Q: Many employers have diversity policies, what's different about Social Firms?

A: The answer’s in the word “social”. Social Firms are in business to meet a specific social need, that is, to create employment for people who face the biggest barriers to employment. For example someone with a history of mental health problems or a learning disability may not be able to work full-time or may need extra support while they're at work.

Even in today's climate of high unemployment, about 3 out of 4 adults, and nearly half of people with disabilities generally are in work. But, if you scratch beneath the surface you see a different story. If you have a mental health problem or a prison record, you only have a 1 in 5 chance of being in a job. If you have a learning disability your chance of being in work is 1 in 10 and if you’re homeless the chances are 1 in 20; in other words there’s only a 5% likelihood that a homeless person has a job.

In contrast, the overriding goal for a private sector firm is to maximise profit for its owners or shareholders and many public sector employers are surprisingly reticent when it comes to “going the extra mile”. Their diversity policies rarely stretch to providing the support that some people need, especially if they face multiple barriers.

Q: How do Social Firms mix the 'able' and 'less able'?

A: It depends on the individual Social Firm, their business and the people they employ. Running a viable Social Firm involves achieving a balance between operating a commercial business and providing an inclusive supportive workplace. Social Firms have a blend of characteristics:

• real work paid at the rate for the job;

• an integrated working environment where all employees work together;

• a participative working environment that values the contribution of each employee and, where appropriate supports recovery and rehabilitation; and

• a learning environment where personal development supports life-long learning and where there are opportunities and support to move up the employment ladder.

Q: How do Social Firms reconcile the need for productive employees with addressing the wellbeing of their staff?

A: The two go hand in hand. Employers who, through their actions can demonstrate that the wellbeing of everyone working in the Social Firm is a priority, are most likely to have a motivated and more productive workforce. There are some key elements that it’s important to get right. A Social Firm needs to adopt best employment practice so that they:

• Have clear policies and procedures applied consistently;

• Ensure that everyone understands their roles and responsibilities;

• Have quality standards that everyone meets; and

• Offer opportunities to progress.

For some employees, particularly those who have faced barriers to work, wellbeing may be only be achieved with additional support; for example, help with sorting out their welfare benefits, housing or problems in their personal lives. By establishing strong links with local specialist agencies or other support agencies, the Social Firm can focus on its role as responsible employer whilst ensuring that employees have access to the range of advice and practical support they may need to enable them to manage or overcome the particular challenges they face.

Q: How do Social Firms create a level playing field when it comes to recruitment?

A: Just like any other employer, when taking on someone you need to be clear about the job you want the new recruit to do and recruit on the basis of whether the applicant has the aptitude to perform, or be trained to perform, in that role and be a “good fit” with your organisation’s aims. What is different about Social Firms is their commitment to create a level playing field of opportunity for people who face the steepest uphill struggle to get a job. This means that Social Firms need to take a very close look at what really is necessary to perform in a particular role or team as well as focusing on what people can do, rather than setting an unnecessarily high bar. For example, how important is good literacy to the role? What can be learnt on the job? Are there adjustments that might need to be made? The last thing Social Firms want to do is place at an even greater disadvantage the very people who are at the target of their social mission.

Q: But what about equal opportunities?

A: The Equality Act requires that people are not treated less favourably because of their gender, race, religion and other legally protected characteristics. It does allow disabled people to be more favourably treated than non-disabled people. The equality law doesn’t extend to other labour market disadvantages, such as having a prison record or being homeless.

Q: Don't more capable staff have to carry the others and doesn't that cause problems?

A: Not if the Social Firm has planned its business carefully. Designing jobs that fit with people’s capabilities and building in the right support and supervision structures is an essential element of developing a Social Firm. But it would be unrealistic to think that a Social Firm can do this without allocating additional resource to this aspect of the organisation. This has implications for the financial and business model and reflects one of the fundamental differences between Social Firms and other market-led organisations.

But it’s not all about money. Key foundations of a supportive workplace are teamwork and a focus on lifelong learning and self development. Managed positively, a diverse workforce can bring the best out of one’s employees. The garden may not always be rosy but that can be said of any organisation and is not just an issue for Social Firms.

Q: Social Firms used to be about disability. How come they now work with people with histories of homelessness, offending and substance use?

A: There are two main reasons. People’s lives are complicated and often don’t fit into neat categories. It became increasingly obvious to Social Firms UK that a disproportionate number of ex-prisoners had experienced mental health problems or learning disabilities. Often they could not find accommodation on release and many homeless people had experience of prison and/or mental health problems and/or substance use. The Social Firm model offers a solution to people who may or may not have a disability but who are facing a wider range of workforce disadvantages.

Q: Aren't Social Firms just sheltered employment schemes that don't compete - or compete unfairly - with regular businesses?

A: No. The key differences between Social Firms and sheltered employment schemes are:

• Social Firms are driven by an entrepreneurial culture, focusing on selling their goods or services in the open market. Financial viability is essential to grow the business and create more employment. On the other hand, income for sheltered employment schemes usually takes the form of public sector or charitable grants, government employment programmes for disabled people and in some cases preferential access to public sector contracts.

• In sheltered employment schemes there is usually a management team of non-disabled people with disabled people making up the remainder of the workforce. In contrast, Social Firms generally have an integrated workforce, with progression routes and a strong emphasis on worker engagement in the success of the business.

Social Firms compete fairly on the open market. They receive no state subsidies and in fact their overheads are generally greater than other mainstream firms because of the costs associated with employee support.

Q: But surely they're funded for providing the support and employment for disadvantaged people?

A: No. Social Firms do not get any special entitlements.

Q: Isn't it better for disadvantaged people to get work in mainstream employment than on schemes?

A: That is, first and foremost, a question for the individual employee. For some people “mainstream” firms simply don’t offer the job opportunities that they need in terms of hours, flexibility or support. In many cases “mainstream” employers are simply unwilling to recruit someone with a history of labour market disadvantage – that is why Social Firms developed in the first place. Working in a Social Firm provides the opportunity for someone who has been out of the labour market due to illness or other reasons to develop confidence, demonstrate their capabilities, learn new skills and, if they choose to move on from the Social Firm, a recent reference.

Q: It seems like quite a 'nice' way of working. Are Social Firms as dynamic and innovative as real businesses?

A: Social Firms are true enterprises – they are as dynamic and innovative as anyone else in order to compete successfully in the market and remain in business. Having a social mission requires inspiration and really does make a difference!

Q: What should mainstream employers be watching in the Social Firm sector when it comes to 'future-proofing'?

A: Three things mainstream employers can learn from Social Firms are:

• how to create inclusive and supportive workplaces;

• the reputational benefits of doing business with and buying from the Social Firm sector; and

• how to achieve a balance of economic and social impact within their businesses.