- The social sector in India serves an important function in society – helping communities and providing purpose-driven work.
- But as the sector expands, so does the need to know what intrinsic motivations and extrinsic rewards will attract and retain talent.
- A new study on talent management in the Indian social sector aims to address these issues and offer solutions.
The history of volunteering, and its semi-professional and semi-structured talent management practices, make the social sector unique for job seekers. Despite, or perhaps because of this, we don’t think of the social sector (as opposed to IT, communications, etc.) when we hear “talent management” and vice versa.
As the sector grows in size and responsibility (especially post-COVID), we are also witnessing increasing interdisciplinarity and professionalisation of roles in the sector. In the absence of lucrative working conditions and despite non-competitive salaries, what brings and retains employees in the sector? What part of their roles is driven by intrinsic motivation and to what extent do extrinsic rewards boost their motivation to work? How commensurate are the two to each other and is there a way to reconcile these, without one becoming counterproductive to the other?
What draws people to the social sector?
So far, personal, intrinsic motivation (a desire to serve, satisfaction from contributing to a cause, alignment with purpose, meaningfulness of the job, etc) is reported to be the primary reason for people to work in the sector.
A recent study conducted by the Centre for Social Impact and Philanthropy (CSIP), Ashoka University and Indian School of Development Management (ISDM), found an overwhelming number of reasons that pull talent into the Indian social sector. Importantly, it reported that while some of these reasons are altruistic and intrinsic motivation related, many others relate to extrinsic rewards and opportunities for career development.
The study reported external rewards like “learning opportunity and personal growth” as the top cited (86%) and “opportunities for career development” as the third most cited (63%) criterion determining people’s decisions for joining Indian social purpose organizations (SPOs). At the same time, intrinsic motivations like “opportunity to contribute to a larger cause” and “alignment with the vision/purpose of the organization” were the second (72%) and fourth (62%) most cited reasons for accepting roles.
Similar to the reasons for joining their organizations, motivations for continuing in the sector are also reported to be almost equally oriented to intrinsic motivation as well as career development. For instance, “opportunities for learning and development” and “satisfaction from meaningful contribution to a cause” were equally cited (66%) as motivating factors for workers to continue working in the social sector. Interestingly, as people move from “joining” the sector to “continuing” in the sector, career-related motivations like “job security” (15%) and “compensation” (13%) emerge as the least motivating aspects of their jobs, pointing towards the need to strengthen these.
Talent management practices in the Indian social sector.
What makes employees leave?
The nonprofit sector has higher voluntary attrition and turnover rates than other industries. The limited existing knowledge shows that uncompetitive pay and unfair compensation practices, along with a tightening labour market, pose serious challenges to organizations in retaining talent. The above-mentioned CSIP-ISDM study (covering 10,251 social sector personnel) proved that compensation paid in the Indian social sector is 58% lower (total cost to company) than in the for-profit sector.
Further, it added that while almost all personnel (96%) reported being aligned with the mission and vision of their organizations and taking pride in their work, more than half displayed discontent with the compensation offered to them. It is not surprising that this study, like previous evidence, indicated that unsatisfactory compensation and pay perks are the most common reasons for high voluntary attrition in the sector. Other reported reasons for voluntary attrition included burnout at work, talent aspirations, and better work opportunities.
While the talent pool is widening for the social sector due to an increased appreciation of for-profit values and skills, the gap in for-profit and non-profit salaries, along with unsatisfying career development opportunities, threatens a possible and easy transfer of talent from the social sector to for-profit organizations.
Is intrinsic motivation becoming counterproductive to social sector talent?
Most formal, as well as informal discourses, on social sector careers centre around how to retain and increase workers’ intrinsic motivation to “serve”, with an almost absolute acceptance of the limitation posed by poor salaries amidst and despite challenging working conditions. Such an absolutist and essentializing approach to poor compensation in the sector assumes that motivation and compensation are two unrelated factors.
Undermining the significance of extrinsic rewards, the social sector only confirms the elitist, classist understanding of social work and adds to the continued devaluation of work of the traditionally underpaid groups that form the dominant part (especially entry-level) of the social sector. As women and other disadvantaged castes, religious, racial and tribal groups work towards protecting the rights of their own communities, the low/no wages function towards not only the devaluation of their work but also the devaluation of the social sector work. It is no surprise then that “intrinsic motivation” may be causing a compressed wage structure in the sector.
How to balance intrinsic motivation and extrinsic rewards for talent attraction and retention in the sector
There is no sure way to know what an individual finds most motivating to continue their engagement in an organization. Each new and existing employee has unique expectations from their organization. Unless a bouquet of opportunities for boosting intrinsic motivation and providing extrinsic rewards is provided for talent to choose a combination from, organizations will always be looking at a high turnover rate.
Building on the drivers of motivation as highlighted in the CSIP-ISDM study, I argue for considering the following to realise a well-thought-out compensation policy that aligns intrinsic and extrinsic factors to attract and retain competent employees.
- Benchmarking of compensation and other pay perks: The first step towards achieving competitive and sustainable pay programmes can be figuring out what the peers and possible competitors pay to their employees across similar levels. Intra-sector and peer-group comparisons of compensation and benefits provide an informed starting point for addressing the lack of pay parity in the sector. While formal, research-based benchmarking might not be affordable to most organizations, informal convening/discussion-based benchmarking can be of use too.
- Communicate salary costs to funders: With a greater number of funders investing in institutional costs, now is the best time for organizations to communicate how better salaries to existing employees can not only ensure worker commitment but also counter the lost productivity, and recruitment and induction costs needed for new employees.
- Greater investment in learning and development (L&D) opportunities and wellness initiatives at work: L&D opportunities overcome the low compensation barrier to some extent. As employees value opportunities for learning and career growth while joining the sector, specialised training at work can attract and retain workers by addressing their aspirations. Sector workers also value well-being initiatives for work-life balance like flexible work hours, childcare and provisions for different kinds of leaves (hospitalisation leave, emergency leave etc.).
- Clear growth trajectory: Having a talent management policy with a clear growth trajectory is appreciated by talent and if combined with relevant L&D options, the organizations can compensate for low salaries to some extent and help talent’s aspirations. Advancement opportunities, performance-linked benefits and periodic opportunities for acknowledgement and awards should be weaved into the employee growth plan of the organizations.
- Positive organization culture: A positive organization culture is considered important for continued engagement and retention in SPOs by 60% of respondents in the motivation survey conducted as part of the CSIP-ISDM study. Working with scant funds, organizations can still nurture a warm and close-knit team environment where employees feel comfortable sharing their own interests and opinions.
Unless social sector leaders make concerted efforts to leverage and boost intrinsic motivation of employees by ensuring attractive extrinsic rewards, the talent – with their transferable skills and ethics – may find themselves motivated to move to other sectors. And, that is going to be costly not only within the sector but the society.
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The views expressed in this article are those of the author alone and not the World Economic Forum.