Human resources development in a social business

It is important to be clear what the basis of the relationship between a social business and the people who carry out work for it is. Is the worker a partner, a self-employed contractor, a volunteer or a directly paid employee? Are they full time or part time and if part-time is the business the main employer or a secondary employer? 

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Points to consider

Reliance on goodwill, fudging of a potentially complex relationship and reliance on presumed coincidence of social objectives can lead to sorting these matters out through time and cash expensive processes in-house, in Industrial Tribunal or in Court.


By taking up employment, does the worker acquire rights and responsibilities as a Member, part-owner or partner and, if so, does this occur immediately or after a probationary period (or probationary requirements)?

The Human Resource Development (HRD) function is key to the survival and success of a Social Business, and it is a sound principle to specifically give this role to someone or some team with the time and finance budget they will need to carry it out.

Good HRD brings clarity to the relationship between business and worker. The key to clarity is the description of the roles that workers are expected to fulfil. This role might have several different jobs within it (Member, director, internal management function(s), external relationship function(s) as well as work in production or service delivery). The better these are described in job descriptions the better a worker will be able to understand their and each other’s role, the better core management will understand who does what (and what is yet to be done by anyone) and the better the HRD function will be able to understand how they will address the training needs of the workforce. These needs are met through a HRD plan and a budget which should be approved by the Directors (or equivalent) and form an integral part of the Business Plan. 

The overall HRD Plan can be reflected in Personal Development Plans (PDPs) for each worker. A PDP is negotiated with members of the workforce and addresses what they require to do their current and projected role effectively and efficiently. Depending on the policy and budget of the Social Business it might also address wider personal and professional development.

The role and professional development of workers should be reviewed regularly and at least annually. The understanding built up by worker and HRD on the role and how it fits within the business as a whole can lead to proposals for change to that role, or other roles, or processes or resource allocation in the business to improve overall effectiveness. 

Find more information on Staff Training and Skills Support on the Skills Gateway website.

It may also be used to establish standards for the performance of work and targets for improvements in quality and efficiency. These in turn can be used for a process of appraisal and feedback on a worker's performance. 

Well developed job descriptions are of great value when it comes to recruitment. It enables the HRD function to advertise requirements accurately, to shortlist those who are able to demonstrate appropriate knowledge, skills, aptitudes, interests and to devise tests and interview questions that will maximise chances of selecting the right recruit. (It will also maximise the chances of recording conformance to the businesses' own Equal Opportunity Policy and legal requirements). Find more on staff recruitment, contracts and diversity on the Business Wales website.

Social businesses have opportunities to market their vacancies through many networks relating to their social mission, trade sector, interest groups and so on. It pays to be assertive and advertise for candidates as widely as possible even if the business is youthful, the future uncertain and the monetary rewards a little uncompetitive. Always allow for the possibility that you will be agreeably surprised by highly motivated people with an understanding of business realities offering their services.

The HRD function also ensures that the Social Business meets its obligations under law and best practice as a good employer. The cornerstone of the relationship between a Social Business and employees is its standard contract of employment. More detail on legal requirements is available on the Business Wales website and on good practice through ACAS. Many Social Businesses find it helpful to have the support and advice of a Trade Union relevant to their trade and encourage their workforce to join a Trade Union. 

Disciplinary and Grievance matters, where these relate to employment, also fall to the HRD Function. When carrying out disciplinary procedures it is important to act carefully, proportionately and to consider Employment Law and the codes of good practice published by ACAS. Do not forget to take into consideration any additional rights conferred on employees or Members by the Social Business's own governing document, policies, procedures, custom and practices. In particular, be mindful that these might confer an additional right of appeal to the Social Business's own governing body above and beyond those enjoyed by workers in most businesses.

For a detailed and concise overview of employing people, read the guide to Employing People and its appendices

Help and support from Business Wales