Industries
Why NGO and social enterprise employees leave and how to understand why
Staff at NGOs and social enterprises leave for funding, field and workload reasons as well as pay. How to understand why, listen early and act.
7 min readRead article
NGOs and Social Enterprises
HR for Social Enterprises and Cooperatives: Members, Producers and Dual Goals
A social enterprise or cooperative must trade well and serve its members or cause at once. Here is how to build HR that holds both together.
Not sure what you need? Tell us about your business in six short steps and we will come to the first meeting prepared.
Share your requirementsHow the work is organised
A social enterprise sells goods or services and uses its surplus for a social purpose, such as employing artisans, supporting small farmers, running a fair-price shop or serving the underserved. A cooperative or producer company is owned by its members, who may also be its suppliers, workers or customers. Staff include a small management team, field or member-relations staff, production and quality workers, sales and accounts staff, and members who work or supply on varying terms. Boards are elected or made up of members, mentors and funders, who weigh in on both pay and strategy. Funding is mixed, from sales, grants and loans. The business must make a margin to survive, while the mission pushes towards fair pay, inclusive hiring and long-term support for people who might not be hired elsewhere. See also HR for NGOs and social enterprises.
Who does the work
- Chief executive or managing director
- Member and producer relations staff
- Production and quality supervisors
- Artisans, farmers and member-workers
- Sales, marketing and trading staff
- Accounts and administration staff
- Trainers and handholding staff
- Board members and elected office bearers
Where HR strains in social enterprises and cooperatives
Members are also owners, suppliers and workers
A person may be a shareholder, a supplier and an employee at once, and it is not clear which rules apply when a dispute comes up.
Mission and margin pull against each other
Hiring slower workers or paying fair rates reduces profit, and managers are criticised from both directions.
Management skills are thin
Founders are strong on mission but short on production planning, sales and people management, and a few people stretch across many roles.
Board and management roles blur
Board members step into day-to-day matters, including hiring and pay, and managers are unsure who they report to.
Pay differences cause resentment
Staff, members and professionals brought in from outside are paid on different logic, and each group compares itself to the others.
Seasonal and order-based work
Production peaks before festivals or harvests and slows afterwards, leaving income uneven for the people who depend on it.
Professionals leave for conventional firms
Outside managers hired for skills find that pay and decision-making are slower than elsewhere and move on after a year or two.
What a working HR set-up looks like
- 01
Separate the member roles
A clear statement of what rules apply to a person as an owner, as a supplier and as a worker, with a route for disputes in each. The HR policies and governance work helps. Confirm the legal position with a qualified professional.
- 02
Agree the pay principle
A written logic for how fair pay, market pay and member earnings are set, shared with the board and staff. The compensation and rewards strategy work helps.
- 03
Define who decides what
A simple chart of board and management responsibilities, including hiring, pay and day-to-day operations. The organisation design work covers it.
- 04
Strengthen management capacity
Training for supervisors and managers on planning, quality and handling people. The leadership and manager development programme supports it.
- 05
Smooth income through the year
Planned work for lean seasons, such as stock building, training or new products, so earnings are steadier. The workforce planning work helps.
What to put in place first
- List the roles in which any one person is both an owner and a worker or supplier.
- Write how pay was set for each group and check it can be explained.
- Note the last three decisions where the board stepped into management.
- Look at monthly earnings of production members across a full year.
Confirm with a qualified professional. What applies to you depends on your business, your state and your arrangements, and it changes. This page describes practice. It does not state a legal position.
Where GullyHR helps
- Organisation design
A clear line between board and management and a structure that matches the size of the enterprise.
- Compensation and rewards strategy
A written pay principle that treats members, staff and professionals fairly and can be explained.
- Manager development programme
Supervisor and manager skills for people who learned the work by doing it.
- HR policies and governance
Rules for disputes, conduct and member roles that hold up when a person wears several hats.
Every engagement starts by recording where you stand, and every later report compares against that. We do not promise outcomes. Start with a free conversation, or see the paid HR Diagnostic.
Blogs worth reading first
From the GullyHR blog: one on HR in ngos and social enterprises, and one on each of the topics this page points to.
HR Management
Everyone reports to the founder: when and how to redesign the structure
A flat structure works until the founder becomes the only route to a decision. How to tell when you have passed that point, and how to redesign without a reorganisation.
8 min readRead article
HR Management
Salary bands for SMEs: building grades when you have never had any
Most salary structures grew one negotiation at a time. How to build grades and bands from what you already pay, without repricing everybody at once.
8 min readRead article
HR Process
What should an employee handbook include?
A practical contents list for an employee handbook in a growing Indian business: what to cover, what to leave to policies, and how to keep it usable and current.
5 min readRead articleMore on the GullyHR blog.
Questions owners ask
Agree a written method that separates their earnings as workers from any return as owners, and share it with them. Confirm the legal treatment with a qualified professional.
State the principle openly and test it against your margins each year. A shared understanding with the board prevents ad hoc decisions.
Agree in writing what the board decides and what the management decides, and put routine matters in the monthly report so the board feels informed.
Be clear about the role and the authority from the start, move decisions quickly and offer growth within the enterprise. Ask them what is slowing their work.
Plan fill-in work, build stock or develop products for the slow season, and look at advance and instalment practices. The aim is steadier income for the people involved.
Early on we would ask how members, owners and workers overlap in your enterprise, and how pay differences are explained. We would look at who decides what between the board and management, and how income is smoothed across seasons. A practical first step is separating the member roles and agreeing a pay principle people can accept. Scope is confirmed in writing before any work begins.
More on HR for ngos and social enterprises
All 7 business types in ngos and social enterprises · Find another business type
Livelihood and skilling programmesCommunity development organisationsCo-operative banks and credit societiesChurches and faith-based organisationsGrant-making foundationsHealth and nutrition NGOsOrganisation Design in ngos and social enterprisesCompensation, Payroll and Benefits in ngos and social enterprisesPolicies, Compliance and Governance in ngos and social enterprises
See all HR topics for ngos and social enterprises, or another industry.