Development sector is subject to global market demands, say insiders
Many international NGOs have found themselves defending the pay packets of their executives recently.
But they may soon be vulnerable on a second front, as criticism grows of hiring habits that can see foreign workers paid many times as much as their local counterparts.
“If they want to promote justice, then they should start with economic justice within their own organisations,” says Malcolm MacLachlan, professor of global health at Trinity College Dublin, who’ll be arguing at a meeting in London next month for development NGOs to move towards a system of ‘one country, one salary’.
Prof MacLachlan’s research has found that expatriate aid workers are, on average, paid four times more than local employees doing similar jobs, with negative knock-on effects for morale and a country’s human resources.
“Not everybody is sensitive to the differences in salary incomes. But those who are, they are likely to think about leaving their jobs and even leaving the country,” said Prof MacLachlan. “This is the irony. You have people talking about increasing capacity, but the way they are doing it is actually decreasing capacity.”
Supply and demand
For some, it’s a simple question of supply and demand. There’s competition for talent, and if you can’t find people in a local labour market, you have to import them and compensate for sending them into an unfamiliar environment, says Warren Heaps, a partner at Birches Group, which carries out surveys on NGO pay around the world.
“Then, you’re actually competing in a different labour market,” he adds. “The reality is, in the development sector, you’re actually competing in a global labour market. Much like the oil industry.”
Some NGOs are experimenting with a single pay scale, but it’s questionable as to whether they’ll still be able to attract quality foreign workers, says Heaps.
“That’s the biggest risk. Because the ex-pats could say, alright, this is a great job for me but I can go across the street and work for these other guys who haven’t done this crazy thing that you’re doing.”
That’s a position that grates with the message of selfless service that international development organisations often spread, and Prof MacLachlan doesn’t think it’s a major issue.
“A lot of people go and work in the sector not because they are motivated by material gain. The argument should be that they should be living in the same way as local people. I don’t think that’s utopian,” he says.
A north-south thing?
Part of the reason that the current system is so contentious is that it is seen as a global north-south divide. But it’s not that simple, say Irish NGOs like Concern Worldwide and Goal. If you have a Bangladeshi country director in Tanzania, he’ll be paid international rates, for example.
Of Goal’s 2,700 staff, 104 from 22 different countries are working at a senior level outside their homelands. At Concern Worldwide, 180 of their 3,000 staff are international workers, about half from countries in the global north and half from the global south.
Goal sets local wages based on local law and practice and international wages in line with other international NGOs, says human resources manager Laura Byrne. But she emphasises that doesn’t mean local staff are invariably paid less than international staff holding the same posts.
“This is simply not the case,” she says. “For a number of reasons – including local employment legislation and maintaining competitive staff packages – there are differences between pay and benefits offered to staff in different country programmes and contracts.”
Concern Worldwide sets pay in a similar way: local pay is based on median local market rates, and their international staff get paid according to the international market rates. But again, it’s not straight forward and is influenced by an applicant’s skills.
Concern’s director of public affairs Richard Dixon points to the local country director of a south Asian country who is paid the same as his ex-pat Scottish predecessor.
“We pay people not based on where they come from,” he says, “but on what the market demands.”
