Employment & skills; the role of community businesses

Amelia Byrne, Research Officer, Power to Change and Melanie Brooks, Research Manager, SERIO, University of Plymouth

What is this research about?

Power to Change are interested in testing their hypothesis that “community businesses improve skills development amongst local people by creating jobs and providing development opportunities for those who would otherwise not actively participate in the local labour market.” Business, employment support and employability have been highlighted as important to community businesses, both as business activities and for their social impact. However, details of the business and employment support activities being undertaken, and if and how these activities result in increased employability, has not been explored. The research aimed to provide new evidence to the knowledge base around how community businesses’ skills and employability development activities contribute to local economic development.

Why is this research important?

Central to the community businesses philosophy is supporting local people, and, in fact, community businesses often seek to appoint staff from the communities they serve, which helps to keep the organisation locally rooted[1]. The Community Business Market in 2019 research showed that one in ten community businesses cite business and employment support, guidance and training as their primary sector[2], with 61% of all community businesses working towards increasing employability[3]. We’ve heard anecdotally that many more community businesses have this focus; that they hope to upskill and bring groups of people closer to the labour market.

Power to Change commissioned SERIO to undertake an extensive study to understand the detail behind these numbers; the types of activities taking place and whether these did contribute to increased employability and local economies. This research is important in the current context of growing interest in local economic development, circular economies and local wealth building. The concept of inclusive growth is highly relevant here: ensuring widespread and good quality paid employment in a local area, often to those who may have otherwise found it difficult to find work.

This report does just that. It explores the ways in which community businesses are providing training to employees, volunteers, and beneficiaries, how community businesses support people into employment and how this work contributes to local economies. The research provides key data to showcase the great work that community businesses are doing in this area.

Challenges of engaging with beneficiaries and why this is important

A key challenge of any research project is engaging with a representative sample of key beneficiaries in order to capture their views and experiences to ensure a full understanding of the research topic in question. This is particularly challenging when you are reliant on the good will of someone else to engage with these people (as they are unable to pass on beneficiary contact details), and even more challenging when this is the good will of an extremely busy community business!

The research team put a number of measures in place to help maximise the engagement of beneficiaries to ensure a good level of response. These included offering a variety of ways to engage in the research, including by email, telephone, or in person during study visits, allowing the research team to be flexible in times and dates for interviews. In addition, an incentive for taking part was offered to encourage engagement. It was felt this would work particularly well to engage with volunteers and service users, thus ensuring a more representative beneficiary sample.

Despite all these measures the primary research was undertaken during the Covid-19 pandemic. This presented additional challenges as community businesses engagement with their employees, volunteers and service users was impacted, both as a result of businesses being unable to operate as normal and employees being furloughed. In addition, the research team was unable to undertake visits planned with the community businesses to incorporate face-to-face interviews with community business representatives and their beneficiaries to help maximise engagement. As a result beneficiary response rates were lower than anticipated, and this was particularly the case amongst service users.

Challenges of good data in community businesses and why this is important

A good response rate that is representative of the population of interest is important in research to enable confidence in the findings. This piece of research was explorative in nature, focusing on 12 community businesses that provided a high quality and well-functioning employment/ skills/ training offer for their beneficiaries, to explore the ways that the development of employment and skills contributes to local economies and the extent of this contribution. The lower response rate achieved amongst beneficiaries presented challenges, particularly when it came to the economic analysis. This was as a result of both low response rates amongst the beneficiaries, particularly service users, and the fact responses were naturally biased towards those who have benefitted from their engagement with the community business or engaged more regularly.

Despite the challenges in obtaining a good and representative response rate from the community business beneficiaries, the key findings from this explorative piece highlight some really positive impacts that the community businesses have on the people they employ and serve within their communities.

Key findings

Community businesses support people who are disadvantaged in some way

 Community businesses aim to support people who are disadvantaged in some way, and provide employment and volunteering opportunities, and support service users, from those belonging to a socio-economic group who are disadvantaged from the labour market.

Community businesses are moving people from unemployment into work

 Community businesses often support people who were previously unemployed or face some form of disadvantage from the labour market who may not otherwise be able to access opportunities available to them. Findings indicate a positive shift in individuals’ situation from their position before being involved in the community business, with reductions in those out of work and looking for paid employment and increases in those volunteering and being in paid employment part-time.

Community businesses understand and are trusted by the local communities they represent

Community businesses are viewed as being embedded and trusted within their local communities, with high levels of knowledge and understanding of the communities they serve and the challenges they face. Providing employment opportunities for local people with similar backgrounds to the local community ensures staff can better relate to the local community the business serves.

Community businesses offer flexibility to staff and volunteers

The community businesses in the research provide employment and volunteering opportunities for local people in the communities that they operate in, which are usually deprived areas, and as a result are often more flexible about the requirements that, particularly volunteers, must meet.

Community businesses provide skills development and training opportunities

In the last 12 months, 65% of employees and 27% of volunteers received formal training while 84% of employees and 48% of volunteers received informal training. This group of community businesses are delivering a comparable proportion of formal training and a greater proportion of informal training as more traditional businesses, despite them potentially having less resources (capacity and finances) to provide training, Furthermore, community businesses are providing these opportunities to paid staff and volunteers who are disadvantaged from the labour market some way.

Community businesses provide more than just training and upskilling

Seven in every ten survey respondents cited increased confidence as a benefit of informal training and 27% for formal training. Other benefits of training include developing new skills and knowledge, in turn enabling them to carry out their role more effectively, and increased employability, helping to move volunteers closer to the labour market or into employment. The training provided to service users provides more than simply new skills; these skills and increased self-confidence enables them to improve, and in some cases transform, their lives.

Community businesses social value predominantly comes as a result of people engaging with the business as a volunteer or service user, rather than through the training provided

The economic analysis highlights that community businesses are contributing to local economies as a result of their employment and skills development opportunities and local people’s engagement with the community business. Based on the data collected it is clear that the social valuation of community businesses is greater than, or equal to, the GVA valuation. The analysis highlights that social value tends to be derived more from the act of regular volunteering and participation by services users than through training.

Hopes for the future

We are thankful to the community businesses up and down the country which maintain their focus on upskilling people and providing good employment opportunities. 2020 has been a difficult year for all, so the support of these businesses is valued more than ever. 2021 may be a further challenging year as we see the end of government support schemes and are facing higher unemployment as a nation.

This report clearly demonstrates the impact that community businesses are having on local areas, people, and economies. We hope that it can be used to highlight the opportunities that community businesses provide and encourage increased recognition of how community businesses are contributing to local economies. We’d like to see increased support for the community business sector more generally, as well as specifically for those offering employment and skills development services as we face what is to come in 2021.

Read the report


[1] Page 37. https://www.powertochange.org.uk/research/community-business-england-learning-power-change-research-institute-2015-19/

[2] Page 3. https://www.powertochange.org.uk/research/community-business-market-2019/

[3] Page 14. https://www.powertochange.org.uk/wp-content/uploads/2019/12/CBM-19-Report-DIGITAL-1.pdf

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