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The majority of charities (54%) have openings, causing some to limit their operations, according to a study published today.

The study, based on a sample of 489 registered charities, found that among those with hard-to-fill vacancies, 46% have had to pause some operations.

One in five struggle to meet quality standards and nearly a third are unable to meet contractual or project targets, found Pro Bono Economics (PBE) and Nottingham Trent University’s VCSE National Observatory for Data and Information (NTU).

The study shows that close to half of charities, 46%, do not expect to meet demand in the next three months.

Most charities (53%) have increased salaries, while a quarter are concerned about staff burnout, he says.

‘The charity sector is facing a serious recruitment crisis’

Daniel King, Director of the National VCSE Data and Insights Observatory, said: “The charity sector is facing a severe recruitment crisis, leading to staff burnout and severe gaps in service delivery at a time of high demand. “.

He added: “This hiring crisis, coupled with ongoing cost-of-living pressures, poses a considerable challenge to the financial resilience of the sector.”

Recruitment is one of the top three concerns for large charities – more than four in 10 say it is one of their biggest problems as they try to meet demand.

In response to these employment challenges, more than half, 53%, of charities have increased wages and one in five, 22%, have increased spending on recruitment.

It found that employees of more than half of the charities, 52%, who are experiencing recruitment difficulties were working longer hours as a result, while 70% of these charities said their staff’s workload had increased due to recruitment challenges.

In all, one in four, 24%, of charities overall cited staff burnout as a cause of retention issues and this rose to more than one in three, 34%, for large charities .

One in four, 24%, of charities cited staff burnout as a cause of retention problems, as well as disruption to charity services.

The survey found that 55% of charities struggling with recruitment cited a lack of suitably qualified applicants as the cause, while just under half, 47%, said there was a lack of people interested in the type of work required.

The report adds: “To make matters worse, the long-term downward trend in volunteer participation has continued. Volunteering rates have fallen to record lows, as the sharp decline in volunteering seen during the pandemic is proving difficult to reverse.

Recent research by PBE for the Law Family Commission on Civil Society found that charitable staff in the UK earn 7% less per hour on average than workers in other sectors.

Charities navigating a ‘dangerous’ financial climate

The study says the sector has been trying to address rising levels of need, while also trying to “navigate an increasingly dangerous financial landscape.”

It also shows that 51% of charities have to resort to using their reserves to cover operating costs.

With inflation and energy prices putting pressure on the most vulnerable households, the survey found that nearly eight in 10 charities have seen an increase in demand in the past three months.

At the same time, more than three-quarters of charities said revenue was one of their biggest concerns and a similar proportion said rising costs were causing financial deterioration.

“But as the economic outlook in early 2023 begins to show gradual signs of improvement, the outlook for some within the sector has also improved,” the report notes.

“The proportion of charities reporting high levels of uncertainty has slightly decreased, while a growing minority of organizations are becoming more optimistic about their near-term prospects in a range of areas, from recruitment to finances.”

The survey was conducted between February 6-20, 2023 and is the second in a series of quarterly barometers.