Posted by: Adrian Lewis

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What are the current Reward challenges facing the charity sector?

As part of Oakleaf’s ongoing commitment to supporting knowledge sharing and collaboration between our clients across the charity sector, we were delighted to welcome HR leaders from a number of leading charities to our latest breakfast round table debate.

Led by Reward and Wellbeing expert Jane Vivier, today’s focus of discussion was on the uphill task HR leaders across the charity sector face in designing and delivering effective Reward and Recognition strategies, against a tide of ongoing challenges and increasing sector scrutiny.

With income sources under increasing pressure and the scope of public scrutiny widening, it is clear that the charity sector needs to be ever more accountable about what they do with their money, with highly skilled Reward professionals crucial for many charity’s future success.

Today’s discussions centred around some of the following challenges to hit the Charity sector:

  • Inflation currently running at 2.9% - those who earn less than the national average are most likely to feel the impact of inflation. As inflation rises, the amount people that can afford to donate to charities will be impacted, leading to further potential erosion of income
  • The B word! - Brexit may constrict the labour market for a variety of roles in the charity sector, whether it be by regulations or simply the fact that people are put off coming to the UK by the uncertainly Brexit brings
  • The emergence of the golden ‘hello’ payment for some increasingly hard to find skill-sets
  • The end of the public sector pay cap will likely lead to increased competition for key skills and labour
  • The National living wage, now at £7.50 per hour, has been rising at 6% per year. Typically, pay has increased more for those at the bottom of the pay scale than for those at the middle, leading to pay compression and less pay differentiation.
  • Pension auto-enrolment – employee contributions will increase to 5% in 2 years. Again, this will affect those in the lowest paid roles the most in terms of percentage reduction in disposable income. People need educating on how and why to stay in a pension scheme
  • Millennials and Gen Z’s now entering work are predicted to have 20-30 jobs in what will be a significantly longer working life time, as opposed to previous generations who could expect 2-3 jobs over their working life. How do we keep the increasing gig-economy mindset engaged and rewarded?

Despite these challenges, the discussion at the event made it clear that there are some real opportunities for charity sector employers to engage and retain talent, particularly through leveraging their organisational purpose and individual culture. Feeling able to be ‘yourself’ at work is an increasingly important differentiator for employees, and it appears that for people in charities, this can often mean more than simply how much they are paid. Getting this right can be tricky, but those organisations who do often see higher levels of performance, motivation and engagement.

Some other tips shared today on what might support the creation of a rounded Reward and Recognition offering for employees include:

  • Put the emphasis on career development and not just performance related pay
  • Use your Apprenticeship Levy well - if used correctly this can be an opportunity to bring in talent, train them and benefit financially
  • Wellbeing is increasingly important. People are putting more emphasis on place to work, culture, and investment in people. Reward is no longer seen as simply financial
  • Feedback from management is such a powerful tool, but often not utilised enough. Something as simple as people hearing about their progress and how they can improve can be really engaging
  • Recognition can go a very long way for very little cost – awards, celebrations, even just a simple thank you!
  • Remember, not everyone wants to stay with the same employer forever, so focus on exiting people as well as possible. A well exited employee is much more likely to return to that employer later in their career and potentially add more value.

To find out about future charity sector events, please contact Adrian Lewis on AdrianLewis@oakleafpartnership.com


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