Who earns the most in the social sector… and why?

CEOs in aged care and disability are taking home the biggest pay packets as the sectors try to remain competitive and efficient, Pro Bono Australia’s 2019 Salary Survey reveals.  

The survey, now in its seventh year, found the average salary of a CEO in the NFP sector rose to $133,260 in 2018, up from $129,314 in 2017, with the biggest earning CEOs working in the multidisciplinary services, disability and aged care. 

The average salary for a CEO of a multidisciplinary service was $179,539, compared to  $169,169 for an aged care provider CEO, and $167,751 for a CEO in the disability sector. 

Andrew Beveridge, the founder of survey partner Leadership Today, told Pro Bono News one of the major reasons aged care and disability CEOs sat at the top of the pile was because of the increasing complexity and demands put on leaders to run such organisations. 

“If you look at the disability sector for example, it tends to be paying higher than many of the other sectors because the NDIS has changed operating models, and ways of being financed and delivering services,” Beveridge said. 

He said the complex nature of the services also meant there was a larger operating budget, leading to an increase in the CEOs’ salaries. 

This is reflected in the survey results which found the highest average remuneration for CEOs was for those with budgets of $25 to $50 million ($294,596), while the lowest average remuneration was for those with budgets of less than $500,000 ($110,000).  

Beveridge said the complexity of modern CEO roles was also attracting people from other sectors, which has raised the salary stakes. 

“What we’re seeing generally is that CEO roles are more complex and more demanding than they used to be, so more people in the corporate sector are looking at NFP CEO positions as something that’s attractive,” he said.  

“They also see that their skill sets are going to be really useful in the sector [as there is a move towards the] corporatisation of how organisations need to be run and deliver services. 

“So that makes it both more attractive to candidates and requires more of them in terms of the skill sets that they might bring.”  

John McLeod, the co-founder of JBWere Philanthropic Services, said that over the last few years there has been a shift in how both charities and corporate organisations operate, but that it isn’t the same for all sectors. 

“The corporate sector is trying to include social thinking in the way that it operates in a lot of areas and the charity sector is more and more trying to operate as a business with a social purpose,” McLeod told Pro Bono News. 

“But it’s gonna be far more prevalent in some sectors than others because there aren’t many for-profit organisations in a lot of the sectors, unlike aged care where it’s a 50-50 split between NFP and for-profit.” 

He said it could sometimes be easier for sectors that were not competing against the for-profit world for talent.

“Because you’re not having to pay the sort of salaries that attract a bigger pool of people,” he said.  

Beveridge added it was important for CEOs on those competitive salaries to remember the purpose of the service and organisation they are running. 

“If we can move people in between the NFP and corporate world, then that’s fantastic but the key for CEOs is still recognising that it’s a for-purpose operation, and that it’s not just about delivering a healthy bottom line,” he said. 

“So it’s really about the efficiency of those services, and how they can make the most out of the money that they’re entrusted with, in order to deliver as good and comprehensive services for the people they’re representing as possible.” 

The annual NFP salary survey covered 1,421 cases across 26 positions common to most NFP organisations. 

The highest number of cases covered the role of CEO, with the disability sector recording the highest number of cases in this category (46). Multidisciplinary service providers only made up 2 per cent of respondents. 

Purchase the full 2019 Salary Survey here. 

And if you’re interested in reading more about this year’s Salary Survey and everything it uncovered, check out our breakdown article.