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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Third sector faces staffing crisis despite spiralling demand for services

This news post is about 1 year old

Workforce gaps are taking a heavy toll on charity staff

A major new survey of charities has revealed a recruitment crisis across the sector is fuelling fears of staff burnout and leaving serious gaps in service provision at a time of spiralling demand.

The study, conducted by Pro Bono Economics and Nottingham Trent University’s National VCSE Data and Insights Observatory, found that more than half (54%) of charities have vacancies and four in five (83%) of these organisations are finding it difficult to recruit in a bid to meet rising need.

These workforce gaps are taking a heavy toll on charity staff – with one in four (24%) charities citing staff burnout as a cause of retention problems – as well as halting charity services. Among those charities with hard-to-fill vacancies, almost half (46%) have had to pause some operations. Close to half of charities (46%) overall do not expect to meet demand over the next three months.

This recruitment crisis and the ongoing cost of living pressures pose a considerable challenge to the financial resilience of the sector, which is yet to recover from the unprecedented impact of the pandemic. It has left 51% of charities having to resort to using their reserves to meet operating costs, as demand for their services soars.

With inflation and energy prices squeezing the most vulnerable households, the survey found close to eight in 10 (79%) charities have experienced an increase in demand over the last three months. At the same time, more than three-quarters (76%) of charities said income is one of their biggest concerns and a similar proportion (73%) said rising costs were causing financial deterioration.

Recruitment is also one of the top three concerns for large charities – with over four in 10 (43%) saying it is one of their biggest issues as they attempt to meet demand. In response to these workforce challenges, more than half (53%) of charities have hiked salaries and one in five (22%) have increased spending on recruitment.

These workforce gaps are taking a toll on charity staff. The survey found that employees at more than half of charities (52%) that are experiencing recruitment difficulties were working more hours as a result, while 70% of these charities said the workload of their staff had increased due to the recruitment challenges. In total, one in four (24%) charities overall cited staff burnout as a cause of retention problems and this rose to over one in three (34%) for large charities.

The struggle to fill vacancies is also impacting charities’ service provision. Among those with hard-to-fill vacancies, almost half (46%) said they have had to pause some operations, one in five (21%) are struggling to meet quality standards and almost one-third (32%) are unable to meet contractual or project objectives.

Like much of the economy, the tight and competitive labour market is proving challenging for charity sector recruitment. The survey found that over half (55%) of those charities struggling with recruitment cited the cause to be a lack of suitably skilled applicants, while just under half (47%) said there was a lack of people interested in the type of work required and a similar proportion (45%) blamed a low number of applicants generally.

Among its other key findings, the VCSE Sector Barometer, backed by over 50 major social sector membership organisations and networks, found:

  • While nearly eight in 10 (79%) charities reported an increase in demand for charity services over the past three months, over four in 10 (43%) respondents stated that demand for services had increased a lot. In total, over three-quarters (78%) expect demand to grow over the next three months and nearly a third (31%) expect it to grow by a lot.
  • Of the eight in 10 (82%) charities with a paid workforce that have tried to recruit in the past 12 months, seven in 10 (71%) said recruitment has been “difficult” and nearly three in 10 (30%) said it has been “very difficult”.
  • While four in 10 (43%) large charities said recruitment is one of their top three biggest issues, just over one in four (28%) medium charities said the same and less than one in 10 (9%) small charities found the same problem.
  • Retention is a smaller but still important concern – over a quarter (26%) of charities described retention in the last 12 months as difficult, rising to over one in three (36%) for large charities – with poor terms and conditions cited as the biggest challenge to retention.
  • As well as the impact on workforce wellbeing and service provision, recruitment issues are also limiting innovation and organisational development, key drivers of productivity and effectiveness. Due to recruitment challenges, more than half (52%) of charities are delaying the development of new services and nearly a third (29%) are having difficulties introducing new work practices.
  • Competition was identified as a significant factor by those charities struggling to recruit, with just over four in 10 (41%) identifying it as a cause of their recruitment difficulties, while a third (33%) pointed to relatively poor terms and conditions as a barrier to recruitment.

The charity sector in the UK is a significant employer, with a workforce of close to 1 million people. However, the combination of heightened competition in the labour market and a cost of living crisis is especially challenging for the sector.

Recent research by PBE for the Law Family Commission on Civil Society found that charity staff in the UK are paid 7% less per hour on average than workers in other sectors. With evidence that private sector pay growth has been outstripping charity pay growth over the last two years, it is likely that charities are becoming increasingly less competitive in terms of remuneration. 

Matt Whittaker, CEO of Pro Bono Economics, said: “The Chancellor’s Budget this month provided some good news, with an economic outlook that was markedly less pessimistic than previously feared. But too many metrics are still heading in the wrong direction, and our survey findings make it clear that the reality faced by those at the sharp end of society remains extremely challenging.

“Elevated demand for charity support is ramping up further still as the cost of living crisis continues to bite, alongside a doubling down of effort by an already stressed charity workforce. It is an unsustainable balance with very real consequences both now and over the longer term.

“In the here and now, critical need is going unmet across the country and many of those working for charities are coming under considerable personal strain, risking burnout and subsequent time away from work to recover. Not only is this terrible for the workforce’s wellbeing, but it poses considerable challenges for charities given the recruitment crisis identified in our study.

“Further out, we can expect to see those missing out on support today presenting more acute – and more costly – challenges. And, having operated in crisis mode for such a sustained period, many charities risk finding themselves unable to respond with full effectiveness to the new challenges that will emerge over the coming decade.”

Prof Daniel King, Director of the National VCSE Data and Insights Observatory, said: “The charity sector is facing a severe recruitment crisis, leading to staff burnout and serious gaps in service provision at a time of soaring demand. More than half of the charities we surveyed have vacancies, and four in five of those organisations are struggling to recruit.

“The crisis is also causing workforce gaps and stopping services for half of those charities with vacancies. Our survey reveals that close to eight in 10 charities have experienced a rise in demand over the last three months, and 73% of them are facing rising costs.

“This recruitment crisis, coupled with the ongoing cost of living pressures, poses a considerable challenge to the sector's financial resilience.”