than you were before the pandemic?
00:26:13 Liz Cotter Schlax
I think we are and I think most people that I've talked to have recognized some silver linings to the clouds that we've all been under. And I think this is one of them, that it's forced us to challenge our notions of work and what it means to be part of a team and how we build team. And what it means to be productive and how we measure and look at that and I would say that particularly newer generations in the workplace have been challenging those norms for a number of years and COVID proved their point, that we didn't all need to be in the same room necessarily to be productive.
And you know, that's really a challenge for United Way we have operated exclusively, I will say boldly! face to face, because all of us are local and independent, so we can because it's locally you can physically gather the Mayor and the CEO and the nonprofit executive together to tackle the problem together, literally in the same room.
Because we all live in the same town or the same general community and that obviously in March 2020 when all of us here in our community changed that way of operating, we had to learn very quickly and we did and we continue today to use those learnings and so figuring out that balance is something that I have almost daily conversations with my team and with other leaders out in the community about - should we make this a hybrid meeting? Should this be an in-person meeting? Can we do it all virtual?
That is a regular part of our conversation and I don't see that going away anytime soon and certainly for our employees, their expectation of being together in community, physically, with each other, as well as working entirely remotely and everything in between, we have varied expectations.
In fact, we had a couple of employees leave in the last month and we do exit interviews with each of our employees and literally one of them is leaving because the job that she can take is fully remote and we have a one day per week in the office work requirement right now. And she wanted to be able to work fully remote.
And the other employee (both of these exit interviews – both of them, long tenured employees in the same department of our organization) – the other employee said that she wished we were in the office more.
So it I think that is what organizations are going to have to face going forward and we are no different.
00:29:00 Karen Plum
You really can't please all of the people all of the time, can you? And now it seems there are many more opportunities for people to go and get the conditions that they're personally looking for. So are you finding it more difficult to recruit now?
00:29:15 Liz Cotter Schlax
I will say in the last couple of months we've actually seen a turn, even though here we have the lowest unemployment in our particular area that we've had in years we’re below 3% unemployment in my particular area. But we're seeing a significant increase in applicants for a few open positions that we have. Hard to tell whether it's because those positions, the specific roles, are very attractive to people, but we also think that people have really had the time to consider how they want to spend their time, what they want to be devoting their precious resources to. And people are choosing to come and work in the nonprofit sector for that sense of purpose. And if we're going to be working all these hours, we might as well be doing it somewhere that we're really passionate about and committed to.
So we are seeing an increase again in the number of applicants for positions. So hard to tell where that's going, but I do think, to your point Karen, people are better understanding their own needs and I think that goes with the remote versus in person, but it also goes with what kind of work am I doing? What kind of environment am I in? You know, what is the collegiality, what is the supportiveness of the environment I'm in and where do I want to be spending my time.
Working in a purpose driven environment gives you a lot of benefits besides the pay, but you have to be incredibly intentional about that. I honestly think that in the nonprofit sector, we have taken that for granted, and I think we leaned too heavily on that for too long. So while nonprofits, very rightly so, are strongly scrutinized for how we spend our dollars and staff salaries are always a consideration that our donors look at, as well as other funders, I think that there are plenty of other ways, even in cash strapped times that people can and that organizations have tried to make their workplaces more attractive, and I think that is obviously about purpose.
Everyone is really focused on purpose. And while we have that baked in because of our mission, other companies probably have to work a little bit harder at it, but we do have lots of options in terms of benefit programs and workplace culture that people can focus on to create that sense of purpose as well.
00:31:45 Karen Plum
So maybe charitable and nonprofit organisations started out with an advantage by connecting with purpose, but other organisations are catching up fast, as people are looking for that meaning in their lives more and more.
And that's it for this episode. I really want to thank all my guests Brad Taylor, Fiona Condron and Liz Cotter Schlax for sharing their insights with me. The pandemic was the catalyst for many things that have been beneficial to organizational development. It's going to be interesting to see which are going to stick, over time.
00:24:58 CLOSE: Thank you for listening to this episode of the Changing the World of Work podcast. Please follow or like the show so you don't miss any of our content. You can find more information on this episode in our show notes, including a link to the AWA website, if you'd like to know more about us. Hope to see you next time. Goodbye.