Top HR Risks Facing UK Charities and Not-For-Profits in 2025, and How to Tackle Them

18 Aug 2025

The third sector continues to face mounting pressures in 2025., from funding shortfalls to increasing demand for services, but one area that often gets overlooked is HR. For not-for-profits and charities, human resources isn’t just about hiring and compliance; it’s about safeguarding the people who deliver your mission.

Here are the top HR risks facing UK charities this year, and practical steps to mitigate them.

1. Recruitment and Retention Challenges

The Risk:
Charities and not-for-profits are struggling to attract and retain talent, especially in specialist roles like fundraising, digital, and mental health support. With limited budgets, competing with private sector salaries, pensions and benefits packages is tough.

How to Tackle It:

  • Emphasise purpose in job ads—many candidates value impact over income.
  • Offer flexible working arrangements and development opportunities.
  • Use skills-based hiring to widen your talent pool beyond traditional qualifications.

2. Burnout and Mental Health

The Risk:
Staff and volunteers are reporting higher levels of stress and emotional fatigue, especially in frontline roles. The passion that drives charity and not-for-profit work can also lead to overextension.

How to Tackle It:

  • Introduce mental health first aiders and regular wellbeing check-ins.
  • Encourage boundaries around working hours, especially for remote teams.
  • Provide access to employee assistance programmes (EAPs) or peer support networks.

3. Legal Compliance and Safeguarding

The Risk:
Changes in employment law, data protection, and safeguarding regulations can catch organisations off guard; especially those without dedicated HR teams.

How to Tackle It:

  • Conduct regular HR audits to ensure compliance.
  • Stay updated via HR newsletters or sector bodies like NCVO and CIPD.
  • Invest in HR consultancy support for policy reviews and training.

4. Volunteer Mismanagement

The Risk:
Volunteers are vital, but misclassifying them or failing to support them properly can lead to legal and reputational issues.

How to Tackle It:

  • Create clear volunteer agreements and role descriptions.
  • Provide training and supervision, just as you would for paid staff.
  • Recognise contributions through non-financial rewards and feedback.

5. Diversity, Equity & Inclusion (DEI)

The Risk:
Organisations risk falling behind on DEI if they don’t actively address representation and inclusion, especially in leadership roles.

How to Tackle It:

  • Conduct a DEI audit and publish transparent goals.
  • Offer inclusive recruitment training and review job descriptions for bias.
  • Create safe spaces for staff to share experiences and feedback.

Final Thoughts

HR risks in the third sector aren’t just operational, they’re mission critical. By proactively addressing these challenges, organisations can build resilient, inclusive, and impactful teams that thrive in 2025 and beyond.

If your organisation needs support navigating these risks, HR4Business offers tailored consultancy for charities and not-for-profits. Get in touch to learn more.

Back to other blogs