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What Is A Social Firm?

A Social Firm is a market-led enterprise set up specifically to create good quality jobs for people disadvantaged in the labour market.

An emerging Social Firm is an enterprise that is working towards becoming a Social Firm, usually in the early stages of trading and not yet in a position to employ numbers of people, but working to a business plan which illustrates how they're going to achieve their goal.

The Social Firm sector is the collective term used for emerging Social Firms and Social Firms.

The business activities of Social Firms vary widely. Case studies are available which reflect this diversity (www.socialfirms.co.uk/index.php/Section5.html).

There are three core values that Social Firms will subscribe to within their businesses, orientated around Enterprise, Employment and Empowerment:

Enterprise – Social Firms are businesses that combine a market orientation and a social mission (‘businesses that support’ rather than ‘projects that trade’):

• At least 50% of the firm’s turnover is earned through sales of goods and/or services. (Lowest for Social Firms April 2005 - 66%)
• The firm has an appropriate legal status. It must not be governed or driven by individual profit (except for worker co-operatives). Remote shareholders must not extract unreasonable profit.
• The firm is trading and follows business processes, such as having a business plan in place.
• The firm has a constitution or written guiding principles that reflect its employment objective concerning disadvantaged people.
• The firm has a management structure that supports trading as the firm’s primary purpose.

• More than 25% of employees are disadvantaged people.
• All employees have a contract of employment and market wage at or above national minimum wage.
• An equal approach is taken to the type of employment contracts used (permanent, fixed term, temporary) between disadvantaged and non-disadvantaged staff.
• The firm operates processes to engage employees in their own and the organisation’s development.
• The firm has procedures and policies in place in respect of Equal Opportunities and Health and Safety.
• The firm is compliant with relevant employers' legislation e.g. Disability Discrimination Act and National Minimum Wage.
• All employees have the opportunity to progress either within the Social Firm or into alternative employment as appropriate.
• The firm is acknowledged as a good employer by employees and stakeholders.
• The firm is acknowledged as a good employer through an external accreditation process.

• Reasonable adjustments are made for employees relevant to their needs.
• Staff development is a priority for the firm to maximise each employee’s ability and potential.
• There are processes in place for managing stress. Staff are encouraged to have control over their working environment.
• The firm demonstrates a commitment to maintaining staff confidentiality. There is a procedure in place that demonstrates when staff have agreed what information can be shared.
• Volunteers have agreements that reflect good practice in volunteering.
• The firm provides Disadvantage/Disability Equality and Awareness training to all staff as appropriate (e.g. mental health awareness).
• The firm has an added emphasis on training for disadvantaged staff. Training reinforces and builds on learning and takes account of developing social skills as appropriate.
• The firm’s organisational structure is enabling and encourages staff to participate in business decisions as appropriate.
• Trainees, work experience candidates and volunteers have different programmes and responsibilities to those of employees. Training should be time-limited and should lead to an award once competences are achieved.

Developing A 'Standard' For Social Firms
Social Firms UK is developing a 'standard'/accreditation system for Social Firms. Sally Reynolds recently shared information about this at a CEFEC conference in Seville in October 2006.

Mark Powell of Broomby Chats About The Importance Of Social Firms (July 2007)
While at the Social Firms UK conference in July 2007, Mark gave an interview to Social Enterprise Podcasts. In it he talks about how he came to work in the Social Firm sector, the importance of Social Firms and the need for more to be set up. To listen visit:
http://www.sepodcasts.org/podcast.php?p=174

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