Benefits in charity organisations

The third sector has never been more benefits driven, realising it needs professionals over ‘keen’ volunteers, says Rachel Gordon

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Case Studies: The Charities Trust, The British Society for Rheumatology

For those in demanding jobs, retail therapy provides temporary relief, as does going on holiday. But, if work is just an endless round of targets, long hours and stress, it’s time to look beyond short-term fixes.

It’s a clich…, but working in the voluntary sector can result in greater job satisfaction. The pay off is that salaries are invariably lower and benefits basic – or is this always the case?

Charles Cotton, reward adviser for the Chartered Institute of Personnel and Development (CIPD), says: “Often a charity can’t compete with the private or even public sector for salaries, but some do take their benefits provision seriously. The work is often interesting and varied. Hours are more likely to be flexible and if you can accept less pay, this is often what matters.”

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Maybe it was the level of support for the Boxing Day tsunami victims or the massive impact of Live8, but charity work is gaining in popularity. And it would seem that, overall, there is growing emphasis on offering improved benefits.

Lai-Har Cheung, good employment practice manager for the National Council for Voluntary Organisations (NCVO), explains the sector is changing for the better. In the past five years, the paid voluntary sector workforce has grown by 85,000. “Voluntary sector personnel are often highly educated. A higher proportion of employees have degrees or equivalent higher education qualifications than any other sector. It’s also becoming more diverse. Over 70% of voluntary organisations have a written equal opportunities or diversity policy. Almost two-thirds of voluntary sector employees are female. Their representation in the workforce is greater than in either the private or public sectors.”

There has also been an improvement in charities’ employment practices and working conditions. It is becoming increasingly common for charities to offer pensions, flexible working arrangements and childcare allowances. “Surveys of pay suggest that the pay gap between charities and other sectors is closing, but there is wide variation,” adds Cheung.

But benefits should continue to improve. According to the CIPD’s 2005 Reward management survey, 30% of charities plan to amend their benefits packages this year – more than any other sector. Of these, 65% are designing their entire reward strategies to help recruit and retain high-performing staff.

But it is impossible to generalise in this sector. Some organisations offer generous pay and have final salary pensions, while others are run on a shoestring. Natasha Waas, director for recruitment consultants Charity People, says: “Salaries are getting better – charities need people who can make things happen. The exception is in some of the biggest charities that think they can attract based on their name.”

She says the sector is buoyant and once people are in, they tend to stay in, although they may move every two years or so. “Benefits are not the main consideration, but often these will be a reason. We have many people from the private sector applying for jobs. The problem is some charities and organisations can’t afford to train them and so those with experience find it easier.”

Broadway, which works with the homeless, is listed in the Sunday Times’ 100 best companies to work for and has gained Investors in People status.

Helen Giles, HR director, says: “We’re in the top quartile for our sector when it comes to pay and have flexible hours. One of our strongest selling points is our commitment to training and development and the fact we welcome people from a variety of backgrounds, including those with no experience. It’s about attitude. We test people rigorously, but are open about who we take on.”

Those who land a job with a charity tend to have good holidays – a minimum of five weeks is typical. Broadway offers 30 days.

Pensions, however, tend to be less generous than in the public sector. And, according to Giles, this is fair enough. “Golden handcuffs are not helpful. There are people working for local authorities who should move on, but they won’t because of their pension. We contribute 5% to a defined contribution scheme.”

She adds motivation is key and can lead to good attendance. “We have good results in terms of absence. What we want to avoid is people ‘taking the Mickey’, taking sickies and not being bothered with our clients.”

She has also found that one of the best ways of ensuring motivation is to invest in training and development. And a cheap but appreciated benefit is an employee counselling service. “Details are supplied to us to show where problems lie, although identities remain anonymous. Our staff like it and, from our point of view, it means they don’t always bring problems to work.”

It’s rare to find private medical insurance being offered by a charity because it is expensive and often this does not sit comfortably with its ethos. Income protection is also less common. “We used to offer our staff income protection, but the premiums tripled. The cost has been pushed up as a result of long term stress claims throughout organisations [and] we could no longer afford it.”

So employee motivation would appear to matter more than first class benefits. Simon Barron, head of total remuneration for management consultants Hay Group, says: “People who work for charities will want to give something back.

It’s also often appealing to work for an organisation that believes in matters like defeating ageism and has commitment to equal pay, even if salaries are in the lower quartile. But, some charities do need to work on their communication when it comes to benefits, for example, if a final salary pension scheme is available, do staff know about it?”

While employees appear to like working in the voluntary sector, there is also a trend to move between employers after a couple of years. Stephen Wilson, personnel policy manager for the Children’s Society, says: “We probably have a turnover of around 15% which is too high, but our staff survey, which was supported by the union, showed people did feel rewarded.”

He adds the best fund raisers will always tend to jump ship and sometimes, promotion does not happen quickly enough. “We have a fairly non-hierarchical structure, and no-one travels first class or stays in expensive hotels, but we can’t always move people up. Despite this, some have come back to us when they’ve found the grass is not always greener.”

The Children’s Society offers 28 days holiday which rises with service, and a stakeholder pension scheme with a 10% contribution. The charity stopped its final salary scheme in 2003. Other benefits include carer’s leave of up to 40 days a year.

Wilson adds that the image of charity staff as posh girls wearing twinsets and pearls waiting to get married is outdated. “We need professional people – not quasi volunteers.”

Case Study: The Charities Trust

The Charities Trust offers a competitive level of pay and benefits, which has helped to attract staff from the private sector.

Jason Doherty, sales and marketing manager at the national payroll giving and corporate donation charity, says the package is better than that he received in the private sector when working for a national newspaper group. His job satisfaction levels have also risen. “After 18 years in the private sector, I wanted to work for an organisation that put something back into the community,” he says.

The Charities Trust contributes 5% in employer contributions to its pension scheme and provides critical illness cover, a healthcare cash plan and home computing scheme. It also matches donations through a payroll giving scheme, which includes £100 paid into a Freedom Account which is a personal charity account. “I ran a race recently, raising funds for the Tenovus charity, and my donations will be matched up to £500. In addition, there is an established training programme funding NVQ qualifications,” adds Doherty.

Case study: The British Society for Rheumatology

The British Society for Rheumatology aims to improve awareness and understanding of arthritis and other musculoskeletal conditions.

Debbie Smith, external relations manager, believes that while it offers a good range of perks, these are typically suited to certain types of employee.

“A housing association can be more like the private sector in terms of pay and benefits and there was also a different culture. But, in a charity while it would be rare to have a company car, you can expect good holiday, a pension, death-in-service and often flexible hours. I do find it a positive culture.”

In some cases, issues spread across the third sector. “My one complaint with the sector in general is there are not always clear polices on maternity leave. Considering how many females work for charities this is an area some could look at,” she adds.