Why salary secrecy is both a symptom and cause of issues within the third sector
With charities and partners increasingly held to account by campaigners tackling discrimination and a lack of diversity in the third sector, pulling back the curtain on outmoded practices reveals attitudes which are as much a symptom of deeply rooted issues as they are a cause.
Say it quietly, but there’s a revolution underway. Thanks to tenacious organisers, bold campaigners and a widespread willingness to improve the charity landscape, there’s an increasing awareness of structural inequality within a sector which should be responsible for challenging and ultimately dismantling those very same barriers.
As the recent NCVO report so plainly highlighted, there is still much to be done, something made all the more clear as charity professionals from across the sector share their own #NotJustNCVO stories of discrimination and bullying being met with a lack of support or acknowledgement from those in positions of power.
It’s the reason it’s really no surprise to see grassroots campaigns like Show The Salary campaign steadily gain momentum and attract praise for their efforts to change recruitment practices and encourage diversity in the sector. As they have well documented, organisations and recruiters who withhold salary information from job descriptions are helping to perpetuate bias against women, people of colour and others who statistically are under-represented, especially in senior roles, and regularly paid less than their white male counterparts.
It’s a movement which tallies with others such as Charity So White, which have sought to challenge institutional racism within a sector which has frequently been exposed as too self-assured, complacent and dismissive around issues such as race and gender inequality within its own ranks.
These efforts should rightfully be celebrated and applauded. However, as a sector in the middle of a crisis of confidence brought on by years of charity scandals and, more recently, the coronavirus pandemic, we now have an opportunity to pull back the curtain even further. Only by doing so can we find and address the reasons and motivations behind practices like salary secrecy which lead to people being underpaid, marginalised and poorly represented within their places of work.
Easy targets
Let’s start with recruitment agencies. As commercial companies seeking to profit from the not-for-profit sector, they are arguable an easy target. Yet for any enterprise working within or alongside the sector, reputation is key to success. It would seem counterintuitive for these companies to operate in a way that would potentially harm their reputation and alienate many of their potential market. It’s why the number of agencies making the Show The Salary pledge is steadily growing.
Yet there’s more to this picture than is first apparent. The typical business model used by recruiters is based on a percentage of the salary of successful candidate placement. In other words, the higher the salary they secure for their candidate, the better business they do. Given salary secrecy has the effect of inviting the possibility of lower salaries for placements, why would recruitment agencies continue to use an approach which (on the face of it) doesn’t make much commercial sense?
As is often the case, one simply needs to follow the money to solve the mystery. In this case, the answer lies in the fact that recruiters’ main customers are not in fact candidates, but the charities they recruit on behalf of. With this understanding, though if taken on a case-by-case basis of job placements a recruiter may take a hit on their commission income, by keeping their charity customers happy they secure ongoing business worth more in the long run than squeezing an extra few quid from a placement in the short term.
If we accept that as the ‘messengers’ of their customers recruiters are simply aiming to please charities, it begs the question: What’s in it for charities? The obvious answer (follow the money) is they stand to save money by potentially paying their new employees less. But are charities really willing to perpetuate inequality in the name of saving a bit of money on salaries?
The ‘Corecrux’ of the problem
This brings us to the crux of the problem, and an answer which is sadly one all-too-familiar to anyone with even a fleeting involvement in the charity sector. Like the symbolic objects in Harry Potter, the concept of ‘core costs’ is the horcrux of the charity world; giving immortality to the expectation that charities should only spend money on direct ‘charitable activities’ with overheads kept to an absolute minimum. Needless to say, it’s an expectation which is increasingly outdated.
Although there is no universally agreed definition of exactly what constitutes a core cost, the term typically refers to a charity’s fixed outgoings, such as rent and utilities. However, it’s increasingly been conflated with any staff costs which do not have direct or tangible charitable outputs, such as marketing, fundraising or a CEO’s salary. Regardless of the exact core cost criteria, for far too long these have been the much-maligned aspect of a charity’s operations.
This is in part due to public opinion. It’s undeniable there exists a long-held pressure of expectation from the public, often fuelled by sensationalist press coverage naming and shaming organisations and those who work for them. This in turn creates a fear of comparing unfavourably to other organisations of a similar size or operating in the same space. Ultimately, when relying on public and private support, charities don’t just trade on their reputation — their existence depends on it. No charity wants to find itself on the wrong side of the debate.
But all this misses the point entirely. There are very few (if any) ‘core costs’ which aren’t in some way linked to charitable activities. Charities, like any other type of organisation, are complex and multi-faceted operations relying on a broad range of activities to survive, grow and continue to deliver their often vital services. Of course, it’s a given there will likely always be some cost savings to be made somewhere, but every aspect of a charity’s operations normally exists for a reason.
So, while we should absolutely be doing our collective and individual best to combat practices like salary secrecy, it should be seen as just one battle in the wider war for the identity of the sector and its right to operate without unrealistic expectations of financial accountability thrust upon it.
The imminent exit of Baroness Stowell from her role atop the Charity Commission provides a perfect opportunity for the incoming chair to make a stand and begin rebuilding dwindling trust in the sector by redressing the narrative around these contentious costs. If they do not, and until we begin to see the wider discourse around core costs and charity finances change, we’ll continue to see practises like salary secrecy undermine the sector’s efforts to address a lack of diversity — all in the name of keeping costs down. Exactly where responsibility for this evolution lies is open to debate, but to echo the sentiments of the Show The Salary campaign, one thing is for sure: It’s time for change.
