The social enterprise end game must be outplacement

Phnom Penh is home to several social enterprises. I’m very much enjoying visiting them, meeting people who work there, and thinking about how this handful of enterprises fits into the bigger picture of business in Phnom Penh.

It seems to me that the “start game” for social enterprise is much easier than the “end game.” In the start game we can hire people, train them, treat them well, pay them well—possibly out of line with general market pricing. We do this because we can, because we  believe it’s a good idea and more “profitable” for the society as a whole.

However assuming that the whole economy isn’t going to turn into a “social benefit economy,” but will continue to largely be driven by  bottom line profit, we need to consider a few things:

  • There will never be enough of these special opportunities to be trained by and work for social enterprises–demand will outstrip supply.
  • The end game for a social enterprise needs to basically be about outplacement. Although yes, there is some room in a social enterprise for internally developed management and leadership, that ought to be relative small compared to the much larger number of people moving through the organization.

But consider: if said employee couldn’t get a fair wage before going through a social enterprise’s program, what’s to say that they are going to be able to get a livable wage after? Thus smart social enterprises need to consider how they will set people up to have market power, to get a good wage, especially in a developing country where that can be hard to achieve.

I think that skills based market power is the way to go. Thus to the extent that these social enterprises in Cambodia can set up their workers to gain market power,their “outplacement” will be that much more successful for them.

What do you think? What else must a social enterprise consider in how it fits into the bigger picture of the broad world of business?

Leave a Reply