The economic downturn continues to impact the nonprofit sector in a variety of ways. Despite fewer resources, the demand for nonprofit services has not changed, and in many cases, has grown. Charitable giving is down and many nonprofits have taken a hit in their governmental funding. Nonprofits employ over 13 million paid workers which represents approximately 10% of the total US workforce. Add to that the recipients of services, volunteers, and philanthropists, and it’s easy to see that the health of the sector affects a large number of people. While none of us has control over the economy, anyone who is part of a nonprofit leadership team should be acutely focused on saving money and cutting costs. One simple (but not easy) way to do so is by decreasing employee turnover.

Staff turnover and retention rates are concerns for all employers, but especially so in the current economy. Being as efficient as possible with organizational dollars is a top priority, and reducing turnover rates is one reliable way to ensure funds are going towards program costs. While turnover rates may be lower than before the economic downturn, reducing your rate further is low hanging fruit in the effort to operate efficiently.

Finding a way to trim turnover rates will always contribute to the nonprofit bottom line by reducing operating costs. These efforts can be a simple method for decreasing the costs of running a nonprofit, but require dedication and an investment of time and resources on the part of the employer.

The issue of staff turnover is complex and involves many factors. The trick is to identify those areas that can be influenced and design effective strategies for doing so. Has your nonprofit taken an honest and analytical look at the turnover it is experiencing? Identifying the root causes is the only real way to effectively address and stem the tide of turnover and its accompanying impact upon your organization.

To provide nonprofits with current information and suggestions for addressing turnover and vacancy rates, Opportunity Knocks conducted its own research for the second time in two years. It was our goal to re-visit the answers to the following questions:

To provide nonprofits with current information and suggestions for addressing turnover and vacancy rates, Opportunity Knocks conducted its own research for the second time in two years. It was our goal to re-visit the answers to the following questions:

The report and its findings will give your organization a benchmark against which to measure how you are doing with turnover and retention. It will help to guide your decision makers in developing ways to retain valuable employees. And, considering the state of the economy, we’ve made recommendations for stemming the tide of employee departures.

KEY FINDINGS

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The following report summary provides an overview of the themes resulting from a series of regional gatherings of 200 leaders from innovative nonprofits For a complete version of the 12-page report, please download it here.

REPORT SUMMARY

The societal, economic, and political landscape looks very different in 2010 from that which existed just a few years ago. Faced with a range of new realities, social entrepreneurs feel that they are approaching an “inflection point,” or a moment of dramatic change for their organizations and movement. Despite diminished resources, social entrepreneurs are now working to grow in entirely new ways and at faster rates than ever before.

These conditions and goals are putting incredible stress on systems that were already running at nearly full capacity. To be successful in moving to the next level, leaders need to take the entrepreneurial skills that they used so successfully in programmatic development and focus their talents on enhancing internal operating systems.  Organizations need to build capacity, enhance efficiency, and leverage human capital in order to increase their social impact per dollar invested (as represented below figuratively, not quantitatively).

To explore how social entrepreneurs are navigating through this dynamic period, Commongood Careers and the Building Movement Project convened “Conversations with Social Entrepreneurs.”  This effort included an electronic survey study and a series of regional gatherings in four cities with a group of 200 leaders from innovative nonprofits. The conversations revealed three prominent themes, as follows:

(1) Looking for new revenue sources: Social entrepreneurs are cautiously optimistic at the moment and 73% of them plan to expand programs this year, despite foundation funding cuts and other challenges with traditional funding streams. To be successful, however these groups will need to become more innovative in their approaches to revenue generation, such implementing growth capital campaigns and social media strategies, but also especially in their government relationships where only about 30% of all participants are planning to pursue new funding opportunities such as the Social Innovation Fund.

(2) Focusing on core growth with partners: In response to resource constraints and high levels of uncertainty, social entrepreneurs are rethinking their strategic plans in order to focus on core operations and essential programs. At the same time, organizations are pursuing aggressive growth plans, with 74% of participants expanding in their current regions and 40% replicating their programs in new regions in 2010. Partnerships among social entrepreneurs and across sectors also emerged as a key strategy to increase impact and decrease costs. Participants also expressed a strong desire for additional regional convening opportunities.

(3) Enhancing human capital: Participants agreed that one of the largest sources of untapped potential for increasing organizational capacity exists within the human capital arena (including staff members, consultants, volunteers, board members and other stakeholders). In order to achieve their growth and impact goals, however, social entrepreneurs recognize that they will have to re-prioritize the perception of human capital’s importance in their organizations and embrace innovative new ways of recruiting, hiring, managing and developing talent.  Through these conversations, a number of best practices and new ideas were identified along these lines, including:

1. Pipelining: Build year-round recruiting partnerships, career tracks for program alumni, and pipelines into constituent communities.
2. Cross-Training: Create cross-functional teams to facilitate knowledge sharing and increase organizational cohesion.
3. Managing Volunteers: Utilize HR systems for volunteers just as for staff (job descriptions, recruitment, screening, managing, etc.)
4. Sharing Talent: Move away from competitive poaching and toward inter-organizational career ladders and management exchanges.
5. Leveraging Corporations: Ask private-sector partners to share professional development trainings, systems, and technologies.
6. Partnering and Merging: Explore sharing back-offices, staff trainings, pooled employee benefits and even celebrations.
7. Re-branding: Collaborate to build a unified and exciting nonprofit “brand” to attract new employees, volunteers and supporters.
8. Pooling Candidates: Develop a single talent database across many organizations to pool alumni, ex-employees and strong candidates.
9. Engaging Politicians: Inform elected officials about nonprofit employment levels and advocate for solutions to stimulate hiring.

For a complete version of the 12-page report, please download it here.

Commongood Careers is an innovative talent partner for the nonprofit sector. Functioning principally as a retained search firm that supports social entrepreneurs with their recruitment and hiring needs at every level of the organizational chart, Commongood Careers also works to provide resources for socially-driven jobseekers and to address talent-related issues throughout the sector.

To this end, Commongood Careers recently developed and distributed a 25-question survey to the 15,000 members of its candidate pool. The survey asked jobseekers to share their attitudes, motivations and challenges in pursuing careers in the social sector. The following report is intended to provide employers with a deeper understanding of what employees prefer and expect from them. This information can help organizations be more effective at recruiting, hiring, developing and retaining talented individuals.

Three major themes emerged in the survey results. The first, Cultural Connection, reveals the participants’ motivations and values. The second, Employment Incentives, explores compensation-related concerns and preferences. Finally, Career Development offers a glimpse into their longer-term plans and aspirations.

Theme 1: Cultural Connection

Although most nonprofits consider “candidate fit” with their organizational culture to be one of the most important factors in making a hiring decision, survey results illustrated the degree to which jobseekers also place cultural connectivity above almost all other factors in assessing their job opportunities.

When asked what type of organizational culture they desired, a “collaborative, team-oriented” environment was most prized, with respondents indicating that this was one of their primary reasons for choosing nonprofit over private sector jobs. Demonstrating a “strategic, results-oriented” approach was also essential, as was an effort to engage employees in the development and implientation of that strategy. People want to see, feel and impact results while working in organizations that they believe are effective agents for social change.

Theme 2: Employment Incentives

Although survey participants indicated high levels of tension around “doing good” while also needing to earn a living, they did not want to make substantial trade-offs in the process. While “mission” still ranked first in evaluating job opportunities, “salary” finished second and remained a prevalent theme throughout the survey.

When asked to consider which non-salary benefits were most important to them (other than standard healthcare)

“vacation policies” topped the list, with second place going to “flexible work plans such as 4-day weeks and working from home.” Both factors ranked far above traditional benefits such as dental, vision, performance bonuses, tuition debt support and family leave.

Theme 3: Career Development

Respondents voiced a clear intent to stay in the sector and pursue leadership roles, with 63% indicating a plan to stay in the sector for at least ten more years; 82% saying they wanted to hold a nonprofit executive-level role at some point; and 66% stating that they were ready, or would be soon, to hold an executive position.

When asked what might keep them employed at a single organization for 5-10 years, the top response was “feeling continually challenged by my job.” On the other hand, respondents indicated that the relative absence of career ladders, mentors and professional development might limit their long-term ability to remain in the sector.

Implienting Strategic Responses

Jobseekers agree that the need for change is real, as over 75% of respondents agreed with each of the following statements:

• Organizations must change their recruitment practices to attract next generation leaders.
• Organizations must change their employment practices to retain next generation leaders.
• Organizations must do more to professionally develop future nonprofit leaders from within.

To provide some ideas for nonprofits looking to put this information to work, the following strategies are offered:

1. Define and publicly share a statement about your organization’s unique culture and values.
2. Define your “employer brand” and leverage your marketing resources in your hiring efforts.
3. Develop a proactive, year-round commitment to recruiting and informational interviewing.
4. Consider “re-scaling” growth plans for increased salaries across fewer, higher-level employees.
5. Stay current with evolving salary trends and maintain your competitiveness in compensation.
6. Get creative with benefits, offering more flexibility with vacation time and employment arrangements.
7. Build career ladders for every employee, identify successors, and promote employees regularly.
8. Challenge and develop employees through in-house training programs and mentoring opportunities.

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The nonprofit sector comprises more than 1.1 million registered organizations, employs more than 11 million people (and the equivalent of 5.7 million full-time volunteers), and generates annual revenues exceeding $1 trillion dollars. Nonprofit organizations are essential tools for addressing community needs, advocating for community and social change, and engaging citizens in democratic probli solving. Yet as large and critical as the sector is, little infrastructure exists for recruiting, retaining, and developing the skilled, committed, and diverse workforce and leadership the sector needs to succeed in the decades ahead.

To sustain and build on the achievements made by nonprofit organizations in addressing the needs of our communities and civil society, we must invest in the development of the workforce and future leadership of the sector. A group of leaders from national nonprofit organizations, foundations, and academic centers who are united in their commitment to strengthening the sector’s human resources convened in March 2005 to begin developing a research and advocacy agenda that involves reaching out to many more key stakeholders to establish a broad-based, powerful, and formal national coalition.

We anticipate that our coalition will seek a major investment of public and philanthropic resources to build the infrastructure necessary to recruit, retain, and develop the skilled, committed, and diverse workforce that this sector needs in the decades ahead. Some of the sector’s workforce needs might be characterized as follows.

• The nonprofit sector is not effectively recruiting diverse and talented young people to begin careers in public life. We need effective pipelines into the nonprofit sector.
• The nonprofit sector lacks the capacity to effectively support its workforce. The nonprofit sector is not effectively developing diverse young employees to be the next generation of nonprofit sector leaders. We need leadership pipelines within the nonprofit sector.
• The nonprofit sector must balance the growing need for strong nonprofit management with courageous leadership. We must develop effectively prepared, passionate, and diverse leaders for the nonprofit sector. We need greater diversity represented at all levels of the nonprofit sector.
• New research must investigate the sector’s most pressing workforce issues, and existing research needs to be more widely disseminated. We need better and more widely disseminated research on nonprofit sector workforce issues.

Possible strategies to address the workforce needs of the sector may include providing opportunities and incentives for talented and diverse young people to enter the sector; strengthening university pipelines and support for the nonprofit sector; expanding support for nonprofit human resource and leadership development and effective succession planning; holding organizations accountable for the diversity of all levels of staffing and board oversight; among many others.

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Paul Schmitz is President and CEO of Public Allies, an Americorps program identifies talented young adults from diverse backgrounds and advances their leadership through a ten month program of full-time, paid apprenticeships in nonprofit organizations, weekly leadership trainings, and team service projects.

Shelly Cryer is Director of Initiative for Nonprofit Sector Careers, a national campaign to recruit, prepare, and retain the next generation of nonprofit sector leadership, and ensure that this leadership reflects the diversity of the populations our sector serves. Initiative for Nonprofit Sector Careers is a program of American Humanics.