Social enterprises - A viable career option

Today social or impact sector is a growing job market providing exciting opportunities for career growth and contentment. Gone are the days when it was considered an unviable career option. Lack of sector knowledge is one of the main concerns during the process of talent acquisition for social enterprises. This along with the difficulties associated with accessing those with relevant expertise has led to a mismatch in the demand for skills with the supply. This article is an attempt to demystify some of the misconceptions.

Starting with resources that are required for success have similarities across commercial and social enterprises, they both must be accepted for their standing and capabilities to obtain the trust of those who are willing to work and invest in them. While social enterprises are seeking to draw resources for the social good, rather than for purely financial returns, they depend just as much, if not more so, on a network of contacts that will supply them with access to funding, board members, management, and staff, among other resources. To attract these resources, social enterprises, like their commercial counterparts, must have a strong reputation that brings about trust among their providers.

Social enterprises face similar challenges that of commercial enterprises during the initiation, establishment, and institutionalization of their ventures. However, for social enterprises these challenges require unique solutions, considering the focus on a social mission, and the socio-economic profile of the people they are catering to, hence innovation is always at the core of such enterprises, they create new solutions to old and new social problems. This could be in the form of new service, product, quality, process, or sources of supply.

The distinguishing factor between social and commercial enterprises is the degree to which value creation predominate value capture. While at the inception, a social enterprise may be slanted towards the former but soon while scaling up and engaging with other stakeholders such as investors, employees and other service providers demands value capture for the resources committed by them. In order to enhance value creation, the social entrepreneur would require best in class service providers and funders hence, there is an intermingling of missions, intentions and techniques. The primary objective of such a venture is not ‘dichotomous’ but a ‘continuum’ varying from purely social to purely economic.

Another important differentiator between a social and commercial enterprise happens to be the challenges that the social enterprises face while measuring performance. The commercial entrepreneur can rely on relatively tangible and quantifiable measures of performance such as financial indicators, market share, customer satisfaction, and quality. Whereas the various financial and non-financial stakeholders to which a social entrepreneur is accountable are greater in number and more varied, resulting in greater complexity in managing these relationships. The challenge of measuring social change is great due to non-quantifiable, multi-causal, temporal dimensions, and sensitive differences of the social impact produced. Performance measurement of social impact will remain a fundamental differentiator, complicating accountability and stakeholder relations.

The not-for-profit social enterprises sometimes face constraints due to sporadic supply of funds which encumber their ability to mobilize and deploy resources to accomplish the organizational goals. In order to rise above some of these barriers, social entrepreneurs opt for a for-profit or hybrid organizational form to increase their ability to scale social impact and economic viability for their stakeholders. Hence restructuring the business models supports innovating numerous approaches to solve social problems in a professional/competent and sustainable manner. This dual mission has proved to be instrumental in enabling leaders to recruit and mobilize effort from employees, volunteers, and supporters.

Adopting a multi-case study approach, practices adopted by social entrepreneurs while recruiting, engaging, motivating, and compensating employees were observed. The result of the study revealed many best practices of human resource management being adopted by social entrepreneurs. The motivating factors almost remained the same as that of a commercial enterprise and the approaches to attract the best talent in the market were also similar but limited knowledge about social enterprises increased the challenges in attracting the best of the talent available in the market.

Organizations for this study represented not for profit, for-profit, and hybrid and was selected based on the following criteria:

1. Must have a legal entity in India

2. End solution must be focused on BoP

3. Must be in operation for more than five years

4. There must be an increase in employee strength and social impact in the last five years of operations.

The objective was to study human resources management practices in social enterprises, with an attempt to clarify ambiguity that exists due to the context of these organizations.

Findings of the study:

The founder’s influence came out as an important motivating factor. Walk the talk and living values provided authentication to the mission of the enterprise helping in positive psychological bonding with the organization. Founders set examples of ethical behavior and owning one’s personal experience be it thought, emotions, needs, wants preferences, or beliefs. This helped in value creation which is the prime motive guiding all activities along with a need for value capture.

Founders accelerated collaboration by infusing optimism through effective communication; innovation by appreciating proactive, experimental, persistent learners; customer focus by being responsive and solution-driven; professionalism by remaining result-driven, dedicated, and effective decision-makers; trust by being fair, transparent, and truthful. These qualities helped in realizing the organization’s mission, that of effectively bringing resources together for people who are in need and making a difference by solving their problems.

There exists nil or marginal difference between a commercial enterprise and a social enterprise while strategizing for acquiring scarce resources. Both commercial entrepreneurs and social entrepreneurs compete for common resources hence incurring similar costs and requiring similar problem-solving skills.

Human resource planning takes place keeping in bigger goal of the organization in view. They are carefully aligned with the strategy, mission, and values of the organization. Processes were well defined and documented.

The organizational structure is designed keeping in mind the fit between context and effectiveness. There exists a well-defined hierarchy but is flexible enough for greater collaboration and effective communication.

The main challenge in attracting top talent is a lack of knowledge with regards to social enterprises/sectors due to which there remain apprehensions in the minds of the prospective employees.

There is a dearth of experienced manpower who can handle the “constructive tension” as is required in such enterprises. The talent preference scale is slightly tilted towards someone who has a similar background and relevant education but employees from related commercial enterprises are also equally welcomed. Volunteering is encouraged and interns are taken on a need basis and to build a pipeline for future talent requirements.

The method of talent acquisition remains fairly like that of a commercial enterprise. They primarily depend on print and social media. Job portals, placement consultants, and campus recruitments. Once onboard, special care is taken to align them with organizational culture and is provided necessary training in order to deliver the job requirements. ‘Buddy system’ in which the new joiner is linked to an existing employee who provides mentoring plays a vital role in integrating the new joiner with the organization.

Reward system depends on institutional forces, matching them with the job deliverables; competitive salary structure is a norm. Other benefits vary depending on HR policies. Special incentives for achieving and exceeding targets are provided in order to maintain a competitive spirit at the same time collaborative culture is also encouraged. Providing extra leave and trusting employees when they call in sick are some other best practices being followed.

Employee engagement programs support in keeping the employee motivation high and an ecosystem of vibrant culture. Outdoor trips for employee bonding, open-door policies, employee recognition, and celebrations together provide an atmosphere where every employee is valued and motivated. Regular site visits for every employee helps in greater engagement and understanding of the impact that the organizational activities are expected to achieve. A culture of excellence and touching people in a positive way supports in nurturing employee citizenship behavior and cultivating belongingness.

A well-developed performance management system takes care of appraising, providing feedback, identifying training requirements, and career growth. Employee life cycles are planned, and their career path is aligned with organizational strategy.

Employee surveys are a regular feature that supports addressing their grievances.

As the majority of the world population lives at the base of the income pyramid and given the access to information and knowledge provided by the advancement in technology, they too have started demanding high-quality products and services at affordable rates. Businesses, in turn, are on the lookout for new pastures for their sustained growth, many companies from telecom, banking, and FMCG etc have in the past launched products tailor-made for base of the pyramid markets and have proved their worthiness of such an initiative. This new lens of study allows us to conclude that, soon we can expect social enterprises to become almost as important a trend as commercial, providing a sizable proposition in the economic system. It is expected to create new industries, validate new business models, and channel scarce resources to the base of the pyramid markets. The opportunity to do meaningful jobs and bring in the change you want to see in the society is immense.

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