A Social Enterprise: Your Next Employer?
An organisation’s commitment to creating social impact can be the foundation for its success, rather than a disadvantage for which it has to work harder to overcome.
Gone are the days when one-off donations to a local charity and fundraising campaigns run by office interns were enough to deem organisations as socially influential. Overtime, corporate social responsibility and business ethics have been put ever-more frequently under the spotlight, as employees, governments, investors, and policy makers are increasingly eager to take a closer look at companies’ social impact.
‘Social Enterprise’, You Mean a Charity?
The advent of the ‘social enterprise’ has suggested a new organisational structure, one in which an organisation’s commitment to creating social impact can be the foundation for its success, rather than a disadvantage for which it has to work harder to overcome. The modern social enterprise can be seen as a mix between traditionally ‘altruistic’ organisations - such as charities and NGO’s - and fast paced, status-quo challenging start-ups. So if you’re looking for a new gig and don’t like the slow paced culture that often plagues charities, but also don’t want to sell your soul to the insurance industry, a social enterprise is an attractive mix to say the least!
Share of different types of enterprises in the UK small business population
(Social Enterprise: Market Trends 2017)
Today, the social enterprise model is catching up to the traditional small and medium-sized enterprises (SMEs). Perhaps surprisingly, it is also proving to be a more reliable model for profit generation, with over 93% of UK social enterprise employers generating profit versus 76% of SME employers. So why is a model that is so heavily focused on creating social impact also so successful at creating sustainable income?
Here, Have Some Cash
Unfortunately, I’ve witnessed first hand what happens when an organisation has an influx of finance with no one around to monitor how it’s being spent. When I was working at a young tech start-up that was wastefully spending hundreds of thousands of venture capital, I was fairly indifferent. However, when I was volunteering with a large multi-national charity who failed to see that its stakeholders were misusing aid, and neglected the need to introduce systems which measure the success of its programmes, I was slightly more agitated.
Comparatively, social enterprises are forced to continuously assess the quality of their approach. As the social enterprise model is built upon reinvesting profits and sustaining organic growth, they can’t afford to misuse funding or waste resources. Although this may sound debilitating, it has been shown that financial constraints can actually lead to the ideation of more creative products. But social enterprises have other constraints too, such as the fact that the problems they’re trying to solve often happen to be extremely complex and ingrained in wider systemic issues. Could this also be a force for innovation? It’s hard to say explicitly, but social enterprises such as Cracked It, who have successfully connected the unmet demand for phone repair with the persistent problem of young offending in London, two seemingly unrelated issues, seems to suggest that constraints don’t always stifle success.
The ‘I don’t want to hate my job’ generation
Benefits that were once limited to ultra-hip tech start-ups, such as personal development budgets, remote working, and flexible holiday are now taken for granted among young creatives currently deciding which career path to stumble down. And it looks as if employers may have to offer more than casual Fridays and a free snack bar if they’re going to attract the designers and project managers of tomorrow’s solutions (yes, even if you have pistachios). According to Deloitte, millennials are becoming increasingly sensitive to how their organisations address social issues. Which may lead to a more comprehensive shift towards jobs which are inherently socially impactful, rather than a corporate job which happens to have a fantastic recycling policy. Of course for some, their company’s mission and underlying culture will never be as important as their individual success or bank account growth. It’s hard to tell which companies will have the pick of future top talent, but as we continue to question what we want out of our jobs, we may find the purpose we want our employer’s to pursue to become an increasingly impactful one.
Smooth Sailing Ahead?
Unfortunately, talent and healthy business models only get you so far. Although there are many thriving businesses that have excelled without it, there is one thing that often significantly influences initial success, FUNDING! On the one hand, there has been a significant increase in the number of programmes and accelerators for social entrepreneurs in recent years, which has really supported the development of the sector and connected key stakeholders. However, access to funding still remains limited for social enterprises in comparison to other businesses, mostly due to finance providers’ lack of understanding of social enterprises as investment opportunities and their associated risks.
Obstacles To Business Success
(Social Enterprise: Market Trends 2017)
As is often the case, the vulnerable often fall the hardest. In addition to the vulnerable members of society whose problems social enterprises work to solve, social enterprises themselves are more susceptible to economic uncertainty and risk caused by crises such as Brexit or the current Covid-19 pandemic.
The potential of the social enterprise model for employees, founders and investors is clear, but as the sector evolves it will likely face increased scrutiny and a need for further legitimisation if it wants to be taken seriously as a model capable of competing with charities, NGO’s and corporates alike. Public perception of social enterprise is yet to be fully determined, and the sector’s recognition among government entities is still ambiguous. Whether the concept of a social enterprise will become a forgotten, once idealistic model or a recognised formula for holistic success is still uncertain, but the answer is sure to determine the fate some of societies most marginalised communities.
Let us know your thoughts in the comments below. What’s the future of social enterprise?
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