CharityJob Research Quarterly Overview Autumn 2021

Introduction

Welcome to the CharityJob Research Quarterly Overview for autumn 2021. This roundup covers data on the economy, jobs, and pay which show the importance of looking beyond headline figures. It should provide some insights into the context in which charities are operating and seeking to recruit.

Our own data echo findings from the ONS that current vacancy levels are ahead of where they were before the pandemic struck. As a result, recruitment remains challenging for many charities, and they are struggling to fill vacancies. Our research shows how the pandemic has impacted charity recruitment, with average applications per job down from over 100 in summer 2020 to 24 in July 2021. There are conflicting reports as to whether employees are reluctant to move due to the current uncertainty or are actively looking in large numbers. It may be that they are looking, but not applying.

The ‘net employment balance’ (the difference between how many employers expect to increase and decrease their paid workforce) is at the highest level on record. Nearly seven in ten of all employers surveyed said they were looking to recruit. This means that anyone looking for a new job has many options.

There is pent up demand to move jobs, much of it due to a backlog caused by the pandemic, when three in four workers saw their usual job opportunities reduced by a third. As a result, the labour market has been described as a “seller’s market” for those looking for a job.

Economy

The UK economy remains below its pre-pandemic level. The weakness of the recovery has been partly attributed to staff shortages in certain sectors. GDP grew by nearly 5% between April and June, 22% above the same time the year before, but from a low base. Overall, the economy has undergone a ‘V-shaped’ recovery, but one which has not been equally distributed

Jobs data

Labour and skills shortages

Jobs in general, and staff shortages in particular, were the story of summer 2021. Employers are struggling with the worst labour shortage since 1997, so if you are having difficulties finding new staff you aren’t alone. I recently explored some of the reasons behind the shortage in the sector and what charities can do to improve their chances of successfully recruiting.

The labour market is recovering strongly. Employment is up, vacancies are up, and unemployment is down. But inactivity is also up, largely due to more young people staying in education and an overall increase in illness and caring responsibilities. As a result, labour shortages look set to continue.

The number of employees on payrolls is back to pre-pandemic levels, but there are over one million current vacancies for the first time. Between April and June more people started a new job than during any other quarter on recordtwo million people, 1.2 million of whom were previously out of work.

Despite the large number of vacancies, the number of candidates to apply to them has fallen by the greatest amount on record. The supply of potential labour is lower because the rate of economic inactivity is high. For some, that is older workers taking retirement. For others that is choosing to enter or stay in education rather than getting a job, while more than two million are off work due to ill-health.

The good news is that unemployment should now have peaked. Indeed, employers (not just in the charity sector) expanded their workforces at the fastest pace in seven years. But despite this, many still struggled to meet their demands. Across all sectors, nearly 9 in 10 recruiters say staff shortages are their top concern, with skills shortages second, a worry for 2 in 3. The third main worry was retaining staff.

Perhaps relatedly, expected redundancies were at their lowest for over six years. The numbers actually being made redundant spiked in autumn 2020, and are now back to below pre-pandemic levels.

A mismatch remains between vacancies and the skills and experiences of available workers. The Spectator has written a piece about the labour shortages. It quotes former Bank of England chief economist, Andy Haldane, saying that between ten and fifteen million people do not have the right skills for the jobs on offer.

A speech by deputy governor of the Bank of England, Ben Broadbent, covered the ‘mismatches’ in the labour market. Measures of mismatch rose during the pandemic and remain high. In part this is because many people are currently reluctant to move jobs unless forced, so those who are looking may be lower skilled or forced out of their previous job and less able to find suitable new opportunities.

The Great Resignation?

Speculation abounds that the return to relative certainty may soon result in a ‘Great Resignation’ which risks a post-pandemic brain drain. As many as a third of employees might be looking to change jobs once things settle down. The number of workers in other countries looking to work in the United Kingdom is rising, but remains well below pre-pandemic levels. As such the pool of potential employees may soon grow, perhaps dramatically, but not yet.

Employers’ desire to hire new staff is at near-record levels, leading to talk of a ‘hiring spree’. The Recruitment and Employment Confederation has said, “With demand for staff remaining high, the current labour shortages look set to continue for some time.” While the labour market is currently challenging for those seeking to recruit, newfound focus on the importance of having a purpose at work should mean charities are better placed than other sectors.

Vacancies

Vacancies in the UK are booming. Between June and August 2021, the number of vacancies was the highest ever recorded. Summer 2021 saw it go above one million for the first time ever, a quarter of a million above pre-pandemic levels.

Online vacancy levels are greater than February 2020 levels in most sectors. However, there is significant variation by sector—the hospitality sector is twice as likely to be struggling to fill vacancies as others. This is partly because the boom in vacancies is primarily among low-paid positions.

Vacancies for the charity sector since the start of July 2021 are less than 5% above February 2020 levels. The chart below shows the online vacancies as an index with February 2020 as 100.

Source: ONS

Pay data

Across the whole economy, the recovery in jobs has resulted in some wage inflation, though not in all jobs or all sectors. The Bank of England advises looking beyond the headlines because pay growth is recovering from a low base. It estimates pay grew by about 2.75% during the pandemic.

The latest NIESR Wage Tracker shows that the labour market is recovering. Salaries are ‘increasing fast’, but the upward pressure on wages is likely to be mitigated by the end of the furlough scheme. Average weekly earnings growth has slowed slightly but remains above 8%. However, this is because of the dramatic changes in 2020.

Adjusting for this, average weekly earnings grew at 4% in the three months to July. Wage growth is much higher in the private sector than in the public sector (including charities). The Spectator has written on the implications of the staff shortages and wage rises in a context of pay having stagnated in low-paid jobs but grown in better paid ones.

The end of furlough is likely to dampen wage growth, but a mismatch between available skills and those needed for jobs is likely to result in upward pressure. There is also the issue of inflation bringing pressure to increase wages. Given that vacancies have not dramatically increased in the charity sector it is likely that demand for higher wages from shortages may be limited, but that issues around inflation and the cost of living will remain.

Charity sector

Impact of Covid-19 and changes to workforce

The chief executive of the Charity Commission fears that, despite the challenges of the past two years, the most difficult times may still be ahead.

The NCVO have published two recent editions of their Covid-19 voluntary sector impact barometer. The September edition focuses on the ways in which the pandemic has impacted charities and how they survived. In this latest survey:

  • 22% reported their financial position got worse in the last month
  • 23% said their financial position improved.
  • 21% increased their paid workforce in the last month
  • 24% expect to increase their paid workforce over the next month.

NCVO have also published the latest edition of their Almanac. It shows that the paid workforce in the sector grew by 20% since 2010. The sector’s workforce is nearly 70% female and is older, on average, than the private sector. The numbers of those aged above 50 or who are disabled has increased, but the proportion of employees from an ethnic minority is low and has not changed significantly in recent years.

Research from the Charity Finance Group shows more than one in three charities are optimistic about their prospects. This is despite increased demand for their services and staff shortages. Overall, charities were, slightly, more likely to have increased their spending in the April to June period compared with January to March. For almost three in ten part of this expenditure was on payroll costs.

Almost a quarter of charities reported that they were using the furlough scheme. Fewer than one in ten charities expect the end of the furlough scheme to result in job losses, and only five percent expect it to have a negative impact on service delivery.

In terms of funding, the Charities Aid Foundation has distributed almost £1 billion last year, after donations rose 43% (£300 million). Further good news is that many charities did not suffer the scale of losses they expected during the pandemic.

Some large charities have, however, been badly hit. The National Trust lost over £170 million due to the pandemic and was forced to make nearly 1,800 people redundant in an attempt to cover its losses. This was despite placing up to 81% of its staff on furlough. Recent figures are more encouraging, with online donations up 383% and sales through its online shop up 65%. The British Heart Foundation experienced a 40% fall in income due to the pandemic, as shops were forced to close. Overall, the amount of money charities took in via text donations is up by 64%, indicating the ways that the sector accesses donations may be changing.

The Charity Commission has published guidance for the charity sector relating to the pandemic, including government support and managing financial difficulties.

Think NPC are running a series on the charity sector called Rethink, Rebuild to address how the sector can recover from the pandemic.

Recruitment

Many more charities are looking to recruit than not. The ‘net employment balance’ for the sector is +30, slightly below the private sector and slightly above the public sector. It is the highest level in CIPD’s records since 2014. Nearly three in four charities surveyed (72%) are looking to recruit, while just 15% are looking to make redundancies, though this figure is higher than in the public or private sectors. Forty four percent of charity respondents have hard-to-fill vacancies, the fourth worst-hit sector behind catering, healthcare, and manufacturing.

Support for charities

In positive news for the sector, the number of active supporters of charities has risen over the last year. Those giving to charitable causes and undertaking formal volunteering has decreased in the last year, but informal volunteering has grown at an unprecedented rate.

More than a third cite personal financial issues as being behind their decreased giving. This may explain why just 57% of the public have given to charity in the last three months, the lowest figure on record.

Flexible working and pay

The RSPCA is among the charities to be moving towards hybrid working, selling its head office in favour of smaller premises as part of the move. Recent research showed that nine out of 10 charity workers wanted flexible working to continue long-term after Covid-19, and 43% said that they would never apply for a job that was entirely office-based. However, around 70% said that working from home involved longer hours and undermined the distinction between their private and professional lives.

The Living Wage Foundation has published new research into the levels of low pay in the sector. They estimate that, overall, 17% of charity sector workers are paid below the Living Wage. The pay gap between male and female charity chief executive officers fell from 12.1% but remains at 7.6%. However, the improvement is due to more men leading smaller charities, which pay less.

The future of work

Data from the ONS show how where people work is changing. More than one in three working adults did some work from home in 2020 (37%), up from a quarter (27%) in 2019. Job adverts with some reference to ‘home working’ increased at a greater rate than adverts overall, indicating that the UK is moving towards more remote working. Nearly nine in ten adults then working from home (85%) wanted a hybrid approach in the future. Most people expect not to return to the office full-time and 70% believe the days of working in an office every day to be over.

Some employers, including many charities, are looking at a four-day working week. YWCA Scotland is one. Another is Advice Direct Scotland which already works a four-day week, with no loss of pay, and is urging others to do so too. But, overall, 80% of employees would be against a shorter week if it meant lower pay.

A recent McKinsey report highlights how the pandemic has created an opportunity to ‘reimagine how we work’. McKinsey have also written about the ‘Great Attrition’ or ‘Great Attraction’, and how little employers know about why their staff are looking to leave. The piece highlights the importance of purpose at work as well as feeling valued.

The chief executive of the National Survival User Network, Akiko Hart, discussed their experience of full remote working in depth, including some less obvious issues, such as trying to get insurance.

Research from the US indicates that four in ten there would quit their jobs if denied at least some remote working. This could well be because many feel they are more productive at home. More than two in five workers (43%) reported that flexible hours allowed them to be more productive, especially as they report being productive three quarters of the time they are at home, but less than two thirds of the time they are in the office.

report published by Leesman, shows that 83% of employees believe their home environment allows them to work productively, compared with 64% who believe the same of their office. Remote working also allows parents to be better employees.

ACAS have published new guidance on hybrid working, which may be of use to charities.

Equality, Diversity & Inclusion

The Charity HR Network has worked with Agenda Consulting to examine Equality, Diversity, and Inclusion in the sector. Respondents were asked about their perception of fair treatment, with the highest level of negativity relating to age.

The July edition of NCVO’s Covid-19 voluntary sector impact barometer states that nearly eight in ten charities have drafted plans to address Equality, Diversity and Inclusion (EDI) in their workplaces, and nearly six in ten have revised their EDI approach since March 2020.

Many charities are open to some form of flexible working. But new research shows that they must be specific about what they mean or risk putting off candidates.

Research from the Trades Union Congress highlights different access to flexible and remote working, with those with better paid jobs more able to enjoy the benefits.

A partnership between the National Lottery and the Ubele Initiative is looking to invest fifty million pounds in black and ethnic minority charities over the next five years.

TPP recruitment published a case study about how they helped one charity to recruit while prioritising equality, diversity, and inclusion.

Research from the BBC has found that more than half of women thought remote working would allow them to progress in their careers when they could not otherwise due to caring responsibilities.

Conclusion

The last quarter has been dominated by staff shortages. Vacancy levels in the charity sector are lower than other sectors, but many charities are looking to recruit and facing difficulties filling their positions. Encouragingly, however, both donations and informal volunteer numbers appear to be up, which implies public support for the work of the sector.

Further reading

Relevant research and publications

CharityJob

The State of Charity Recruitment

Research exploring how charity recruitment has changed since the start of 2020.

NFP Synergy

Why survey (charity) staff? A brief review of research on employee surveys

Report on the benefits of employee and volunteer engagement through regular surveys.

Thomas International Ltd

Mind the Trust Gap

Research on hiring gives some insight into challenges in recruitment and why, highlighting difficulties deciding between candidates and how often hiring relies on gut instinct.

Paul Dolan, Christian Krekel, Ganga Shreedhar, Helen Lee, Claire Marshall, Allison Smith

Happy to Help: The Welfare Effects of a Nationwide Micro-Volunteering Programme

Discussion paper on the wellbeing benefits from volunteering for England’s National Health Service (NHS) Volunteer Responders programme

Sugat Chaturvedi, Kanika Mahajan, Zahra Siddique

Words Matter: Gender, Jobs and Applicant Behaviour

Research paper on the impact of gendered language on applications by gender.

Doris Weichselbaumer, Julia Schuster

The Effect of Photos and a Local-Sounding Name on Discrimination against Ethnic Minorities in Austria

Article which examines discrimination in recruitment and ways to reduce it.

The Government Equalities Office and The Behavioural Insights Team

Increasing applications from women through targeted referrals

Report which highlights how to increase diversity of applications.

Tags: charity job, charity sector, charity sector recruitment, equality diversity and inclusion, quarterly overview, research

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Martin Rogers