Monday
May 16
2011

Abhishek Bhati

NexThought Monday: 8 HR Innovation Strategies to Sustain, Grow Social Enterprises

Editor’s note: Abhishek Bhati and Mathew J. Manimala of the Indian Institute of Management Bangalore are the authors are the authors of the article Talent Acquisition and Retention in Social Enterprises: Innovations in HR Strategies. The full working paper may be downloaded here.

There is no doubt that the world is currently experiencing major social, environmental and ethical crises, and no institution in the government, civil society or private sector, can alone effectively deal with crises of such magnitude. It is essential for all the stakeholders of the society to come together and deal with the growing concerns of the world. Over the years there is a huge rise in the number of social enterprises – both the ’for-profit’ and the ’not-for-profit’ varieties – which aim at serving the poor and disadvantaged groups through revenues generated from commercial activities. The major challenge faced by social enterprises is to stick steadfastly to their social mission while pursuing commercial activities and the revenues generated by them.

It is common knowledge that social enterprises perennially struggle with various critical human resource issues such as getting employees at low rates of compensation, providing growth opportunities for employees within the organization, retaining talent especially in the middle management, providing clearly defined roles and tasks to employees, etc. All of these factors lead to high attrition and increase the cost of acquiring and training new employees. It thus becomes critical for social enterprises to think out-of-the-box and try a variety of innovative strategies to overcome these problems. Some social enterprises are adopting innovative HR strategies to attract and retain talent.

In the article, we identified eight strategies adopted by a few social enterprises to effectively manage and retain their talents, namely:

1. Offering jobs to people with vision and value congruence. In the case of organizations that work with sensitive issues of HIV, child abuse, disabilities, women’s empowerment where the employees are most treated unfair and have a strong urge to bring about a change in the life of the beneficiaries.

2. Enhancing the credibility of the organization through brand building. It is not difficult for large and reputed social enterprises to retain their employees since these organizations have a brand name. Employees feel a sense of pride and recognition by associating themselves with such organizations. These are mostly international social enterprises or large social enterprises, for whom the acquisition and retention of talent is apparently not a problem. (See Aravind Eye Hospital).

3. Providing opportunities for personal growth. To attract and retain talented employees some social enterprises create opportunities for their employees to participate in conferences, workshops and sponsorships for higher studies in international universities within and outside the organization to further employee development for effective performance on the job as well for career growth.

4. Creating a sense of ownership among employees through participation in decision making, Some organizations cultivate a sense of ownership in their employees in various other ways, such as giving them freedom to choose a specific project or issue, permitting flexible timings of work, inviting them to participate in decision-making, providing support to employees to start new ventures under the umbrella of the parent organization, and encouraging employees to work in other organizations and get more hands-on experience for develop new skills, which they could utilize in their subsequent work.

5. Creating entrepreneurial opportunities within the organization. An innovative practice of some social enterprises for retaining their employees is to create career or entrepreneurial opportunities within the organization. Employees are given the freedom to execute projects as entrepreneurs. This brings out their creativity and enables them to try new things, which in turn encourages them to set higher goals for themselves. In some cases, the freedom afforded these employees is enough to enable and empower them to work on multiple projects and issues at the same time – something they would not have been able to do in a structured job.

6. Finding employees among beneficiaries. Social enterprises all over the world often recruit their own clients or beneficiaries as employees (See Jaipur Foot House). This strategy of developing beneficiaries-employees is particularly suitable for organizations that provide subsidized or free services to their clients.

7. Attracting employees to a serene lifestyle in peaceful and scenic location. Social enterprises, which are located in picturesque locations in India such as the hilly regions, North Eastern plains or Andaman Nicobar Islands are able to retain their employees because of their geographical locations. Employees working in these areas like the scenic beauty and serene life style that are characteristic of these areas. Employees build a family kind of relationship with local inhabitants and get deeply attached to these people and their lifestyle.

8. Providing attractive fringe benefits to employees. Some organizations provide various fringe benefits, such as support for employees to pursue higher studies at foreign universities, provide opportunities to do part time consultancy work for other organizations which could supplement their income.

It is interesting how some of the social enterprises use above strategies to cater to the perennial problem of a dearth of quality human capital, converting their weaknesses into their strengths in the process. However, in the empirical exercise of analyzing a few cases of social enterprises, the findings strongly support the theoretical perspective – social enterprises tend to adopt a ’partnership paradigm’ where they consider their employees as partners, contrary to pure commercial enterprises where they consider their employees as outsiders. In social enterprise, the employee has to be fully integrated with the organization and thereby imbibe its service ideology to be effective in his/her work. Also, sharing of risks and responsibilities, because of which the work is perceived as more important than the monetary rewards associated with it.

Thus the employees would be prepared to work for relatively low compensation, which could become a significant factor contributing to the long-term survival of most social enterprises.

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