Retaining Employees in a Social Enterprise

September 19th,2013

“How do I retain people?” … “To what level do I need to raise salaries to retain people?” …

Retaining people is tough for some organisations in the social space. A few weeks back I had a discussion with the head of one of the social enterprises I am involved with on what motivates someone to stay on in an organization, both for-profit and non-profit. He outlined a 4-factor model that I found to be interesting and I used it a couple of times in other conversations. Based on the feedback I got and the challenges many social organizations face in retaining good team members, I decided to plagiarise his idea and write about it (maybe he plaqiarised it from somewhere else!). I include NGOs, social ventures, foundations and other philanthropic institutions under the wide banner of social enterprises.

The 4 factors are Recognition, Impact, Work Environment and Compensation. This is what he had to say about these factors and I am taking total artistic liberty in rewording what he said – and this possibly has no real connection to his actual words!

Recognition. Our organization has to be recognised as a leader in the sector we work in. We need to be the go-to guys for our sector and people need to recognise us for the work we do.

Impact. The work we do has to have a significant impact on the lives of the people we work with. For example if we channelise money into an NGO that is educating children, are we able to make a significant positive impact on their learning outcomes?

Work Environment. The office has to be an interesting place for us to work in. I should be excited about coming to work and should be surrounded by people who are a pleasure to work with.

Compensation. We are not in the social sector to make a ton of money. So let’s take this factor off the table. But we should earn enough to be able to have a ‘decent’ life style.”

I found this framework useful when addressing the questions at the top of this blog with a couple of other people. Recognition makes us feel proud to belong to a particular organization. We get labeled a winner if our organization is recognised as a leader in its space. Impact makes us feel great that we are making a positive change in the lives of the people we touch. A team member will still be excited even if his/her organisation is small (and therefore not a leader in its space) but it impacts the lives of the people it works with. But if we are recognised and have impact but the office is a terrible place to work in people will move on. What is a great office environment is a personal decision. Serious, process-driven, brimming with energy, open … different people like different environments. People like to be treated ‘well’. That is why it is important for social entrepreneurs to select their team carefully and for people looking for a job to select their employers carefully. But what one doesn’t want is a bunch of clones who think, dress and behave alike – dissent, arguments, etc are necessary for a dynamic organization (but a management nightmare). And finally, compensation; I am working on the assumption that for people who have decided to join the social sector, amassing capital is not their main driver. But people need to be paid fairly. What is fair is very subjective and there will always be people who will be unhappy with compensation.

I believe, however, that if organizations focus on the first 3 factors – recognition, impact and work environment – compensation is less of an issue to recruit and retain people.