What can charities learn from the Taylor Review on employment?

Charities and their employees have a common mission and common purpose, which creates a powerful opportunity for good employee relations. Yet at the same time there is a fundamental friction: charities’ dedication to fulfilling their mission may come at a cost to employees.

Yesterday, Matthew Taylor’s Review of modern employment practices was released. This report looks at the challenges of the modern labour market, outlining some concerns and some solutions. Its publication brings a good opportunity for the charity sector to have a clear and honest look at its own employment practices. In NPC’s recent State of the Sector research, 76% of charities said that their staff were a ‘very important’ resource in achieving their mission. The question is: are they valuing this resource in practice?

Job instability

Much of the initial coverage of Matthew Taylor’s Review has been on the gig economy and the rise of zero hours contracts. The Review notes that employment flexibility is important for enabling businesses to respond to changing market conditions.

Just as market conditions change in the private sector, beneficiary need changes in the third sector. This means that a degree of flexibility is very important to let the third sector do its job. Combine this with the fact that more flexible working arrangements bring the opportunity to reduce waste, and you’ve got a very attractive model for parts of the third sector. Not to mention that, as Taylor’s Review points out, most employees do genuinely enjoy the flexibility this type of work brings.

Yet the fact that the charity sector is more dependent on zero hours contracts than any other sector feels like a difficult finding. The Chartered Institute for Personal Development found that 34% of voluntary sector organisations employed staff on zero hours contracts, with the public sector at 24% and the private sector at 17%. It’s no secret—and is something that the Taylor Review picks up—that people on these contracts can find themselves with unstable and poor quality employment. That’s hard to reconcile with a sector dedicated to social justice.

Of course, these numbers may reflect struggles in sectors that charities have a lot of workers in, like social care. Still, if charities continue to employ staff on zero hours contracts, they must remain acutely aware that if misused they can be exploitative. It is important they consult employees to create a system that is fair and works.

Low pay

Low—or no—pay in the charity sector is in part driven by the tough realities charities face. Many are dependent on public sector contracts. These have tight margins, and this diminishes the available resources for salaries.

Charities are also aware that the public wants as much money as possible to be spent directly on beneficiaries, as demonstrated by findings from NPC’s Matter of trust research with Ipsos MORI (42% of respondents said high executive salaries were a concern, with 26% saying they were worried about charities spending too much on running costs). These findings came alongside a preference for charities entirely run by volunteers, to which 66% of people said they would prefer to donate.

The Taylor Review says appropriate pay is a key element of job quality. But The Living Wage Foundation found that only 0.4% of UK charities are registered as living wage employers. This stat, coupled with the lower average wage of charity employees in general—and heavy involvement in sectors such as social care where low pay is common—is a significant concern.

The charity sector also relies heavily on unpaid interns for its resource-intensive work. The Review has also spoken out that such internships are an abuse of power by employers, damaging to social mobility, and not fairly distributed across the country. It has called for the government to ‘ensure that exploitative unpaid internships … are stamped out’.

Overwork

Third sector employees want to make a difference, and this can mean they are willing to go the extra mile. This is part of what sets the sector apart, and helps it to make its unique impact on the public good. However, at the same time it creates greater danger of overwork.

Work-life balance is one of the areas alongside low pay that is highlighted in Taylor’s report as a key element of employment quality. Yet a survey commissioned by the Guardian found that 71% of voluntary sector employees agreed or strongly agreed that they have to work extra hours to keep on top of their workload. The survey also found that 40% disagreed with the statement that they were able to balance their home and work life without hindering their career. Add to this high rates of stress and the trend of overwork looks more and more real.

The impact of overwork is significant: it is linked to health problems from mental illness to stroke, as well as stress and the erosion of relationships. This should be particularly concerning for charities that work in these fields as their working practices could be acting contrary to their mission. It is also not necessarily effective; employees who work longer hours tend to see a drop in productivity suggesting these extra hours may be wasted.

These concerns can be overcome with a suitable strategy. For instance, the mental health charity Mind puts in place wellness action plans that identify specific support needs for all employees. Combined with a wide range of support structures, these aim to create a system that minimises workplace stress and maximises workplace well-being.

Where next?

Ultimately, charities should be driven by their mission. But this should not reach an extreme whereby fulfilling mission does your employees harm.

How to prevent this will depend on the strategy, mission and structure of each individual charity. However, the Taylor Review does provide some good starting points. Chapter 7 on Responsible Business stresses the importance of employee engagement, making sure you understand the needs of your employees, and what you can do to make a system that works well with them. It also encourages transparency about how to help employees make informed decisions.

Doing this may take many forms. It may mean working closely with representative groups for your workers such as trade unions, or it could mean considering putting an employee on your board. Other options could include creating an employee advisory panel, or even something as informal as creating a culture that encourages frank sharing of views and needs between different levels of the organisation.

By asking the right questions, and consulting closely with their staff and wider stakeholders, charities have the opportunity to create new ways of working: ways that provide good work, and contribute towards better fulfilling their missions.