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Widening Pay Gap Between the Private and Third Sectors

An analysis conducted by fiscal think tank, Pro Bono Economics (PBE), has highlighted a concerning and widening gap between pay in the private and charity sectors.

Neither sector is keeping pace with inflation, but year-on-year wage growth for the third sector was recorded at 3.8% compared to 5.6% in the private sector (May 2022).

Voscur have summarised the findings along with the Bank of England's decision-maker panel survey.

PBE also recognised in their analysis that motivations for private sector employees can often differ from third sector employees, and this can allow for stagnant wage growth in charities where employees are motivated by job satisfaction over financial compensation.

However, PBE warned that this effectively excludes prospective employees from less advantaged backgrounds and under-represented groups, and can facilitate workplace burnout for existing employees.

Both sectors report facing difficulties in recruiting new staff, and PBE warns that this disparity in wage growth between the third and private sectors may deter potential employees from taking jobs in the charity sector in favour of better pay in the private sector.

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