Private Sector Leaders take 28% pay cut to join the Not-for-Profit Sector

(16 Nov 2018)

So far in 2018, 2into3 has filled 17 management-level roles within the not-for-profit sector. 8 of these assignments saw individuals who were working in the private sector take up a senior level role within the not-for-profit sector at a 28% drop in salary from €126,000 average private sector salary to just over €90,000 in their new role within the not-for-profit sector. Of the 9 managers who transferred within the sector, on average, they saw their salaries rise 10%.

Over the past few years, there has been much written about people in the private sector changing career paths and moving into the not-for-profit sector (Bacchus, 2012; Rawstron, 2016; Kurji, 2017) with the pay differential balanced by job satisfaction and a better work life balance. 

Why are private sector managers willing to take a pay cut?

This was one of the first questions posed to candidates when they were screened by 2into3’s recruitment team. Individual answers varied, but were easily collated into one common theme, Purpose. During their time in the private sector, the eight individuals were approaching the peak of their careers, with a few already having done so. Despite their success, they chose to do something that offered a sense of fulfilment and helped them to play a part in changing the world for the better. 

Why did 2into3 choose to shortlist private sector leaders and more importantly why were they hired?

The post-recession years have seen the Irish not-for-profit sector growing again (2into3, 2018; 2into3, 2017). As the sector has expanded, there has been an increase in administrative requirements (i.e. need for greater governance and transparency; The Community Foundation of Ireland, 2018).  Not-for-profit organisations are also reshaping themselves so that they can meet increasing demand (Uzonwanne, 2015). Leadership is potentially the most important factor to the future of the not-for-profit sector. The eight candidates who were appointed demonstrated that skills they had were transferable to the sector.

Should not-profit organisations solely seek out private sector candidates in the future?

Of course not. While just under half of roles filled by 2into3 in 2018 (to date) saw private sector leaders transferring more than 50% of appointments saw individuals whom were already within the sector progressing into more senior positions. Some roles require specific a skillset/experience that can only be gained through working within the sector (e.g. service delivery, programme management).

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