FUNDING AND REMUNERATION IN SOCIAL SERVICES Funding and Remuneration in Social Services

Irene Y.H. Ng Helen Sim Department of Social Work National University of Singapore

18 February 2011

Acknowledgements: We gratefully acknowledge all participants of this study for the time and thought taken to respond, participate, and provide further comments. We thank Boo Chui Ngoh from the Department of Social Work in the National University of Singapore for assistance with the graduate sample.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Funding and Remuneration in Social Services

Abstract: The Singapore government has taken steps to improve the status of Social Workers in recent years, including salary revisions in 2007 and 2010, and other professional development measures. This article describes the experiences of social service agencies in implementing the changes. It discusses the challenges faced in improving remuneration and staff retention in light of the funding structure of social services in Singapore. Anchored on economic theory, and based on focus group discussions and interviews with 17 field experts, a graduate survey, and data from the Report of Wages, the findings suggest a generally well-resourced and well-organized sector that has managed to keep Social Work salaries on par with other professions. Challenges remain in expanding the manpower pool, distributing resources to different types of Social Workers and between Social Work and other allied professions, and addressing issues related to program-based funding.

Keywords: Social Worker, remuneration, funding, social services, Singapore

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Introduction Recognizing the manpower challenges of the social service sector in light of the growing and increasingly complex needs of needy families in Singapore, the Singapore government has in recent years intervened to raise the status and job conditions of Social Workers. Manpower projections estimate the existing number of Social Workers at 600, and demand at more than 60 per year (Ang, 2010). Measures included salary revisions, sabbatical leave, awards for outstanding Social Workers, and an accreditation scheme. Some improvements seem to be materializing. Ng et al. (2010) and Ng & Sim (2010) have found that many Social Workers have benefited from the salary revisions, especially salaries at entry levels. However, some issues remain outstanding, for instance in terms of the distribution of the benefits and other structural roadblocks from particular program funding models. This study explores how funding systems influence human resource practices in social service organisations, particularly in the area of Social Work remuneration and through the lenses of economic theories. The paper discusses social service agencies’ ability to implement the new measures to improve salaries.

Manpower Crunch in the Social Service Sector Much professional and scholarly discussion has lamented the challenges of manpower shortage and poor remuneration in Social Work. In a study of the Social Work profession in ten countries, namely Chile, Germany, Hungary, India, Mexico, South Africa, Spain, Sweden, the UK and the USA, Weiss-Gal and Welbourne (2008) found that the status and remuneration of Social Workers in all the countries except the UK were much lower than other professionals’. The reasons (not attributable to every country) included insufficient awareness that Social Work requires professional training and expertise, female dominance in the profession, poor self advocacy, public sector employment of Social Workers, a lack of state-level salary directives for Social Workers, and the lack

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FUNDING AND REMUNERATION IN SOCIAL SERVICES of state licensing. In a policy brief on mental health services in California, Midgley and Cohen (2007) attributed the shortage of Social Workers to staff burnout due to poor pay, lack of supervision and support, inadequate training, limited advancement opportunities and rule-bound jobs that preclude creativity and entrepreneurship. In more cutting words, Stoez and Karger (2008) opined that “Social Work salaries have fallen to the point that they more resemble the skilled trades than the professions”, and in Stoez, Karger, and Carrilo (2010) specified that teachers earn 10% more than Social Workers, nurses earn 20% more, and dental hygienists with only an associate or baccalaureate degree earned more than a Social Worker with a graduate degree (p.131). Tied to the above problems of manpower shortage and poor remuneration is limited funding of social service agencies, where Social Workers are employed. Edwards, Shera, Reid and York (2006) found that funding cutbacks had led to deteriorating workplace conditions, and that low Social Work salaries and staff shortages have led to high caseloads and increased stress and burnout. Stoez et al. (2010) explained that worker quality and job experience are secondary to budget exigencies because social service provision is driven largely by budget constraints. While the challenges of limited funding and poor work conditions have plagued the Social Work profession for decades, recent “austerity measures” around the world have resulted in further deterioration through budget cuts, lay offs, and wage freezes (International Federation of Social Workers, 2010); Ryan, 2010; Community Care, 2010; Macklin, 2010). The cuts can be attributed to the recent global financial crisis as well as fiscal crises in several European countries. The Singapore case is therefore an interesting contrast, in that the increasingly difficult environment has led to greater efforts to resource social services instead of cutbacks. A crucial difference is the favourable fiscal position of the Singapore government, where reserves have been accumulated through years of budget surpluses. A similar initiative has also started in the United States, but practical implementation of proposals has not been as wide-reaching as the efforts in Singapore. The National Association of Social Workers (NASW) pushed for a Social Work Reinvestment Initiative in 2008, aimed at “securing

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FUNDING AND REMUNERATION IN SOCIAL SERVICES federal and state investments related to recruitment, training, retention, and research that strengthens the profession and the communities it serves” (NASW, n.d.,p.1). One concrete result of the initiative was the Social Work Reinvestment Act (2008), which committed grants to “review the current workforce shortage challenges” and “determine how those challenges affect the many communities that Social Workers serve” (NASW, n.d.,p.2). So far, the reports that have been published from the Centre for Workforce Studies established by NASW have provided important information on the Social Work labour market in terms of employment, remuneration, and benefits (e.g. NASW, 2010a; Whittaker & Arrington, 2008). However, practical steps such as forgiveness of student loan debt seem to have been implemented in only some states (Stoez et al. 2010; NASW, 2010b), and none of the initiatives are as comprehensive as those in Singapore. There appears to be few analyses on the structure of social services, the funding sources and types, and how these affect progress in recruitment and retention that the reinvestment initiative aims towards. One report in Canada identifies challenges of changing funding approaches that have (a) shifted away from a “core funding model, which funds organizations to pursue their mission” toward “project-based” funding, where contracts “give funders increased control over what the organization does and how it does it” (Scott, 2003, p. xiii), and (b) increased reporting requirements. Some challenges identified as a result of these changes that are relevant to the Singapore experience included volatility in funding; tendency for “mission drift”, as organizations aim to qualify for narrowly prescribed program funding; organizations becoming a series of projects and losing a basic infrastructure; reporting overload; and human resource fatigue to meet the new challenges yet remain faithful to organizational mission. The report, however, does not discuss the effects of the funding changes on staff remuneration. The present study on the case in Singapore investigates these structural and funding issues, providing illustrations for how improving certain structures might help to address the salary and manpower problems in the sector. In Singapore, more than 400 voluntary welfare organizations (VWOs) serve about 400,000 service users annually (Ministry of Community Development, Youth & Sports, 2010a). VWOs which

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FUNDING AND REMUNERATION IN SOCIAL SERVICES employ Social Workers include family service centres, youth-focused agencies, homes for the aged, residential homes for children, special needs schools etc. Besides working in VWOs, many Social Workers are also hired as medical Social Workers in hospitals. Each of these organizations has their own funding sources and ways of paying the Social Workers they hire. In recent years the government has introduced several measures to improve the work status and conditions of Social Workers in Singapore. Salary revisions were given in 2007 and 2010; a sabbatical leave scheme (SLS) and a professional and leadership development scheme (PLDS) introduced in 2008, and an accreditation system initiated in 2009. The benefits and challenges encountered by VWOs in implementing the salary revisions will be analysed in this article.

Theoretical Framework The theoretical anchor for this research on the structural barriers to improving recruitment and retention in social services can be summarized by four basic economic theories: (i) compensating wage differential; (ii) market failure of third party payments and funding; (iii) government failure in resource allocation; and (iv) constraints of limited resources in social service agencies. Addressing manpower issues in the sector begins by recognizing and understanding the nature of these problems as informed by economic theory. These economic principles were also highlighted by Barth (2003) and England, Budig and Folbre (2002). The main theoretical foundation of this piece of research on Social Workers’ salary and job conditions is a Model of Compensating Wage Differential detailed in Ng (2010). The crux of the model is that an employee decides to take up or stay in a job based on a joint consideration of the relative salary and the amount of “risks” or stress the job entails. Three points should be noted of this premise. First, the influences of salary and stress on the employee’s job satisfaction are not independent, but jointly determined. Second, for mission-driven jobs such as Social Work, many enter the profession willing to accept low wages and high “risks” of emotionally charged work. Therefore, a lower salary level for Social Workers can be expected. Third, however, the salary level

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FUNDING AND REMUNERATION IN SOCIAL SERVICES cannot be too far from other professions. Relative salary, and not just absolute salary, is important to whether people stay or leave. Even with very passionate Social Workers, if remuneration is too far short of those in other sectors, some will leave, especially when burnt out from difficult and intense work. Figure 1 illustrates the above points in a graph. The vertical axis represents the missionmindedness of a Social Worker. For simplicity, let us also assume that a more mission-minded Social Worker is also willing to absorb more stress. The horizontal axis represents the amount of difference in salary levels of Social Work relative to similar professions. In Singapore, teaching or civil service, for example are popular alternative careers that Social Work graduates choose. As the curve indicates, a very mission-minded Social Worker is willing to accept a large salary gap with other professions. Such a person is at point A of the curve. However, as the mission-mindedness of the worker decreases, the salary gap he or she is willing to accept decreases. Hence, the Social Worker at point C has low mission-mindedness and accepts only a small wage gap; the Social Worker at point B with a moderate level of passion accepts a salary difference that is between that of A and B.

Mission-mindedness

A B C Salary gap

Figure 1. Illustration of Compensating Wage Differential

Such an abstraction is obviously limited by the two dimensionality of the chart. However, the abstraction is helpful to elucidate several important points. First, retention of Social Workers in

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FUNDING AND REMUNERATION IN SOCIAL SERVICES social services can be achieved by either increasing mission-mindedness or salary, but only to some extent if only one or the other is targeted. Factors such as improved education and supervision to help Social Workers cope with high work stress has been found to be important to improved job satisfaction and job retention (e.g. Fakunmoju et al. 2010; Cohen & Gagin 2005; Benzur & Michael 2007), but the Compensating Wage Differential model suggests that these non-monetary interventions have limited effectiveness without at some point addressing salary shortfall (see Ng 2010 for detailed explanation of the implications of the Model to empirical specification and findings). The concavity of the curve shows the economic principle of decreasing marginal returns. As the difference in wage gap increases, it becomes harder and harder to increase the missionmindedness of Social Workers (note the horizontal equidistance and increasing vertical distance from C to B to A). They become bogged down by the lack of extrinsic rewards, and only very few with the highest level of passion are able to sustain their mission focus. Put in another way, while most Social Workers are willing to accept lower salary, only a few of the most mission-driven are willing to accept large wage differences. The model therefore explains the familiar picture in social services of acute manpower shortages with a few passionate albeit burnt out heroes and heroines. It also suggests that if society wishes to expand social services, as is the case in Singapore, it must address salary issues, and not just rely on motivation and education. The second economic theory suggests that government intervention is required to raise Social Work salaries in order to attract and retain staff. In a usual market economy, if demand exceeds supply, the shortage will push up prices. However, although there is shortage in Social Workers, Social Workers’ salaries remain low. The clients they serve are usually poor, and their salaries are paid through funding from donors or the government. Such third party payment does not adjust according to stronger or weaker demand from clients. Hence, high demand for Social Workers’ services is not signalled by higher prices paid to them. This market failure problem requires government intervention.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Government intervention, however, introduces new problems. The salary set by an entity in authority is after all set artificially, and does not adjust automatically to demand and supply. It will require the government to collect a lot of information in order to set the right price and allocate the right resources. Often, the set prices and quantities are not right, leading to shortages or surpluses. Hence, government failure results in inefficiencies, skewed incentives, gaps in services, and lags in responses. Finally, social service agencies are highly limited in resources. If they were not, they could by themselves pay higher wages to retain good staff, although the ineffectiveness of the price mechanism to signal demand might still hold wages below their true market value. By this principle, all things equal, more resource-rich agencies should be able to retain staff better.

Methodology This study analyzes the progress of the salary revisions in two ways. First, it compares salary levels of Social Workers in the last few years. Data for this came from two sources. The first is a survey of the 2007/08, 2008/09 and 2009/10 graduates of the Social Work Department of the National University of Singapore. The second is from aggregate data reported by the Ministry of Manpower of monthly salaries of different professions. The second and main focus of our study is on focus group discussions (FGDs) and interviews with key practitioners and heads of funding agencies. The salary comparisons provide the backdrop for analysis of the progress of the salary revisions found from the FGDs and interviews. Retrospective approval for the research was granted by the University Institutional Review Board in 2009, with an amendment to include the focus group portion in 2010.

Graduate Survey The survey, started in 2008, surveyed NUS Social Work graduates for their first job and salary levels. Contact information of graduating students were collected a month before the end of their

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FUNDING AND REMUNERATION IN SOCIAL SERVICES last semester. They were then contacted by e-mail in September, and asked to give their occupations and salary levels. September would be four months after graduation, by which time almost all had started their first jobs. Only results from honours’ year graduates are reported, as response rates from those who graduated without honours (i.e. graduation after three years of study) were low and the sample therefore felt to be biased. The numbers of respondents from the Honours’ cohort were 24 (out of 49), 32 (out of 41) and 20 (out of 27) respectively for 2008, 2009 and 2010. These represented response rates of 49%, 78% and 74% respectively.

Focus Groups and Interviews with Senior Social Workers and Administrators A total of three interviews and three focus group discussions (FGDs) were conducted from July to September 2010. For the perspectives of VWOs, FGDs were conducted with representatives from a range of organizations funded under different models where Social Workers might be hired. The focus groups were clustered by agencies with similar scope of services or funding sources and were scheduled to last two hours. FGDs were felt to be a desirable data collection method for three reasons. First, the social service sector in Singapore is fairly small and cohesive. Agencies are used to getting together to share insights, and no big potential conflicts were expected. Second, a large portion of the requested information is factual and non-sensitive. Third, where opinions were shared, FGDs allowed participants to elaborate on, agree or disagree with each others’ points, and brainstorm new ideas. However, one VWO representative who could not attend the FGDs was interviewed. The funders’ perspectives were collected via individual interviews with representatives from two government funding bodies - the Ministry of Community Development, Youth and Sports (MCYS) and the National Council of Social Services (NCSS). Each interview lasted an approximate 90 to 120 minutes.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES To protect participants against any discomfort at sharing anything sensitive, they were told, at the start of the focus group or interview, that they could stop their participation at any time, and that they could follow-up with a telephone call or an e-mail to the researchers. For all the interviews and FGDs, one author facilitated while the other took notes. Some interviews and FGDs were followed by clarifications, further questions and answers, and requests for information, by e-mail. After the data collection was completed, the two authors independently identified major themes before discussing and matching common themes. Finally, participants also reviewed the manuscript and checked the accuracy of information about their agencies.

Profile of Respondents A total of 14 representatives from 10 VWOs and 3 representatives from two funding agencies participated in the study. The median years of experience in the social service sector was 18 years. All participants except one were either top persons (e.g. CEO, Center Director) or senior representatives (e.g. Human Resource Manager, Department Head) of their agencies. Table 1 provides the profile of the respondents.

Table 1. Profile of respondents (N=17) Years of experience in social services Mean Median

Years 16.4 18

Organisations working at Self-help groups Family service centres Youth organisations Funding and policy bodies Hospitals and medical-related organisations Special education and disabilities

No. 6 2 2 3 2 2

Positions held Chief Executive Director Head of Department/ Senior manager Executive

No. 2 11 3 1

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FUNDING AND REMUNERATION IN SOCIAL SERVICES

The organisations where FGD participants worked included two family service centres (FSCs), two youth agencies, three ethnic-based self-help groups (SHGs), one hospital, two community-based medical-related agencies, and one school-cum-community-based agency. FSCs are communitybased social service agencies that serve families residing in their localities. Partially funded by the government, these centres provide casework and counselling as well as information and referral services (MCYS, 2010b). Youth agencies in Singapore provide a wide spectrum of services catering to children and youths in and out of the school context. One of the youth agencies in the focus group specialises in school-based Social Work and the other specialises in outreach work with youths at risk of juvenile delinquency. Participants from FSCs and youth agencies were grouped together for the FGD because the two sectors often offer an overlapping range of services. For example, many FSCs also offer youth programs that youth agencies specialise in. The three ethnic-based self-help groups in Singapore, namely Yayasan Mendaki (MENDAKI), Chinese Development Assistance Council (CDAC), Singapore Indian Development Association (SINDA), were included as they provide an interesting comparison due to their funding sources and services. They formed the second focus group. Self-help groups were set up in the 1980s and 1990s (Ho, 2003) because it was believed that certain challenges might be better met and handled within each ethnic community where there is greater understanding of cultural nuances and needs (MOE, 2008; Chang, 2010). They provide similar services to other VWOs, but might not do so through Social Work positions. Their funding model is also different. The final focus group was a loose mix of participants from the “health” and “disability” sector. It was made up of three participants from a hospital and two community-based medicalrelated agencies (one serves children with cancer and the other serves the physically disabled population).

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Results Sources and Types of Funding Agencies that participated in the FGDs had a range of the types and sources of funding, although most received government funds. Sources of funding included the government, the Singapore Totalisator Board (the Tote Board), the Community Chest (the fund-raising arm of the NCSS), and other corporate and individual donations. Figure 2 shows the funding positions of the participating agencies on a continuum of full government funding on the left and full self-funding on the right. The hospital and special needs school are placed leftmost on the continuum. While government restructured hospitals generate some income themselves, they continue to receive the bulk of their funding from the government. In particular, Social Work salaries in the hospitals are laid out clearly under the Ministry of Health for the hospitals. They do not depend on specific programs or grants. Similarly, the school-based Social Work of the special needs agency is fully-funded by the government and the community chest.

Hospital Special needs school

FSCs Youth organization B Community-based disability agency Community-based portion of special school Self-help groups

Fully government funded

Partially government funded

Figure 2. Funding continuum of participants’ organisations

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Community-based medical related organization serving children (100% self funded)

Youth organization A (about 75% self funded)

Self-funded

FUNDING AND REMUNERATION IN SOCIAL SERVICES On the opposite end of the continuum are two agencies that are mostly self-funded: the community-based organisation serving children with cancer which is almost 100% self-funded and youth organization A which is 75% self-funded. Both are highly mission-driven, but the two are very different in their fund-raising techniques and wealth of resources. The organization serving children with cancer admits that its “sexy” cause of children with cancer draws resources, and so insufficient funding is not a worry. Youth organization A, however, has tight resources. As a faith-based organization, its staff raise their own salaries by appealing to donors themselves. Driven by the mission to serve at-risk youths, it also runs government-funded youth programs, from where the 25% of government funding comes. The self-help groups are also mostly funded by donations. Their funding model, however, provides a steady and secure stream of funding. As service provider of each ethnic group, a small portion of the salaries of all employed Singaporeans is automatically deducted as contribution to the self-help group of their ethnicity. Individuals who do not wish to participate in the deduction apply to opt out. With the donation as default, the arrangement ensures a steady stream of income to self-help groups in proportion to the size of their communities. In addition, the government matches the donations up to a cap. The other agencies—namely the FSCs, youth organization B, the disability organization, and the community-based part of the special needs organization—are grouped together in figure 2 as they are resourced mainly through NCSS via a funding partnership by MCYS, Tote Board, and Community Chest. The MCYS-Tote Board-Community Chest partnership is based on a funding principle that can be summarised by the phrase “many helping hands”. The principle hinges on the belief that those who need help in society should be helped by many different groups, including one’s personal networks such as family and friends; community organizations such as social service agencies; public agencies such as Community Development Councils; and private sector partners such as corporations and foundations. As articulated by MCYS, the reasons for the subsidy model

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FUNDING AND REMUNERATION IN SOCIAL SERVICES include service providers being the frontline with the passion and dedication, being able to respond fast, and provide a diversity of approaches (MCYS, 2010a). Based on this principle, MCYS funds 90% of VWOs’ capital expenditures (increased from 8020 in 1995 and from 50-50 in 1991) and 50% of their recurrent expenditures (NCSS, n.d.). Hence, the government supports through heavily subsidizing VWOs without itself giving the direct aid. For the remaining amounts, many VWOs also receive funding from the Tote Board and through the Community Chest. Until recently, the funding from the three partners provide for 100% of an FSC’s expenditures. However, the Tote Board has stipulated a new ruling that FSCs must raise 1% of their own expenses (MCYS, interview, 30 Aug 2010). Much of the policy initiatives by MCYS are channelled to the VWOs through the NCSS. Besides acting as the connection between VWOs and funders in terms of the administration of funds, NCSS is also the direct point of contact for the development of programs and manpower with VWOs. In the many helping hands model, NCSS is hence able to work with the VWOs holistically in disbursing the monies from the various sources, and developing and delivering the programs for which the funding stipulates. The main types of funding received through NCSS by participants’ agencies were program and per capita funding by MCYS in partnership with Community Chest and the Tote Board. Besides these, a few agencies also received funding from other Ministries that follow a different model. For example, special schools for students aged 7 to 18 are funded fully by the Ministry of Education and the Community Chest, and one of the FSCs runs a program that is funded based on manpower count, supported by the Ministry of Home Affairs.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Impact of Salary Revisions FGDs. When the salary revisions were implemented, NCSS put out a set of guidelines that were pegged against those for MSWs. In the past, VWOs mostly set their own salaries, but with the salary revisions announced, there was pressure to keep up with the rates in the guidelines and pay competitive salaries. All the agencies except the agency serving children with cancer and youth organization A followed the NCSS guidelines. This included the FSCs, youth organization B, the special needs organization, and the disability organization. The SHGs used NCSS guidelines as a reference in their own salary revision although they do not come under the umbrella of NCSS. The other two agencies that were mostly self-funded were illustrative of two very different human resource practices in independent agencies. The organisation for children with cancer had chosen to peg itself to the MSW salary structure two years ago. It had to match up as their staff worked side-by-side with MSWs in the hospitals. However, salaries of executives continued to follow NCSS’ guidelines. Youth organisation A, on the other hand, does not follow the revised guidelines at all. In the words of the FGD participant, “we are purely mission-driven”. Its salary model is needsbased in discussion with the staff (e.g. marriage and starting a family). The agency’s salaries are therefore low. Besides setting guidelines for the salary revisions, MCYS committed a budget to be distributed to Social Workers to lift wages up. The money was given through NCSS in lump-sum amounts to VWOs, and it was up to the VWOs to distribute the money to their staff. For the first round of revisions, some agencies spread the money given by MCYS to all staff, and so Social Workers did not receive the full amount. In addition, the salary revision also appears to have benefited the younger workers more than the older ones (Ng et al., 2010). For the second round, NCSS took steps to work with individual organisations to cajole them into making the necessary revisions for their Social Workers. It circulated a letter which chairmen of agencies were to sign so that they would revise their salary scales according to the higher funding allocation guide provided by NCSS. With salary revisions stipulated for seven job categories--namely

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Social Workers, heads of agencies, executives, clerical officers, workshop instructors, nurses, and general workers-- some agencies revised only the salaries of the designated job types, while others found alternative sources of funds to make other allied professionals on par. Agencies represented in the FGDs also made more attempts to apply the revisions for more senior staff. Indeed, parity between junior and senior staff, and between Social Work and non-Social Work staff seems to be an issue that participating VWOs grappled with as they made decisions about salary scales of different professionals in the agencies. While recognizing the parity issues, funders discussed the challenges in expanding the salary revisions to other occupations in the sector. While the job scope of Social Work falls squarely within voluntary welfare services, the scope of other jobs common in social services, such as psychologists and counsellors, is less clearly bound within the voluntary sector. Graduate Survey. The starting salaries of the honours’ cohorts of 2007/08 to 2009/10 appear to follow the economic trends and salary revisions in the past three years. Ng, et al. (2010) has observed that the starting salaries of the 2008 cohort were comparable to the median wages of all Social Workers in a survey of SASW members in 2008. It concluded that starting salaries had improved since the salary revisions of 2007. Table 1 shows a slight decrease in overall salary levels of Honours’ graduates from 2008 to 2009 (when Singapore was experiencing a recession), and a slight increase from 2009 to 2010 (when the next salary revisions were implemented). However, the differences were statistically insignificant. Further, FSCs have gone beyond Medical Social Work in offering higher starting salaries. While the starting salary in NCSS’ 2010 guidelines of $2,400 is $100 less than the $2,500 for MSW, the actual mean FSC starting salaries of the 2009/10 cohort was higher than MSWs’. In terms of distribution of the job sectors, Table 1 shows that most graduates have started out in FSCs or MSW. Table 1 also shows that very few respondents have entered non-Social Work jobs. This might be a result of lower response rates from honours’ graduates who have not entered Social Work. The response rates, however, cannot be too low for this group as the overall response

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FUNDING AND REMUNERATION IN SOCIAL SERVICES rate is high. The e-mails sent to graduates also requested clearly for a reply whether graduates had taken a Social Work or non-Social Work job. Even if all the non-responses were from graduates who had not taken up Social Work jobs, graduates who did not become Social Workers would comprise less than 30% of their cohorts in 2008 and 2009. Table 1. First Job Salaries by Sector of 2007/2008, 2008/2009 and 2009/2010 Honours’ Graduates 2007/2008 N Mean Social Work Sectors Family Medical Government Others Overall Non-Social Work jobs

6 6 2 10 24

S$2,550 S$2,550 S$2,450 S$2,530 S$2,533

0 -

2008/2009 N Mean

N

2009/2010 Mean

9 11 2 8 30

S$2,484 S$2,574 S$2,489 S$2,365 S$2,485

7 9 0 3 19

S$2,686 S$2,550 S$2,517 S$2,595

2

-

1

-

National Report on Wages. The analysis of new graduates above shows that each cohort’s salary levels have at least kept pace with the salary revisions and economic outlook. What about salaries of all Social Workers in general, not just beginning Social Workers? Table 2 shows the median monthly salaries of Medical Social Workers, Social Workers and other professionals taken from the National Report on Wages in Singapore from 2006 to 2009. It indicates no perceivable impact of the salary revisions on Social Workers’ salaries relative to other professions’. If there was an impact, it was simply to prevent Social Workers’ relative position from lagging further; it has not closed the gap of Social Workers’ salaries relative to those of other professionals. Although it shows some jumps in salaries during the period 2006 to 2009, it is unclear which of these were due to the salary revisions, if at all. Further, the fluctuations in Social Workers’ salaries had the same pattern as those of nurses, another caring profession. However, the changes for nurses were bigger, and for every year, median salaries of Social Workers trailed those of nurses’. Compared to the median wages of all professionals, the last two columns of the ratios of the salaries of Social Workers to those of all professionals show that Social Workers’ salaries continue to be about 60% of the salaries of other professionals (70% for Medical Social Workers). Even in the aftermath of an economic

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FUNDING AND REMUNERATION IN SOCIAL SERVICES recession in 2009, when average salaries of all professionals decreased and those of Social Workers increased, Social Workers’ salary levels were 59% of the rest. The Report of Wages ranked Social Workers’ salaries the third lowest in 2007, and the second lowest in the other years. It remains to be seen what impact the revisions of 2010 will have.

Table 2. Median Monthly Wages, 2006-2009 Social Work

Years 2006 2007 2008 2009

Nursing

(1)

Medical Social Work (2)

(3)

All professionals (4)

S$2,303 S$2,432 S$2,476 S$2,604

S$2,792 S$2,600 S$3,118 S$3,160

S$3,113 S$3,369 S$3,077 S$3,416

S$3,870 S$4,030 S$4,405 S$4,375

Ratio to all professionals Social Work (1)/(4) .60 .60 .56 .59

MSW (2)/(4) .72 .65 .71 .72

% Change 2006-7 5.60% -6.88% 8.23% 4.13% 2007-8 1.81% 19.92% -8.68% 9.31% 2008-9 5.1% 1.35% 11.01% -.68% Note. Source: National Report on Wages in Singapore, Ministry of Manpower, 2006-2009.

Challenges of Funding Models The challenges on human resources depend on the sources and nature of funding received by agencies. The challenges experienced by research participants in the midst of implementing the salary revisions are summarized into four main themes below. Service model prescriptions. Program funding requires that agencies abide by the prescribed service models, which affect remuneration and staffing. In particular, the models state the number, type and grade of staff. Funding is given at the median wage of that grade of staff. Prescribing a service model which agencies are to abide by for funding came across as restrictive to some of the participants. The respondent from the special needs sector gave the example that running day care centres for the graduates of students from special schools required Social Workers. However, the current service model does not factor in a Social Worker, as it is still

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FUNDING AND REMUNERATION IN SOCIAL SERVICES based on an old regime where the role of day centres was babysitting. The respondent felt that with improvements in special education, students ageing out of schools need and can be taught to live more independently. In response, NCSS has extended co-funding of Social Work positions in six day care centres. Still, not all centres have a Social Work position, and the service model itself is not changed. The unchanged service model was attributed by the interviewee to differences in priorities between the government and ground practitioners. Service models might also prescribe a lower job grade (i.e. lower salary scale and more junior) for a position than what the organisations think they require. Funders, however, pointed out that there are regular discussions and feedback with agencies regarding service models. For example, tiered funding of FSCs was introduced after feedback that standardized amount of funding disadvantaged FSCs with higher volumes of cases. Time, however, is required for the process of consultation, and frequent changes to service models might create problems for agencies. Funders likened the frequent changes in outcomes to a shifting “goal post”. Mid-point funding.

Interviewees from funding bodies felt that mid-point funding is an

efficient and fair method of setting aside resources for funded programmes. Agencies typically have a spread of staff in terms of seniority, so on balance their payroll expenses should be about midpoint. In fact, it was observed that given the high turnover in social services, most agencies are “young”; their staff tended to have more new than senior staff. Hence, the mid-point funding is more than sufficient. In addition, agencies are not bound by the model. They are free to keep on payroll more experienced staff and pay their staff more than the amount in the guidelines, although they have to raise their own funds to do so. NCSS has also worked with agencies to improve human resource practices. However, funding by mid-point was viewed by some participants as “punishing” good agencies who are able to retain staff and “rewarding” bad agencies which face high turnover. Funding certainty and sufficiency. Funders indicated that given the needs of society and as long as agencies are doing their jobs, funding is almost guaranteed. In contrast, participants from the

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FUNDING AND REMUNERATION IN SOCIAL SERVICES VWOS vocalized funding uncertainty and insufficiency. The disjoint in views might be a reflection that while overall funding for the sector and specific populations is secure, funding by program is less certain. For example, for per capita funded programs such as Guidance Program (GP), a program for first time offenders, and Enhanced Step-Up (ESU), a program dealing with early school leaving issues, funding is given according to the number of clients served. The agency therefore takes a risk when hiring a full headcount and in the end, having an insufficient number of clients to justify the headcount. The GP program depends on the number of cases mandated to GP by the police, and ESU depends on the number of cases referred by schools. Agencies running ESU therefore have to do a lot of outreach to schools, and even then, there are structural hurdles in the school system that prevents referral, but which VWOs have no control over. However, participants from youth agencies in the FGDs have taken on these programs anyway, because of their mission to serve youths. In contrast, one of the participants’ FSC refused to do ESU because of the uncertainties. Instead, it took on a program that funded a headcount to service a hotline for teens-in-need. The FGD participant expressed a preference for such kinds of funding. Therefore, while agency mission drives programs, it also constrains them to certain funding sources. Donors’ and funders’ expectations. Another hindrance agencies faced that prevented them from remunerating staff more was donors’ expectations and at times specification that their donations be used directly on clients and not on manpower costs. In all the FGDs, participants expressed frustration that the public did not understand the labour-intensive nature of human service, that it is impossible to uncouple manpower costs from service costs, and that effective work means investing in good staff. At least one participant in each FGD opined the need to educate the public on the importance of investing well in manpower for effective work. It was also generally felt that donors and boards increasingly understand this important aspect. The acceptance of the need to spend more on manpower, however, seems to be accompanied by high expectations of staff output. There were discussions about the difficulty of

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FUNDING AND REMUNERATION IN SOCIAL SERVICES pushing a staff to a next grade in order to justify paying the person at the next level of mid-point funding. There were also examples that the quality of staff in VWOs do not seem to justify much more injections of funds to remunerate them. There seemed to be a lack of clarity of what the expected outcomes should be.

Effects of Funding Challenges on Recruitment and Retention The results from the graduate survey that was presented earlier suggests that in 2010, there were FSCs willing and able to pay more than the guidelines to attract Honours’ graduates, who are considered the cream of the crop. Yet, some other agencies are not able to do so, and a few participants from VWOs lamented the inability to compete with the higher starting salaries of hospitals. Further, even with higher starting salaries, two participants had ongoing job vacancies advertisements as they had not been able to hire any new Social Work graduates in the past year. There was uncertainty of what a reasonable remuneration would be. One participant from a funding agency opined that teaching was more demanding than Social Work in general, hence justifying the lower level for Social Workers than teachers. On higher Social Work salary levels for Medical Social Workers than other Social Workers, the general sentiment seemed to be that the nature of work is more urgent and short-term, but not necessarily more demanding. One participant further noted that besides higher salary levels, MSWs have access to resources and multidisciplinary and varied work in the large hospitals. Stand alone centres such as FSCs cannot offer these benefits. With the challenges of a flat salary structure and career progression path, participants shared several ways that they have tried to retain staff. While they might not be able to provide hefty remuneration, they tried to make it up through non-wage benefits (e.g. birthday leave, and child care leave) and family-friendly practices (e.g. flexible working hours). Some respondents also pointed to the building of a supportive work culture through team-building activities such as celebration of certain common festivals. Given that the majority of employees in social services are women, many with families, these non-wage benefits have been valued by staff.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Participants at the FSCs-Youth and Disability-Medical FGDs also discussed ways to expose staff to different experiences through staff exchange and job rotation within and without agencies, and across sectors. These were felt to help upgrade the skills of staff and increase their motivation and passion, especially those from smaller agencies. Funders similarly pointed to the importance that VWOs improve their human resource management in order to recruit and retain staff (MCYS, interview, 30 August 2010). Suggestions given by funders included proper supervision, job rotation, and improved budgeting and remuneration practices. Funders however acknowledged that smaller agencies might face more challenges in this area as the possibilities of staff movements is likely limited by the agency size.

Discussion

Market Failure and Compensating Wage Differential In the midst of budget cuts and wage freezes around the world, Singapore has taken the bold step to raise the status of Social Workers. It has realized the need to recognize the contribution of Social Workers to a society that is increasingly complex. The manpower shortage in the sector has led to various initiatives to increase recruitment and retention of Social Workers. This study focused on the efforts at improving recognition through better remuneration. According to economic theory, the government-led efforts are necessary to correct the market failure problems where a price mechanism is absent to signal to third party funders the need for more Social Workers. Government intervention is needed in order to provide the commensurate rewards to increase the supply of Social Workers. The way the Singapore government has worked with agencies to revise salaries and salary scales is instructive. For other sectors such as education, teachers’ salaries are generally fixed by the Ministry of Education. However, unlike schools, VWOs are independent of MCYS. The authorities cannot enforce that agencies adopt the salary guidelines. Yet, from the FGDs, most VWOs have

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FUNDING AND REMUNERATION IN SOCIAL SERVICES followed the guidelines. NCSS going round to work with the various agencies for the revisions probably had an effect. Besides, manpower shortage forces agencies to keep up or lose out. The “moral suasion” method adopted by NCSS also nips the incentive problem of lump-sum payment in the bud, by obliging agencies to keep to what the funding is allocated for. Indications from the FGDs are that some agencies have kept the allocated funds for Social Workers this round, and also taken pains to ensure that senior staffs get their deserved increments. The Compensating Wage Differential model further suggests two ways in which government intervention can proceed. First, efforts must improve both mission-mindedness and remuneration. Educating Social Workers to have the right values and mission-mindedness to serve despite low extrinsic rewards is important. To this end, it is heartening that the results from the graduate surveys suggest that the majority of respondents have chosen Social Work as their first career. Somehow, students who chose Social Work as their major believes in its mission, and have stayed on their mission as they graduated instead of being enticed by higher salaries elsewhere. Given the manpower shortages, the questions are to what extent the sector is able to retain the Social Workers, and how Social Work education can, together with the professional organizations, attract more students to study Social Work. Returning to the Compensating Wage Differentials Model, one way to increase the number of Social Work majors is in public education and pre-education so that incoming students understand what Social Work is, and sees it in a favourable light and as a viable career option. When they become Social Workers afterward, they must continue to be wellequipped with the skills and values, to be strengthened in their mission to serve. However, improving mission-drivenness reaches a limit if remuneration is not also improved. In addition, with the goal to increase the pool of Social Workers, the law of diminishing returns implies the impracticality of not addressing low salaries. Very few individuals are so persistently mission-driven that they are willing to accept low salaries for an unlimited duration. Increasing the number of Social Workers also means expanding the pool to less and less mission-driven individuals,

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FUNDING AND REMUNERATION IN SOCIAL SERVICES and hence remuneration must be adjusted. Two sets of findings from this study suggest further work required to tweak the extent of salary adjustments made for the sector in Singapore. First, salary levels reported by the Ministry of Manpower indicate that Social Work salaries have kept pace with the salaries of other professionals. However, if the number of Social Workers is to be expanded, the current revisions look insufficient to keep pace with the overall wage trends in Singapore. Second, the benchmarking of salaries might need to be reviewed. Medical Social Work seems to be pegged a little below teaching (Ng et al. 2010), and the NCSS guidelines tend to trail the MSW scales. The sentiment that teaching is more demanding than Social Work, and that Social Work in hospitals is more pressurizing than in other settings, is based more on opinion than documented research. That hospitals and schools paid more is probably due to the practical reality that these institutions have more resources and are more co-ordinated. Given that MCYS has initiated revisions that the sector in general has embraced, these reasons might no longer hold. A revision that truly makes a difference to attracting more to join and stay in Social Work might require larger increments than currently. The changes should be viewed as market corrections, and not just increments. Further, some forward-planning in the timing and implementation of future revisions can help to pre-empt revisions in other sectors (such as teaching, civil service, and medical services) that pulls Social Workers’ salaries farther behind again.

Government Failure and Skewed Incentives The challenge of setting the right “price” for Social Workers’ wages illustrates the third economic principle of government failure that results in skewed incentives. This played out in human resource issues raised by FGD participants. For instance, mid-point funding does not build in adjustment for the type of staff. The incentive mechanism is thus towards hiring junior staff because they are cheaper. The incentive is also towards giving low increments to senior staff. Profit making companies will pay good staff more to retain them because their revenues and profits are directly

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FUNDING AND REMUNERATION IN SOCIAL SERVICES affected by staff output. However, mid-point funding of non-profit programs means that program funding does not change when the agency chooses to spend more on payroll. Hence, non-profits do not have the incentive to pay senior staff more or spend more to retain good staff. In fact, while the agency that spends more to retain good staff will have to expend additional energies to raise funds for their staff, the agency with high turnover will spend less than the mid-point on remuneration and enjoy savings. By theory, the latter type of agency has lower quality staff and services, but they benefit from lower costs. One initiative by NCSS helps to counter this problem. Its program evaluation system requires agencies that receive funding through NCSS report their outcomes to NCSS (NCSS, 2010). In this way quality and standards are maintained, and agencies are prevented from a “race to the bottom” of hiring the cheapest staff and providing the minimum services. However, one endemic difficulty in social services is in measuring effectiveness and outcomes. Unlike in the production of tangible goods, where a staff whose output doubles that of another staff can be justifiably paid double, the same cannot be said for Social Work. The nature of the cases handled by Social Workers is multi-faceted and hard to quantify against outputs. Productivity measures as exercised in the market cannot be applied in this setting. It might be possible to extend the current evaluation system to one that factors in retention of quality staff as part of its outcomes management. To accurately reward agencies that perform well, performance can be tied to not just the receipt of funding, but also the amount of funding. NCSS can give different levels of funding to high performing agencies with experienced staff than other types of agencies. However, there are potential problems to every new suggestion, among which might include additional paper work, the difficulty of measuring individual staff output, and micro-management of intra-agency practices. Nevertheless, suggestions such as these above can be further explored as ways to enhance outcomes management in order to better reflect effectiveness. Besides the issue of mid-point funding, the prescribed service models might need more consistent reviews on one hand, or more flexibility on another. Despite periodic reviews cited during

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FUNDING AND REMUNERATION IN SOCIAL SERVICES the interviews and FGDs, there were sentiments that some service models continue to be out of step with ground reality and processes. Reviews might need more responsiveness to ground changes to align with the level of professional help needed for the program. If responsiveness is not practicable, the extent and specificity of the prescribed models might have become too rigid and might need to be reduced. These kinds of changes are important to reduce hardship among agencies in complying with one set of requirements (e.g. revised salaries) while receiving inadequate support towards compliance by another set of requirements (e.g. the funding given in prescribed service models).

Unintended Consequences of Salary Revisions The salary revisions seem to have benefited the Social Work profession in two ways. First, Social Work salaries seem to have kept pace with industry norms, although not improved it above its bottom ranking. Second, higher proportions of fresh graduates seem to be joining the sector than in the past. From the graduate survey, we estimated as a lower bound that 70% of honours’ graduates in 2008 and 2009 chose Social Work as their first jobs. This compares favourably with the 57% found by Lee and Goh (2003) from a survey of graduates who had graduated in the previous four years from 1996 to 1999. The revisions, however, might have led to other unintended consequences. We discuss two. First, might the focus on salary have set off a price war where the agencies that are most willing (and able) to pay higher salary levels get staffed at the expense of other agencies? The graduate salary results where the mean of FSCs’ salaries have surpassed salaries of MSWs, and the general view in the FGDs that Medical Social Work has been more successful in hiring because of the higher pay and resources, imply that some of this competition might be happening. Further, one FGD participant from a smaller VWO who experienced the difficulty of competing with bigger and more resource-rich agencies, observed that there seems to be higher turnover within the sector in the recent few years.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES From a macroeconomic perspective, such competition is good, and is part of corrections in a market with labour shortages. However, three characteristics of the Social Work labour market suggest that such competition will still result in human resource allocation that is far from optimal. One, Social Work jobs are generally similar in terms of work with needy populations and many new graduates do not have strong preferences over the client group and the nature of work. Two, there is acute shortage of Social Workers. Three, agencies with tight resources are able to just keep to the salary level given in the guidelines. Combined, we have many agencies doing similar types of work, possessing different amount of resources, and competing for the limited pool of Social Workers. The combination could result in the agencies capable of offering the highest salaries getting the Social Workers, leaving the less resource-rich or competition-savvy agencies dry. Another result might be job hopping, where pay is the determining factor for moving to another job. In such a tight labour market, the role of training and education of Social Workers is limited yet crucial. With acute labour shortages and similar work nature, Social Workers’ choice of jobs will tend to be based on which job pays more. On the other hand, training and education to inculcate in students the mission of Social Work to serve the needy might also help to remind Social Workers of their core function, and therefore motivate them to stay in their jobs for continuity rather than change jobs for higher pay. A further challenge discussed in the FGDs was the need to maintain parity in the salaries of Social Work and non-Social Work staff. The salary revisions bring Social Work salaries closer on par with other professionals in other sectors. However, it also pulls them up above the other professionals within the caring professions, such as counsellors and psychologists. It is interesting to note that the Report of Wages does not report the wages of these two occupations. Moving forward, this parity issue might need to be dealt with. On one hand, the jobs of other professionals in the sector might not fit within the purview of MCYS the way a Social Worker’s job does. On the other hand, given that VWOs are key employers of these other professionals, it might be a matter of time before the government also intervenes in the salary guidelines of these other professions.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES Beyond better recognition of Social Workers, the larger issue is better recognition of social service jobs in general.

Allocation within Limited Resources Ultimately, what is happening to VWOs boils down to the fundamental principles of allocation within limited resources. The differences in funding and internal salary models among the agencies resulted in differences in responses to the challenges of the funding sources. The SHGs and the organisation serving children with cancer, for example, raised no issues about program funding. They were free to set their own salary scale, and develop programs that they felt were needed for their respective ethnic groups. In turn, the salary structures of these VWOs were not as restricted. The other types of VWOs were more restricted in balancing remuneration that they felt their staff needed, and following the prescribed models by mid-point of government funding. While they could raise funds to meet the shortfall, aside from the economic arguments of skewed incentives that the models result in, these VWOs struggled with having to pour resources into raising funds for only a portion of their manpower needs and the unwillingness of public donors to channel their donations to manpower rather than clients. While participants from funding agencies felt that funding was more or less guaranteed, examples from the FSC-youth FGD suggests the insecurity of per-capita and partial funding. One participant, for example, wondered about the justification of expending lots of energy in fund-raising for a small percentage that the funding through NCSS did not cover. She felt that it was self-reliance in spirit, but not in reality. Insecurity of funding stresses VWOs more than commercial enterprises because of the lack of profits to buffer shortfalls. Security in the amount and source of funding was a major determinant in the sentiments of participants towards their human resource practices. The expectation and purpose to raise funds might need reconsideration. If the government and its partners have chosen to support VWOs, it might make sense to fully support than to leave VWOs in a situation where they felt that they were

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FUNDING AND REMUNERATION IN SOCIAL SERVICES neither here nor there. The resource security that the SHGs and self-funded agency serving children with cancer had came across as beneficial in terms of the freedom that these VWOs felt in program design and human resource practices. While government funding includes grants, the trend not just in Singapore but also elsewhere seems to be towards program funding (Scott, 2003), which tends to result in the incentive problems highlighted in this study. On the other hand, despite funding models and program prescriptions making poor remuneration a rational behaviour, that the social service sector in Singapore is well-organized and well-resourced should be recognized, and agencies have much room for creative and improved human resource practices to optimize intra-agency distribution of funding among staff and other resources. Funding and service models originate from practical principles (e.g. the many helping hands) which have built the strong social services in Singapore today. The challenges identified from economic theory and punctuated by accounts from FGDs and interviews provide deliberations for enhancing the current operations for improved social service administration.

Conclusion The main conclusion of the study is that the salary revisions in Singapore have kept Social Work salaries on par with other professionals’. However, the Compensating Wage Differential model suggests that more will need to be done to raise Social Work salaries if the pool of Social Workers is to be expanded to meet increasing social needs in view of the overall wage trends. In addition, the economic principle of incentive mechanisms shows that existing funding models in Singapore create unintended human resource issues which affect Social Work remuneration. The funding models can therefore be enhanced, fund-raising expectations re-evaluated, and human resource practices improved, to better distribute resources between junior and senior staff, between different types of Social Workers, and between human and other types of resources.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES The scale of the study was small, covering FGDs and interviews with 17 participants, surveys of recent graduates, and aggregate data from a publicly available series. However, the inputs from these sources are felt to be important voices of the Social Work landscape in Singapore. The FGD and interview participants are key and respected professionals in the sector, the surveys are with graduates of the main Social Work programme in Singapore, and the aggregate data is from a national report. While the FGD findings are based on subjective views of participants and cannot be generalized, steps were taken to maintain objectivity. The authors separately identified themes before writing, and participants reviewed manuscripts for factual errors. The findings were analyzed through the lens of tried and tested economic principles that have been used universally to explain market and non-market systems. The implications of the study are therefore felt to be premised on sound data, theory, and methodology. As future salary revisions and funding models evolve, below summarizes some recommendations for consideration: 1. Public education a. To help the public understand what Social Work is; b. To improve the number of majors in Social Work; c. To improve public understanding that resourcing manpower is closely tied to outcomes of clients and thereby to improve willingness by donors to allocate funds towards manpower wages and benefits; 2. Formal education and training a. To not only equip Social Workers with requisite skills and knowledge, but to continually strengthen Social Workers’ belief in their role and mission to serve the needy in society. 3. Continued benchmarking of salaries against comparable professions. 4. Reassessment of the benchmark and its rationale by an investigation of the job scope and expectations of Social Work relative to comparable professions and of different kinds of Social Work.

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FUNDING AND REMUNERATION IN SOCIAL SERVICES 5. Enhancement of funding models a. increase responsiveness of service models or decrease extent of prescription so that prescribed staffing in models better reflects current needs; b. build in buffer maintenance funding to decrease uncertainty of per capita funding. 6. Re-evaluation of fund raising expectations and purposes for VWOs. 7. Improvements in human resource practices a. To distribute funding to staff and other resources more optimally; b. To consider staff exchanges and job rotations. c. To continue with creative and flexible non-salary benefits and human resource development through training and development. 8. More in-depth research, for example: a. Follow-up studies of Social Work graduates to understand patterns of job movements and salary progression; and b. Analysis of the funding systems in relation to outcomes management to identify ways to improve distribution of funding and staffing for improved effectiveness.

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