Opinion: Small pay rises to fuel another exodus of staff

Here's something cheery to dispel the November gloom: the annual voluntary sector salaries survey, published by Remuneration Economics and the NCVO, shows a marked improvement in staff retention.

Charity staff have long been patted on the head and told what an asset they are, but every year they quit their jobs in droves. This year's 10.5 per cent turnover rate is driven by the 7.3 per cent of staff who resigned. Losses through redundancy and retirement are relatively marginal.

Yet the exodus this year was noticeably smaller than in 2003 when turnover rates hit 13.5 per cent, with resignations at 9.9 per cent - nearly one in 10 of the workforce. Hooray!

But a closer look shows the retention figures could prove meaningless.

Why? Because poor pay is cited as the biggest issue behind staff turnover, just ahead of lack of career opportunities.

This year's improvement in charities' ability to keep their staff follows a substantial rise in earnings in 2003 - up 6.3 per cent, a healthy increase compared with a 3.1 per cent rise in the retail price index and, importantly, well ahead of the 3.2 per cent rise in the Average Earnings Index, which covers all sectors. Although the voluntary sector has historically paid less well than the public and private sectors, it seemed to be catching up. And more staff stayed where they were.

Now there's a lesson in that. But it hasn't been learned. This year, voluntary sector earnings went up 4.2 per cent, safely above inflation, but less than the 4.5 per cent growth in earnings across all sectors, never mind the 5.8 per cent public sector rise. The survey notes: "This is the first time for several years that the voluntary sector's average earnings have increased at a slower place than the AEI."

So what happens next year? Will charity chiefs once more wring their hands as their staff drain away, the retention drive wrecked as the pay roller-coaster heads downhill again? It's a crazy way to carry on - retention that only lasts a year isn't worth much.

But low pay generally - and falling rates, relative to the public and private sectors - makes it hard for voluntary sector staff to stay, however committed they are. Increasing unionisation may also lead to staff putting their collective foot down. This is worth a thought in next year's pay round. If charities want sustainable staffing, they will have to pay up.

Tash Shifrin is a freelance journalist

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