The amount of Scottish charities that have made redundancies doubled in the first half of the year, new research shows. 

The Scottish Council for Voluntary Organisations’ Third Sector tracker, which consulted 390 Scottish voluntary organisations via an online survey in May, found that, out of the charities that employ paid staff, 10 per cent had made redundancies over the previous four months.

This figure has doubled since the tracker’s previous survey, conducted in November, when 5 per cent reported making redundancies in the four months before.

The research also found that recruitment was down compared with the previous findings – just 34 per cent of charities said they had hired new paid staff in the past four months, compared with 51 per cent in the last survey.

Researchers found that 43 per cent of respondents had found recruitment and retention moderately or significantly challenging since December, with 54 per cent of these saying that their main obstacle to recruitment was a low number of applicants with the required skills.

Respondents mentioned staff burnout as a key barrier to retention, with one saying: “Staff are exhausted, underpaid and not given the recognition they deserve within the sector.”

Another respondent mentioned that the inability to offer competitive salaries was a challenge, saying: “We cannot afford to pay staff the same rate as some of the large multinational companies that we are in competition with for staff.”

Rising costs and inflation continues to be the “biggest challenge” for the sector, the report says, with nearly two-thirds of organisations saying that rising costs were having a negative impact on their ability to deliver core services.

When asked what costs were having a negative impact on their charity, nearly half of respondents said either staffing or energy costs, while one-third said business support costs.

One respondent said: “More funders are requiring that we pay the real living wage to qualify for funding, yet this isn’t being recognised by levels of funding increasing or in more flexibility of funding.”

The research found that since December, 39 per cent of charities asked had used their reserves to respond to financial challenges. Of these organisations, 60 per cent said they believed their usage of their reserves was unsustainable – a rise of 20 percentage points when compared with December’s findings.

But the percentage of organisations holding reserves of less than six months’ spending remained stable at 58 per cent.

The survey showed that 77 per cent of respondents believed their organisation had the capacity to meet most or all of the demand for their core services over the past four months, down from 83 per cent in the winter reporting period.

The majority of organisations were confident they would still be operational in a year’s time, with 87 per cent saying they would still be operating next spring.

When asked what changes they expected their organisation to make in order to remain operational, the most common response was related to funding and fundraising.

One respondent said: “The organisation will exist in 12 months; however, the size and future of the organisation will be impacted massively on the ability to secure additional core funding to replace current grants.”

Other common themes included changes to staffing, reducing or adapting activities and looking for new premises.