Using HR to power affordable change
Every year brings fresh funding challenges for charities as the need to secure donations and deliver more becomes greater. While staff and volunteers are used to working on a shoestring, ever-tighter budgets mean it is only right that investment is funnelled into frontline services, not back office functions.
Donors, whether they are businesses making sizeable payments or members of the public contributing small amounts on an ad hoc basis, rightly want their money to make a difference to the cause. Well aware of their ethical responsibilities, not to mention the precarious nature of funding, charities are under pressure to be transparent about their practices and show how they ultimately deliver value.
Take marketing, for example. Even if some donors are uncomfortable with the idea that they are fundamentally paying for TV advertising, a branding agency’s time or the marketing director’s salary, they also know that this investment helps raise public awareness and therefore additional funding. As long as the activities deliver or exceed expected ROI, they can generally be justified to stakeholders.
HR challenges for charities
While HR perhaps does not face the same level of public scrutiny as marketing, there are still plenty of hurdles to overcome. Charities are, in many ways, no different from private and public sector organisations. HR professionals, and those with HR responsibilities, frequently grapple with the same problems, not least attracting and retaining talent, legal compliance, monitoring sickness absence and managing a diverse workforce in multiple locations.
Then there are the HR problems more commonly associated with charities, as well as public sector and some not-for-profit organisations. Skilled employees may be attracted to charity work because they feel strongly about the cause, even if this means forfeiting the generous pay and bonuses they could receive in a private company. Still, a charity has to offer a fair renumeration and rewards package if it is to avoid the even higher cost of high staff turnover.
Another issue is that the size and scope of the charity’s operations may have grown or changed so much that its current HR system – sometimes little more than a collection of spreadsheets – is no longer fit for purpose. Even if operations are broadly the same, the HR landscape has certainly shifted as a result of new legislation and changing employee expectations.
As well as hampering the HR team’s ability to work as efficiently and productively as possible, there are inherent risks associated with manual data entry and reporting. Double keying data is time consuming, costly and the inevitable time lag in reporting means that board members and stakeholders do not have the most up to date workforce information on which to make decisions.
Recognising the need for change is one thing, implementing it can be another matter. When budgets are extremely tight, the idea of overhauling existing HR systems and introducing new employee engagement initiatives often seems overwhelming, not to mention risky. Justifying spend on major projects, no matter how vital, simply isn’t possible for most charities, which is why I advocate the 1% rule.
The 1% rule
You have probably heard about the theory of marginal gains, which involves breaking down a task or problem and then finding out where you can make incremental or 1% improvements that add up to make a big difference. It comprises three “podiums” as detailed below:
- STRATEGY. Look at what each problem demands and carry out a detailed review of what it would take to succeed.
- PERFORMANCE. Select the best people for your team and look at the gap between where they need to be and where they are now, then put a plan in place to improve performance.
- CONTINUOUS IMPROVEMENT. Rather than striving for impressive wins straightaway, start small and build on your achievements.
Marginal gains and HR
Applying these principles to HR means that you should be left with a clear roadmap for positive change, even when resources are stretched.
It allows charities to roll out new HR policies over time, carefully monitoring their effectiveness and tweaking them if necessary. In other words, it is possible to make real improvements that address even entrenched issues, such as poor employee engagement, without upheaval. No charity wants to alarm its stakeholders, nor plough money into initiatives that fail to gain traction. In contrast, small changes are normally easier to manage, require little or no investment and, importantly, mitigate financial risk.
Starting point
If you have not already done so, the first step is developing a strong HR strategy and then reviewing and updating it on a regular basis. Whatever your goals, any strategy needs to be driven by an “employee first” mindset.
Don’t assume that the job satisfaction which comes from supporting a good cause is enough for the workforce, but instead find out exactly what they need to work to the best of their ability. Staff surveys, regular one-to-ones and anonymous feedback are a good place to start; not only do they open up conversations, the information submitted also helps define a charity’s HR objectives.
It could be that employees want flexible working hours, or the freedom to work from home – policies that do not cost the charity anything yet could vastly improve someone’s quality of life. For those with caring responsibilities in particular, it may reduce stress and incentivise them to stay in their role, rather than be tempted to look elsewhere.
All this underlines the importance of people data in your strategy. Feedback from surveys is one element of this, but so too are sickness absence rates, professional development and skills, and diversity, for example.
What matters most is that this data is accurate, up to date and integrated within a central platform, whether you are reporting to the board or ensuring compliance with relevant legislation.
Something as simple as not having to delve into different spreadsheets, double key data or send multiple emails reduces the number of hours HR spends on admin, allowing those responsible to dedicate more time to tasks that add value. This could include low cost, or free, employee health and wellbeing initiatives such as mindfulness sessions or exercises that alleviate stress and leave employees feeling valued by their employer.
This approach to data management means that HR is able to deliver “one version of the truth” across the charity, so the board is able to accurately compare, say, year-on-year sickness absence or the make-up of its workforce. It is here that HR is able to prove its value to the charity, beyond simply processing holiday requests and back to work forms.
Combining functions
In any organisation, it makes sense to combine back-office functions where possible, as long as everyone is recognised for the unique skills and knowledge they bring. With the right processes in place, HR, finance and payroll can access the same information about salaries and expenses, so there is no disparity in reporting. By sharing data, tasks are not duplicated, so less time is spent on admin.
But collaboration does not have to stop there. HR and marketing, for example, share similar goals in terms of creating a brand that is attractive to both the charity’s supporters and prospective employees.
After all, someone could choose to work for a particular cause, having already raised money or benefited from its services in the past. Working together, the two teams are well placed to ensure their communications – whether it’s a recruitment ad on LinkedIn or stories about the charity’s work – will resonate with the audience.
Collaboration costs nothing, but creating an environment for it to thrive can, over time, transform the effectiveness of the charity.
Next step
The practical reality has been that HR innovations have been capable of being rolled out on limited budgets. The next step is to maximise these budgets even further, so that every penny invested adds further value.
As we have seen, the marginal gains theory allows HR to develop a continuous improvement strategy that effectively engages employees, even if future funding is uncertain. Strong people data is key to creating meaningful policies and supporting decision-making at board level, as is effective collaboration with others. When an HR strategy is executed well, it galvanises the entire workforce without disrupting it or coming at a high cost, and makes sure the charity is able to continue and build on its work.
