We’ve been reviewing the top risks in charities for 11 years now, and it’ll be no surprise that year on year income reduction and uncertainty top the pile. The advice in response here is always to review income streams and diversify if possible. A familiar mantra – one that’s easy to say, but in reality difficult to achieve as often the right business practices, time and skills are needed to see it through.
There are plenty of indications that charities have been trying to put themselves on a more sustainable financial footing by looking more closely at their business practices, partly a consequence of tighter budgets and partly a result of growing professionalism. For example, procurement is improving according to our latest iteration of our PKF/CFG survey Managing Risk: Making the most out of your resources. Over 80% use tenders and forecasts, and many are assessing support costs and property needs. Charities are looking not only at inputs and outputs, but also at the assets on which an organisation sits, and how it maximises them for the future. To do this effectively however, charities need skills, and responses to the survey indicate that a skills shortfall is holding many back.
The four top concerns about staffing were: retention of good staff (55%); attracting the best staff (49%); motivation levels (38%); and new skills and competences (32%) – mirroring the findings of our salary survey earlier this year.
Retention of staff is closely correlated with motivation levels. But staff motivations are likely to be complex and offering financial incentive isn’t always an option or seen to be the right fit for the sector. According to the survey half rely on thanking their staff as the key incentive, 18% of respondents are not sure what incentives to provide. Given the range of skills needed, attracting and retaining those with the right talents, is key.
While no doubt many are already seeking to up-skill existing human resource, the survey indicates that improvements to performance management systems could have a significant impact here:
- Less than one third had carried out skills audits in significant areas to identify the gap between skills required and those present within the organisation;
- Around a quarter surveyed report not being given objectives or targets, making it difficult to meaningfully assess performance;
- Almost half of managers and 40% of other staff do not have personal development plans. In such circumstances skills gaps are more likely to remain and may have an observable demotivating effect.
- Only a quarter of charities assess the capability needs for volunteer roles, only 10% have development plans for volunteers, and less than a third set objectives.
Overall, when it comes to the range of options that charities have for trying to make the most of what they have, be it people, investments, or other assets (including a brand), there simply is not enough time in the day to do everything. 77% of charities identified ‘time’ as a risk factor for staff performance and this demonstrates that individual charities have to be selective and take risks on an area of strategic focus. At the same time, without the people to do the job, it will be difficult for charities to move forward.