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Tara Daynes

Tara Daynes

HR Consultant

Read more about Tara Daynes

Never the Twain? Why the non-profit and profit sectors should meet, and the mutual benefit for HR


There is a common misconception of the not-for-profit (NFP) sector as being a dream for HR, since charity organisations are all apparently warm and fluffy, staffed by cardigan-wearing plant-whispering hippies  who have group hugs as an agenda item at meetings. Not so! In fact, according to CIPD labour reports each year, the ‘third sector’ has the highest proportion of employee disputes and grievances than both the private and public sectors.

I’ve worked for and with non-profits for almost 12 years, and although the sector has its issues, I believe there’s a lot that other organisations can learn from them – and also a lot that they can teach them!

Let’s look at the good stuff happening in NFPs, starting with employee engagement. As an Investors in People assessor, I’ve spent a lot of time talking to employees in all sectors about what motivates them, makes them feel valued and gives them job satisfaction, and NFPs such as charities and schools inevitably have the most positive staff. This is because they are generally extremely mission-focused, and have a strong sense of purpose and of making a difference. Most are genuinely committed to and concerned about the cause that their organisation is supporting, whether it is education, lobbying for policy change, finding a cure for cancer, saving whales or whatever. So they  sincerely care about doing a good job and improving the performance of themselves, their team and the organisation, even if they don’t get paid a fat lot to do it.

This brings us to the next thing that non-profits tend to be very effective at, which is stretching a budget. Even before the recession, third sector organisations were used to doing more with less – less money, less resource, fewer people. That means having people management practices that are still effective, without either breaking the bank or sacrificing quality. Commercial organisations often make the mistake of thinking that in order to properly train and develop staff, or recognise and reward them, a heap of cash must be chucked in that general direction; but that doesn’t guarantee a better return on your investment – far from it! So now that we’re all credit-crunched, I reckon it’s high time that the private and public sectors started learning a thing or two from not-for-profits about how to manage people on a shoestring.

But this should be a mutually beneficial relationship, so what can commercial organisations offer in return? To answer that, let’s look at why non-profits have more than their fair share of disgruntled employees in dispute with their employers.

Much of the good NFP stuff above is a two-edged sword – although third sector employees are frequently very engaged and dedicated to the cause,  this can be taken for granted by managers and employers who expect that goodwill to go much further than may be reasonable. Also, employees’ awareness of and commitment to the rights of their service users often goes hand in hand with their awareness of and commitment to their own rights as employees. So not only are they more on the ball about how they should be treated, they are more likely to kick up a fuss and fight for their rights if they feel they are not being treated fairly or lawfully.

Add to this, the lack of HR and ER expertise, especially in smaller non-profits. Due to the lack of funds, many have no internal HR resource or external support, certainly at a senior, more experienced level. How many HR Managers report into Finance Directors (or similar) who clearly have no clue about HR – what is that all about?! I’m not saying that if you pay peanuts you get monkeys (well, maybe a bit) but clearly lower salaries are less likely to attract higher talent. I’ve also come across very few boards of trustees that include an HR professional.

As a result, despite meaning well, senior management teams often simply don’t have the HR skills, knowledge, experience  or support necessary to create and implement effective HR practices, particularly around dispute resolution and handling complex grievances. Put all that together, and it’s probably no wonder that the third sector is suffering as a result of internal ruckuses.

So I think that now is as good a time as any for some collaborative, mutually beneficial strategic alliances between  profit-making and non-profit making organisations! Private and public sector organisations can bring their HR and employment law expertise and best practice to the table, in return for hints and tips on how to engage, manage, develop and reward people without spending a fortune – examples of effective non-financial recognition, sources of low-cost, high-quality learning and development etc. There are plenty of ways to go about it, such as workplace secondments, workshadowing, coaching, mentoring, networking, provision of guidance documents, policies and procedures, or even direct training.

A lot of companies have Corporate Social Responsibility activities such as fundraising through wearing silly outfits or taking part in strenuous activities. Laudable though this may be, I think that swapping expertise and experience is a more valuable (and mutual) donation! However, it seems that some people/organisations would prefer to sit in a vat of baked beans in the name of altruism, than to share knowledge (why – is it perceived as sharing power?) or put in any professional time and effort.

I was recently asked to be a guest speaker at an event at a local sixth form, which was enjoyable and worthwhile, regardless of any business benefit to myself (I’m not polishing my halo here, I just think it’s the right thing to do). I was shocked though when I arrived to find that I was the only one – all the others that had agreed to come along had either dropped out at the last minute or not shown up. Others had turned down the invitation unless they were paid for their time. Seriously? For twenty minutes of informal advice to business students? Shame on you people!

So here is my call to arms to HR colleagues in every sector and organisation. Extend your CSR remit to include collaborating and exchanging ideas, best practice, knowledge, skills, experience and expertise with those that need it, and that can do the same for you. Pass It Forward – it’s the basic premise of effective networking, after all, and plenty of us are prepared to invest in that, both financially and otherwise. The only investment here is a bit of time and effort – and surely this is an investment with a guaranteed return!

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Tara Daynes

HR Consultant

Read more from Tara Daynes

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