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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 · Social enterprises and cooperatives
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.
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Share your requirementsA 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.
- Plan
- Hire
- Onboard
- Manage
- Develop
- Perform
- Engage
- Retain
- Exit
- Improve
When HR is weak in social enterprises and cooperatives, you may see
- Members are also owners, suppliers and workers
- Mission and margin pull against each other
- Management skills are thin
- Board and management roles blur
- Pay differences cause resentment
- Seasonal and order-based work
- Professionals leave for conventional firms
These are the places the people side of this kind of business tends to give way. The rest of this page works through them.
Who does the work in social enterprises and cooperatives
HR here has to work for each of these groups, not only the office. The set-up below is written with all of them in mind.
- 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.
HR topics for social enterprises and cooperatives
Start with the topics that matter most here: Organisation Design; Compensation, Payroll and Benefits; Policies, Compliance and Governance. Then work through the rest. Each topic is written for ngos and social enterprises, not in general.
Organisation Design
Structure, reporting lines and who is allowed to decide what.
Compensation, Payroll and Benefits
Salary structure, payroll inputs and a month that closes on time.
Policies, Compliance and Governance
Policies a manager can apply, and obligations with owners and dates.
HR Strategy and Workforce Planning
How many people, in which roles, by when — and what they will cost.
Recruitment and Talent Acquisition
Requisition to joining, the same way every time.
Onboarding and Probation
A first day that is the same for the fifth joiner as the first.
Employee Administration
Records, attendance, leave and the day-to-day HR that must simply work.
Performance Management
Goals, reviews and ratings that hold up in a conversation.
Learning and Development
Training planned from need rather than from the calendar.
Career and Succession Management
Named backups for the roles that cannot be vacant.
Employee Engagement and Experience
Communication, recognition and the conditions people actually work in.
Employee Relations
Two routes — one for complaints, one for conduct — kept separate.
Health, Safety and Wellbeing
Induction, records, incident reporting and follow-through.
Retention and Attrition Management
Who leaves, when, why — and which of them mattered.
Exit and Alumni Management
Resignation to relieving letter, in a defined order.
HR Technology and Automation
Records that survive people, and approvals that do not queue.
HR Analytics and Management Reporting
A short monthly pack management actually reads.
HR Operations and Governance
An HR function that runs the same way every month.
What a working HR set-up looks like
The pieces a social enterprises and cooperatives business puts in place, in an order that makes each easier. Open any card for the detail.
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.
What this coversHide
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.
What this coversHideA 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.
Agree the pay principle
A written logic for how fair pay, market pay and member earnings are set, shared with the board and staff.
What this coversHide
Agree the pay principle
A written logic for how fair pay, market pay and member earnings are set, shared with the board and staff.
What this coversHideA 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.
Define who decides what
A simple chart of board and management responsibilities, including hiring, pay and day-to-day operations.
What this coversHide
Define who decides what
A simple chart of board and management responsibilities, including hiring, pay and day-to-day operations.
What this coversHideA simple chart of board and management responsibilities, including hiring, pay and day-to-day operations. The organisation design work covers it.
Strengthen management capacity
Training for supervisors and managers on planning, quality and handling people.
What this coversHide
Strengthen management capacity
Training for supervisors and managers on planning, quality and handling people.
What this coversHideTraining for supervisors and managers on planning, quality and handling people. The leadership and manager development programme supports it.
Smooth income through the year
Planned work for lean seasons, such as stock building, training or new products, so earnings are steadier.
What this coversHide
Smooth income through the year
Planned work for lean seasons, such as stock building, training or new products, so earnings are steadier.
What this coversHidePlanned work for lean seasons, such as stock building, training or new products, so earnings are steadier. The workforce planning work helps.
Start by checking where you stand
Before changing anything, find out what is true today. These checks take an afternoon and tell you which of the topics above to start with.
Share your requirements- 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.
How GullyHR helps
The services below fit this kind of business best. Each starts by recording where you stand, and every later report compares against that. We do not promise outcomes.
- 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.
Start with a free conversation, or see the paid HR Diagnostic.
Our HR transformation approach
- 1
Assess
Understand the business, its workforce, current processes and HR challenges.
- 2
Identify gaps
Find the missing, weak, inconsistent or person-dependent processes.
- 3
Design
Create the structure, processes, policies, SOPs, dashboards and systems needed.
- 4
Implement
Help HR and department managers actually adopt the new system.
- 5
Automate
Digitise repetitive and approval-based workflows where it is worth doing.
- 6
Measure
Track hiring, attendance, employee cost, performance, training and attrition.
- 7
Improve
Strengthen the people-management system continuously, not once.
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.