To Find This Really Unethical

[Moaning5]

I work for a Not For Profit organisation that provides support to extremely vulnerable service users (think sick, disabled children amongst others).
Funding has always been limited, but after having additional grants during covid, the organisation (along with all in same field) is forecasting significant cuts to funding. Access to additional income is extremely limited also.
In order to make the book’s balance we are cutting services significantly. We have requested voluntary redundancies, early retirements, part time requests, etc. They will become compulsory in new year.

With all this going on, 3 of the best paid, most senior SLT, are requesting an inflation busting payrise (on top of their annual payrise) of up to 20% - giving the reason as they’re job is more challenging due to funding cuts, and other similar organisations are on more.

Is this a reasonable request ? How can this be ok ?

At the end of the day, it's a job. If people think they are being under paid for the work they do, they can absolutely ask for a raise.

It's up to those in charge as to whether they think the raise is warrented and/or affordable.

If not, the staff member may leave and the charity will have to replace them (possibly paying more or less than before).

The member of staff has to decide whether it's worth staying and/or if they can get better paid work elsewhere.

The only question as I see it is ‘ are they worth it ?’ . Do those who will make the decision understand their role, and will they think that the risk of losing them is worth the cost of keeping them?

These are not volunteers who are doing it for for love, these are professionals who believe their market value is higher.

I do agree it’s hard to see as others are losing their jobs, but the organisation would have to weigh up their value vs the cost of replacing them.its not black & white.

However unfair it seems, it's better to try and retain staff at that level then try and recruit new.

If the organisation had any hope of surviving, it will need to retain strong people.

If those individuals are paid 20% under market value, they’ll leave and go elsewhere, costing the company money in recruitment and training.

As an aside, OP, are you going to take a pay cut?

It’s the same old story. The people with power at the top get ever richer and the gap between them and the lower earners just keeps widening. Like the MPs huge rise when they won’t allow public sector workers to earn fair salaries. It’s how our country works. Until we all decide to vote for fairness. Much prefer the Scandinavian ways.
would it have any effect if the lower paid workers band together to challenge them on ethical grounds OP? Eg to the board?

I don't think it looks great when making staff redundant for the top people to be taking big pay rises.

It’s funny how this logic only ever applies to the people at the top.

The replacement costs will be higher for someone who is on the SLT so yes it does make sense. However if they were paying anyone at 20% less than market rate they’re going to have a staff churn issue at whatever level.

That's my feeling as well. It's a failure of leadership.

I hate the current NGO culture

@AreYouThereDog re. A pay cut myself ?

I find it very difficult sitting in meetings discussing reducing services to such vulnerable children. I find it very difficult cutting amazing staff working on not much more than NMW.
Yes I am requesting a cut in hours to save them money, and I guess that’s why this SLT increase seems so wrong, but I guess PPs are right in that they need to look out for their own interests.

Everyone is entitled to leave an organisation if they feel they’ll get more money elsewhere. People do it every day.

From a company’s perspective, having a CEO or COO role vacant will cost more in terms of direct costs and indirect costs (eg reputational) compared with having the receptionist leave.

If those individuals are paid 20% under market value

Are they really though? Maybe the SLT of the other companies are doing better at fund raising and managing their resources in tough times.

My experience is from a commercial SME. We went through hard times, at one point we all agreed to a salary cut - which was repaid to us in subsequent years. Sliding scale 5% (or possibly nothing) for the lowest paid, 10% standard, 15% upper management, 25% for the head honchos.

That's proper leadership, in a company which had to survive in the real world.

Comparing with one receptionist is disingenuous. If organisations are shaped like pyramids the equivalent is a whole raft of people at lower levels, and if many people at lower levels leave the service will struggle to deliver its core functions which will also lead to indirect costs, reputational damage etc.

If those individuals are paid 20% under market value

Are they really though? Maybe the SLT of the other companies are doing better at fund raising and managing their resources in tough times.

Well obviously none of us know, including the OP, I’d guess.

But this will go one of two ways- they’ll be told no and will have to either suck that up or leave, or a review will show they’re underpaid for the work they’re expected to do and remuneration will be adjusted accordingly to try and retain them. Chances are, 20% is their starting positions any increase would be below that.

Most commercially-savvy companies realise that getting through hard times often means keeping key people. This is all fairly standard stuff and not specific to non-profit.

Totally unethical - I would not want to contribute to a charity that did this, for example.

You mean the MP's pay rise of 2.9% in 23/24, the same as the average increase for public sector workers? Or last year's rise of 2.7%, which was again the same as the average increase for public sector workers and which was the first pay rise for two years?

Since 2015, MPs pay rises have been linked to the average increase in pay for public sector employees. But don't let the facts get in the way of a good moan.

It's a tough one to swallow, but the reality is many senior managers do what they do mostly for the benefit of themselves and their families, not for a cause they believe in, even if they work for a non profit organisation. If they believe they're being underpaid for what they do, or could get more elsewhere, then as much as it might seem morally wrong in light of making funding cuts, they are entitled to ask for a pay increase. The theory is that their skills and expertise should ultimately bring in more value for the charity than it costs to employ them. If that's not the case, or if they could be replaced with others equally skilled at a lower cost then of course the Board should decline the request and let them leave if they choose.

You will of course get some very highly skilled people who are happy to do jobs for a lower wage for a cause they believe in, but it would be a false economy for a charity to make this a hiring policy - the likelihood is they would struggle to find enough good people to fill the roles, to the detriment of the charity in the longer term.

There are a number of factors to consider:

• market rate = benchmarking
• as pp have said, cost of recruitment to replace them
• objectives & targets - what are they expected to deliver for their salary?
• Could you make part of the increase performance related?
• Sourcing additional funding - whose job is this?

They are comparing against same job titles/descriptions within the same industry, but bigger organisations with higher funding.
Any additional income when rec’d is directly related to service users and is highly audited, so we have to prove it’s gone on them (and not fixed salary costs).

Agree it sounds wrong, although as I understand it the trustees have the say on payrises?

Equally it may be members of the SLT who face redundancy..

I think all individuals with a power base have to entrench to protect salary/pension/tenure. Trustees and board members only know what they're told and are rarely impartial.
The system can protect a fantastic degree of incompetence at the top. You only need to read Private Eye to see how many individuals who have failed on an enormous scale get pay offs and secure pensions and sometimes scooted into a new position of Teflon power.
There is so much corruption and a great deal of the appearance of best practice while little evidence of it.
It's ubiquitous across all sectors from what I can see.

I'd consider such a request an error of judgement in the circumstances described.

Also the fear of being sued makes organizations toothless in addressing poor performance and it can be easier to promote someone than get rid of them. Organisations can also be embarrassed to admit when they've made poor appointments. And you can see senior people can be loathe to promote a junior who may be a little too able for comfort.