Social Business

According to Cintulova (2021, p. 3-11), unemployment in Slovakia has a complex history that developed in accordance with political and economic changes in the country. Solving unemployment remains a key challenge for the Slovak economy and the entire society, which is trying to adapt to constantly changing conditions on the labor market.

According to Pčolinská (2017, p. 7-10), social enterprises are defined as entities that combine business and social goals. They play a key role in reducing unemployment and eliminating social exclusion. The theoretical framework is based on the concepts of social entrepreneurship, which emphasize the importance of social inclusion, sustainable development and economic participation of disadvantaged groups. Social enterprises provide work opportunities for people who have limited access to the traditional labor market, such as the long-term unemployed, people with disabilities, young people without experience and other vulnerable groups. Social capital theory emphasizes that these businesses contribute to building community ties and improving social cohesion, thereby strengthening local economies.

When assessing the impact of social enterprises on unemployment, it is important to take into account legislative and financial aspects that affect their functioning. The financing models of social enterprises include various sources, such as public subsidies, social investments and income from their own entrepreneurial activity, which are essential for their sustainability and growth.

According to Bobáková (2021, p. 50-61), social enterprises use innovative approaches and strategies, for example partner networks, cooperative and participatory management, which increase their effectiveness in solving social problems. These starting points provide a framework for exploring how social enterprises can effectively contribute to reducing unemployment and promoting inclusive economic development.

Unemployment is a serious socio-economic problem that is intensively addressed even in the post-pandemic period. The European Employment Strategy focuses on increasing employment and creating new jobs through improving employability, supporting entrepreneurship and equal opportunities. New trends in employment, especially industrial revolution 4.0 and digitization, are bringing radical changes, including job threats and increasing qualification requirements. Home-office has become a new standard that brings benefits for both employers and employees, while requiring a balance between productivity and social contacts Dirgová (2022, p. 26-30).

The author also deals with the issue of unemployment from the point of view of social factors, analyzes the causes and consequences of unemployment within individual social groups and regional differences. It focuses on the social, economic and psychological aspects of unemployment, as well as its impact on the lives of individuals and their families. It discusses the possibilities of reducing unemployment through various social policies and instruments, educational programs, employment support and reintegration measures for the unemployed, emphasizing the need for a comprehensive approach in the fight against this phenomenon. The author points to the need for a comprehensive approach, which includes cooperation between government institutions, the non-profit sector and business entities Dirgová (2017, p. 15-34).

Definitions of social enterprises vary depending on the economic and social context. Each company has its own interpretation and characteristics of social enterprises. According to Pčolinská (2017, p. 3-18), a social enterprise is a business entity that operates within the market of goods and services and focuses on employing persons with health or social disadvantages. Unlike traditional businesses that focus on profit maximization, social enterprises emphasize creating social value and promoting the inclusion of their employees in society. The profits that social enterprises generate are largely reinvested in activities and projects that support their social and economic goals.

According to Bobáková (2021, p. 1-5), a social enterprise is aimed at achieving social goals and the surplus from its activity is reinvested in business activities or social projects. This type of business tries to compete in the regular market and at the same time adhere to ethical standards that are manifested towards customers, competitors and employees.

Dirgová and Černá (2013, p. 10-25) deal with ethical issues of managerial decision-making and its impact on the work environment in the context of social dialogue. The authors analyze the role of managers in promoting transparency, justice and responsibility in relations between employers, employees and other actors. In connection with social enterprises, they point to the importance of ethical management in creating jobs for disadvantaged groups and in developing a sustainable business that respects social values ​​and contributes to improving the quality of life of the community.

According to Černá (2017, p. 51-66), the basic characteristic of a social enterprise is its orientation towards social good and reinvestment of profits to support the local community and social goals. Social enterprises provide jobs and educational opportunities for people who are socially marginalized, creating an environment that supports them and helps them integrate into society. Their activities often involve different levels of work tasks, thus ensuring the accessibility of employment for different levels of work skills.

In some countries, e.g. in the Czech Republic, social enterprises are founded on the basis of voluntary initiatives of citizens, which focus on creating jobs for disadvantaged groups. These businesses fulfill the role of inclusive social enterprises and provide products and services in local communities. The support of these enterprises is often provided through subsidies and funds (Pčolinská, 2017, p. 5-9).

According to Lubelcova (2017, p. 1-5), social enterprises are unique organizations that combine elements of business in order to achieve social and environmental goals. They arose as a reaction to the need to solve various social problems that traditional market and government institutions could not adequately solve. Their definition and objectives may vary by context and country, but in principle they are businesses whose primary objective is to create social value rather than maximizing profit for owners or shareholders.

According to Pčolinská (2020, p. 6-12), according to internationally recognized definitions, social enterprises are aimed at solving social, environmental or community problems, while this goal is a priority over generating profit. They carry out a regular economic activity and generate income through the sale of goods or services. Unlike charities, social enterprises are market dependent and competitive. Most of the profits are reinvested in business or in fulfilling social goals. Many social enterprises follow democratic principles and involve their employees, clients or community members in the decision-making process. Social enterprises often use innovative approaches to solve social problems and try to find new and effective ways to achieve their goals.

Social enterprises aim to solve various social challenges. According to Pavlík et al. (2020, p. 69-73) the main goals include increasing employment, providing job opportunities for disadvantaged groups, the long-term unemployed, people with disabilities, young people without experience, the elderly and other vulnerable groups. Social enterprises create inclusive workplaces where they focus on developing the skills and capacities of employees. They promote social inclusion and reduce social exclusion by involving marginalized groups in social and economic activities. In this way, they contribute to building more cohesive and inclusive communities. They also promote environmental sustainability through green business practices and environmental projects. Social enterprises often emphasize waste reduction, recycling and the use of renewable energy sources. They promote innovative approaches and business models that can bring new solutions to social and environmental problems. Social enterprises often experiment with new technologies and methods that can then be practiced by the business sector. They support local economies by reinvesting profits into the community, creating local jobs and supporting local suppliers and entrepreneurs. In this way, they contribute to the economic development and improvement of the quality of life in the communities where they operate.

Social enterprises have different specific goals depending on their focus. Disadvantaged employment businesses, for example, focus on creating jobs for people who face barriers in the traditional labor market. Green social enterprises focus on environmental protection and sustainability, for example through recycling, renewable energy or sustainable agriculture. Educational and training companies offer training programs that help disadvantaged groups acquire new skills and increase their chances of employment (Procházková et al., 2018, p. 1-9).

Social enterprises are organizations that combine business activities with the aim of achieving a positive social or environmental impact. Nowadays, their importance in the field of increasing employment is increasingly recognized, especially in regions where traditional job opportunities are insufficient or non-existent. It is necessary to deal with various aspects of social enterprises, including legislation, projects, focus and examples of good practice in the world, in Europe and in Slovakia.

Social enterprises use a variety of methods to reduce unemployment, tailored to their specific goals and the needs of local communities. The involvement of social work in the structure of a social enterprise contributes to the long-term integration of employees from marginalized communities. By providing employment to people who have difficulty finding work in the traditional market, social enterprises help reduce unemployment and promote economic integration. Promoting employability through educational programs, training and professional development also contributes to improving the employability of employees, including the development of new skills that are needed in the labor market (European Commission, 2024, p. 1).

Intersections of social entrepreneurship and social work

Social enterprises have an important role because they provide employment for residents and at the same time support local and global development through social projects. In social work, social enterprises are used as a means for the integration of marginalized and handicapped groups, which contributes to their better integration into society. Social work plays a key role in connecting social enterprises with local communities, especially in areas where the employment of marginalized groups such as the disabled and the long-term unemployed needs to be addressed. Social enterprises in such regions help not only to create new jobs, but also to improve the quality of life of these groups through targeted social integration programs.

The importance of social enterprises in municipalities also lies in the fact that they provide an alternative to traditional business and contribute to sustainable development by solving local social challenges. One example is the business model for people with disabilities, where working conditions are adapted to the specific needs of employees. One of these approaches is the sharing economy model. This model allows resources such as work tools or space to be shared between multiple businesses or individuals and also supports local communities and provides employment opportunities for vulnerable groups.

Research methodology

The research was aimed at examining the role of social enterprises in reducing unemployment and their contribution to social inclusion. The respondents were social workers who work directly with social enterprises. The research identified the main problems faced by social enterprises, e.g. lack of financial resources or low qualification of clients. The research also identified factors that support the success of social enterprises in order to provide recommendations for improving their effectiveness and increasing their contribution to employment in society.

The aim of the research was, based on the experience of social workers, to find out the role and impact of social enterprises in the fight against unemployment and to identify the factors that contribute to their successful increase in employment.

Sub-goals:

  1. Determine the impact of social enterprise strategies on reducing unemployment, specifically analyze approaches and methods that support employment in disadvantaged groups.
  2. To identify the main problems that social enterprises face in increasing employment.
  3. To find out the experiences of social workers with the effectiveness of work programs in social enterprises and to evaluate the factors that contribute to their success or failure.

Research Questions:

  1. What impact do social enterprise strategies have on reducing unemployment?
  2. What are the main problems that social enterprises face in increasing employment?
  3. What are the experiences of social workers with the effectiveness of various work programs in social enterprises?

118 respondents were included in the research. The region of activity of social workers was most often the Bratislava region with 37 (31.4%) respondents, the Prešovský region was represented by 18 (15.3%) respondents and the Košice region by 17 (14.4%) respondents, the Trenčín region was the least represented by 4 (3.4%) respondents.

In the research, we focused on experiences with social enterprises. Cooperation with social enterprises in the practice of social workers is mainly aimed at organizing educational activities for clients according to 50 (42.4%) respondents, which represents the most common form of cooperation. This is followed by participation in projects aimed at social inclusion and employment by 31 (26.3%) respondents. Support for employees of social enterprises, as a solution to personal or professional problems, was mentioned by 21 (17.8 %) respondents. Monitoring and evaluating the effectiveness of social enterprises is another way of cooperation according to 8 (6.8%) respondents, while job mediation and adaptation of clients to the working environment occur rarely, according to 4 (3.4%) respondents. The results point to the dominance of educational and inclusive activities in cooperation.

Presentation of selected research findings

The assessment of the overall impact of social enterprises on reducing unemployment shows that 82 (69.5 %) respondents expressed a rather positive assessment. A neutral attitude was held by 15 (12.7 %) respondents, while 21 (17.8 %) respondents reported a rather negative impact. No respondent expressed a positive or negative assessment (0.0 %). These data indicate that social enterprises are perceived mostly positively, although some respondents point to shortcomings or a lackluster effect.

The graph shows the responses of respondents assessing the overall impact of social enterprises on reducing unemployment.

Chart 1 Evaluation of the overall impact of social enterprises

Source: own processing

The effectiveness of social enterprises in the integration of disadvantaged groups into the labor market was rated as effective by 66 (55.9%) respondents, while 10 (8.5%) respondents rated this effectiveness as very high. On the other hand, 38 (32.2 %) respondents considered social enterprises not very effective and 4 (3.4 %) respondents perceived them as ineffective. These data indicate that the majority of respondents see the potential in social enterprises to support the integration of disadvantaged groups, but some of them had reservations about their current effectiveness.

Chart 2 Effectiveness of social enterprises in integrating disadvantaged groups into the labor market

Source: own processing

According to respondents, the importance of social entrepreneurship for society and local communities lies mainly in providing job opportunities for disadvantaged groups, which was stated by 58 (49.2 %) respondents. They see further importance in strengthening social cohesion and integration in communities, which was stated by 22 (18.6 %) respondents. Less frequent, but still significant, are factors such as raising awareness of social justice and inclusion according to 11 (9.3%) respondents, solving social and environmental problems according to 8 (6.8%) respondents, and creating innovative solutions for community needs according to 7 (5.9%) respondents. Supporting sustainable development and supporting the local economy through local resources were perceived as less important, each with a share of 6 (5.1 %). These results indicate that respondents see the greatest benefit of social enterprises in their ability to support disadvantaged groups and improve social integration.

The graph shows that the importance of social entrepreneurship for society and local communities lies mainly in providing job opportunities for disadvantaged groups, strengthening social cohesion and integration, and raising awareness of social justice and inclusion.

Chart 3 Importance of social entrepreneurship for society and local communities

Source: own processing

Discussion

These results suggest that social enterprises play an important role in alleviating unemployment, although some respondents point to the need to improve some aspects of their operation. Our findings are consistent with Steiner and Teasdale's (2019) study, which points to their effectiveness in increasing employment. Social enterprises recognize the interconnectedness between different rural needs and potential solutions. The challenges of the rural environment could be transformed into opportunities for social enterprises and community development. However, national social enterprise policies are not sufficiently implemented at the rural level. The future success of rural social enterprises depends on overcoming traditional political barriers and strong sectoral divisions.

Our findings are consistent with the study by Apostolopoulos et al. (2019), which focuses on the importance of social enterprises in promoting employment, especially in rural communities. Research shows that social enterprises in non-urban areas have responded to a period of austerity measures by replacing public services. A key factor for the expansion of these enterprises is the institutional framework that enables their growth and stability. Social enterprises were created as a quick response to the economic crisis, when public services were unable to respond to the growing needs of communities. This approach reflects the ability of social enterprises to promote community resilience and adapt to the challenges of economic and social change, while playing an important role in regional development.

Suggestions and recommendations for social enterprises:

  1. Expand the range of services provided. Social enterprises should expand their services to cover a wider range of disadvantaged groups and offer more opportunities for the unemployed as well as support in adapting to the labor market.
  2. Focus on professional training and skill development. Implement special professional training and education programs that will help employees acquire the practical skills needed for permanent employment.
  3. Increase the attractiveness of job positions. Job positions should be better adapted to the needs of employees to reduce turnover and improve job satisfaction.
  4. Improve management practices. Use participatory and inclusive management practices that will improve employee motivation and support their long-term professional growth.
  5. Strengthen cooperation with local communities. To work with companies and organizations within local communities to ensure greater integration and promotion of employment within the regional context.
  6. Create mentoring and long-term support programs. Establish mentoring programs that will help employees from disadvantaged groups get the necessary support for their integration into the labor market.

Conclusion

Social enterprises play an important role in reducing unemployment, especially among disadvantaged groups. The goal of the research was to find out the role and impact of social enterprises in the fight against unemployment, based on the experience of social workers, and to identify the factors that contribute to their success in increasing employment. Research has identified several key roles and impacts of social enterprises in reducing unemployment. The main tasks include providing employment for disadvantaged groups, supporting their integration into the labor market and providing professional training. Social enterprises also contribute to the development of local communities and the improvement of social conditions. Their impact on employment is significantly supported by cooperation with public institutions, innovations in work processes and flexible working conditions. In addition, they play a role in preventing social exclusion and ensure long-term support for employees from disadvantaged groups.

Authors: Doc. PhDr. Mgr. Eva Dirgová, PhD., DSc. B.Sc. Jana Grejtáková VŠZaSP St. Alžbety in Bratislava, n. o., Institute bl. Z. G. Mallu, Košice

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