Additional engagement among staff at non-profits is the equivalent of a £22,000 per year pay rise
Working in a non-profit organisation is so satisfying it is the equivalent of a salary increase of £22,000 per year, according to new academic research.
A study of British employees by Bard College Berlin professor of economics Martin Binder found that those working in the third sector – including charities and other NGOs – are significantly happier than their counterparts in the private sector.
Binder said the findings could be explained by an increased enjoyment of day-to-day activities, and a feeling of usefulness.
“For Great Britain’s third sector, workers in non-profit organisations are much more satisfied than their peers in private firms with the work they are doing, the hours worked and job security,” said Binder’s report.
“They are not significantly more satisfied with their pay or promotion prospects but – given that they earn less on average – it is interesting to note that they are not less satisfied with their pay.”
Data taken from the British Household Panel Survey showed a significant positive impact on life satisfaction from working in a non-profit body, according to Binder.
“It could be shown that this effect is quite similar across the subjective wellbeing distribution, and exists also for those who are already happy,” the study said. “Shadow prices peg this effect at around £22,000 per annum, four-fifths of the average amount of equivalent income in the sample analysed, which was roughly £27,000.”
Peter Reeve, head of HR at the Motor Neurone Disease Association and chair of the Charities HR Network, agreed that levels of employee engagement were generally higher in the third sector, which could be attributed in part to a greater connection to a broader mission.
“People know what they are here to do, and they understand the strategy and vision,” he said.
However, Reeve said it was wrong to assume this meant charities didn’t face HR or engagement challenges. “The issue is that people join a cause and they get a job,” said Reeve. “It turns out to be a nine-to-five with irritating computer systems.
“I’ve heard the employee relationship in the third sector described as love-love-sack. Everyone tries to love each other; no one wants to give difficult feedback. When it goes wrong, it goes horribly wrong.”
Another issue for non-profit organisations came from staff thinking they could ‘wind down’ from a hectic career by joining the third sector, warned Reeve.
“The worst thing I get is people saying they had a really good career in the private sector and now they are thinking about the third sector,” he said. “This is not paid volunteering – we need you to work.”
However, the private sector could learn from elements of people management in the third sector, he added: “We are very good at keeping people engaged, offering flexible working and giving opportunities for development.”