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Trends & Issues

Workforce Woes

Thinking about and managing changes in the non-profit workforce

Many people, especially those in our sector, are surprised to learn that there are 1.2 million people working in more than 68,000 voluntary and not-for-profit organizations in Canada. Together we represent nearly 8% of the country’s total paid workforce, earning salaries that add up to an annual payroll of more than $22 billion. To put things in perspective, paid employees in our sector outnumber the total workforce of the provinces of New Brunswick, Nova Scotia and Newfoundland and Labrador. We also outnumber employees in Canada’s construction and hospitality industries combined.

Thinking about the 1.2 million executive directors, program managers, coordinators of volunteers, fundraising professionals and front-line service providers as a collective workforce is a new concept for many. Traditionally, we think that terms like workforce, labour, and productivity are applicable to the sphere of for-profit enterprise. By virtue of being not-for-profit, we assume that these metrics don’t apply to what we do. For a long time, mission and vision were the means by which we identified ourselves and recruited passionate and dedicated people to champion causes. People didn’t work for organizations, they believed in worthwhile causes and were willing to earn lower salaries, forgo benefits and miss out on pensions in order to fight the good fight.

While still vital and integral to our work, mission and vision alone are no longer enough to keep organizations viable. Unlike other sectors of the economy that invest in physical capital (i.e. machines) to produce products, ours is all about deploying human capital to achieve results, such as improving the lives of individuals in our communities. In a rapidly changing world, we must not only deploy our precious human resources effectively but, like other sectors of the economy, we must invest in our workforce if we are to be truly responsive to the changing needs of our communities.

Adapting to a changing labour market

With an understanding that our sector is a key part of the broader labour market, we can infer that just like our peers in sectors like mining and manufacturing, the voluntary and not-for-profit workforce can both impact, and be impacted by, a host of economic factors. As our sector relies more heavily on human capital than others, we need to be especially focused on anticipating and managing the people-oriented trends and changes that are affecting the market including low unemployment rates, the retirement of the baby boomers, a surge in immigration and the integration of the next generation of talent.

Historically low unemployment rates

We’re heading into the 16th straight year of national employment growth, with unemployment at its lowest rate in 33 years. The Canadian economy is strong and more Canadians are working than a generation ago. But what does that mean for our sector? With the increase in available jobs, it’s apparent that we’re in an employee’s market. Potential or existing employees are courting offers from other employers in the public or private sectors and we risk losing our top talent because we can’t compete with the offers of higher salaries, better benefits and other perks.

The outlook isn’t completely bleak though. In a recent jobquality.ca survey, only 37% of respondents cited having a job that pays well as “very important,” while nearly 90% felt that having a sense of accomplishment was very important. So what does that mean for us? While organizations may never be able to fully compete with their private or public sector counterparts when it comes to salaries, job security or comprehensive benefits plans, the things that people value most in their jobs are exactly what the sector is ideally positioned to provide - we just need to do a better job of promoting it. Think of how we solicit the financial support of donors, sponsors and philanthropists - we talk about values alignment and their ability to make a difference in the community. Why not use the same approach when recruiting staff to work in our organizations?

Retirement of the baby-boomers

Canada is home to an aging population that is retiring earlier and living longer than ever before. According to Linda Duxbury of Carleton University, for every two people who will retire over the next 30 years, only one person will take their place in the labour force. This trend is creating the tightest labour market since the 1950s, leaving organizations in all economic sectors competing to draw talent from a dwindling supply.

Born between 1946 and 1964, baby boomers make up more than 30% of the population, and as a cohort have more people in the Canadian labour force than any other living generation. As the boomers get set to retire, the labour force is in for a dramatic shift and our sector will not be immune. While the boomer exodus will affect positions at all levels, we’re especially vulnerable at the leadership level. So how do we address the departure of employees in time to ensure that our organizations remain viable?

One of the strategies is to encourage employees to remain in the workforce. Our sector is experiencing a high rate of turnover, especially at the leadership level. Factors contributing to this turnover are documented in a number of studies – the large amount of time spent on functions like fundraising and human resources management, difficult board and funder relations and more complex and rigorous regulatory and accountability requirements. In order to keep these people in the sector we need to find new ways to support them through peer networks, coaches and professional support services.

Another line of action is to find ways of supporting and developing middle-level managers now in their 30s and 40s to move into senior positions. However, this strategy presents its own challenges as, unlike the private sector, most not-for-profit organizations cannot cultivate their own supply of future leaders because they have few employees to draw on.

An increasingly diverse workforce

Take a look around you. Chances are the people you work with are more like you than unlike you. White, middle-class, middle-aged women make up the majority of our sector’s workforce. Aboriginal, immigrant and disabled communities, the communities that many of our organizations support and work with are under-represented in terms of employment rates in both the general workforce and in the sector.

At the same time, Aboriginal Canadians are the fastest growing segment of the population in Manitoba and Saskatchewan. The same is true for immigrant populations in major urban centres. Both of these groups provide the sector with additional, yet largely untapped, recruitment opportunities. The sector should also step up efforts to tap into the talents of people with disabilities.

Integrating the next generation of talent

There is growing evidence from organizations like the Young Nonprofit Professionals Network in the U.S. that younger people, while interested in working on social issues and challenges, are not interested in taking up leadership positions in the voluntary organizations they work with. While many younger people are driven by a passion for a particular issue such as the environment, human rights or global poverty, when they look at leadership positions, they see that most of the time is spent on activities such as fundraising and financial and human resources management. Rather than building a career with a single organization, younger people view their career as a buffet and are interested in sampling a variety of interesting experiences and are more likely to move laterally within an organization or across organizations to go after the challenges and opportunities they seek. If this is indeed the case, the sector must encourage and ensure greater portability of skills and experience within the sector in order to keep younger employees engaged and connected.

Many commentators have described substantial differences in values between the boomers and generations X and Y that create challenges for managing intergenerational workplaces. Some see the boomers as a large plug that moved into organizations in the 1970s and 80s and stayed put, reducing opportunities for others to move into leadership positions in the sector. One line of action is to create some new roles for boomers as consultants, coaches, and mentors. These could be structured to facilitate the transfer of knowledge accumulated by the boomers over the last 25 years to the new generation of leaders within individual organizations and the sector more broadly.

Final thoughts

Until recently, a lot of the attention has focused on volunteers and volunteerism. It’s time for our sector to take a more strategic approach to recruiting and investing in people with the skills and talent needed to achieve mission and deliver results. Organizations vary in size, focus and reach, from small local frontline service providers to large national organizations with thousands of employees. There is no “one size fits all” approach to respond to these new challenges. Larger organizations may well have more resources they can deploy to ensure they have the talent they need, but that does not mean smaller organizations are off the hook. They need to take a close look at their human resources, both paid and unpaid. Boards need to identify the complement of skills and knowledge that are needed now and in the future. They need to pay attention to succession planning - if they can’t recruit from within, they should have a plan to identify talent outside the organization. Smaller organizations could also work together to identify and address common human resource challenges in areas like employee development.

A manager who is working on the challenges of recruiting and retaining workers in this sector in Calgary summed it up nicely when he said “This is not about going back to the good old days when the economy wasn’t overheated. This sector is facing a fundamental transition in thinking about and managing its workforce.”