Historically low unemployment rates could pose challenges for Michigan nonprofits looking to hire highly-qualified workers.
Just as in other sectors of the state economy, the nonprofit industry also faces its share of talent constraints, according to people focused on hiring and preparing individuals for careers in the sector.
“We’ve reached a stage in the general economy that the number of for-profit job openings as opposed to nonprofit job openings is pretty expansive,” said Bill Weatherston, a vice president with Troy-based Harvey Hohauser & Associates LLC, one of the region’s leading recruiters of senior staff for nonprofits. “A number of employers are saying, ‘If you know how to run a computer, we want to talk to you.’ The competition with a for-profit is a lot tougher now than it would have been four or five years ago. It’s harder for a nonprofit to compete with a for-profit.”
Executive search consultants for top-level nonprofit leaders talk extensively with boards and members of executive suites about the need for succession planning and overall strategic planning, Weatherston said.
“In general, the nonprofit industry outside of major nonprofits like colleges, universities and hospitals tend to a do a minimal job of filling their talent pipeline because they’re basically operating on a fairly tight budget,” Weatherston said. “Generally, they react rather than plan. They still tend to hold off looking for someone, even with a retirement that’s announced 18 months in advance.”
The ability to attract and retain a highly-qualified pipeline of talent differs depending on the size of the nonprofit, the amount of money it has and the position to be filled, said Steve Ragan, senior vice president for development and external relations at Southwest Solutions Inc., a comprehensive human services nonprofit headquartered in Detroit.
“If you look at us, where a very large number of our employees are social workers, we don’t have lot of high paying options, but if you look at fundraising, which is what I do, we have a lot of opportunities,” Ragan said. “In the area of community mental health or a residential facility, it’s really difficult to retain staff because salaries tend to be lower.
“One of the issues almost all the sectors are facing is that they’re under greater pressure to become more efficient and do more with less. They’re under pressure to look for more sources of revenue.”
Despite financial constraints, Ragan said nonprofits can take action to attract and retain a solid skilled workforce, such as by offering opportunities for job sharing or working remotely. The incentives often prove attractive for younger workers who increasingly seek a greater work-life balance.
“You have to be prepared to respond to that,” he said. “A lot of young people are attracted to the work we do. I work with a lot of large companies trying to address the issue that their employees want to have an impact in their community. They’re interested in doing more than just earning a paycheck.”
As an educator who is in charge of producing talent to fill positions at nonprofits as well as in the government and for-profit sectors, Patricia Wren said there is an understanding that students who have chosen to major in careers in health and human services have picked meaning over money.
“We have two streams of students,” said Wren, professor and chair of the Department of Health and Human Services at the University of Michigan-Dearborn. “They absolutely know what they’re getting themselves into is personal and it’s a passion project. I think a lot of students might know medical fields like physicians, nurses and dentists. It’s a bit of a revelation for them when they run into a professor or a course on health policy where they have this broader exposure to the nonprofit world and nonprofit job opportunities.
“Part of what we do is open students’ eyes to a broad range of jobs.”
Those students who opt for nonprofit careers that deal with issues such as food insecurity, affordable housing or substance abuse are keenly aware that they will have a high level of engagement with the vulnerable populations they serve and won’t make as much as their peers in the for-profit sector, she said.
Wren’s students are less concerned about upward mobility and more about receiving the training they will need to find their way into a philanthropic or nonprofit setting and finding a meaningful job. Though they may remain in the nonprofit sector because that type of work is important to them, they will likely move around more than previous generations of workers.
Ragan said friends of his who work in the automobile industry used to tease him about his inability to keep a job. But to move up in the nonprofit world, people have to move around, especially if they aren’t part of a larger nonprofit where there is room for advancement internally, he said.
DEFINING THE PATH
Professionals who entered the fundraising field early on, like Ragan, often didn’t have a well-defined point of entry. Typically, these workers started out at smaller nonprofits and went on to larger nonprofits such as symphony orchestras or hospitals where they had greater opportunities to move up.
“We’ve made some strides there, but there’s still a lot of work to do with providing a clear path of entry to the profession,” Ragan said.
Weatherston said what he is seeing is a failure on the part of many nonprofits to provide clear descriptions of the career path for individuals coming out of mid-level careers to be ready for executive positions.
“There has been a tendency, exacerbated by reductions in available resources, to not show Millennials a clear path to get to where they are running something or in an executive role,” he said. “With no clear pathway, they don’t have a logical progression within a nonprofit and look at other nonprofits rather than internal development.”
Although younger generations of workers are more comfortable with not staying in one job for a long period of time, nonprofits still need to have people with experience within their ranks, Ragan said.
“Nonprofits need to figure out how to attract talented people and develop opportunities to retain them,” Ragan said. “Part of this is that if they can’t move people up, they need to find ways to grow a role.”
This includes encouraging employees to think outside of the box to create an open and safe atmosphere for sharing those ideas. It also includes supporting the efforts of people on a nonprofit career track who want to start their own nonprofits to address unmet needs.
“Within nonprofits, there’s a huge emphasis on entrepreneurism and creativity,” Ragan said. “They value anyone that has ideas for how they can generate more earned revenue. This could be something related to their mission that also provides net revenue. For universities, it could be taking their intellectual property and spinning it off.”
This drive to find new and better ways of raising money and keeping the mission of any nonprofit in front of people with ever-shrinking resources is expanding the responsibility requirements of available jobs. Where nonprofits used to have the luxury of hiring someone to do nothing but graphics or marketing, those roles are increasingly being expanded to include fund development, client outreach or data development, sources said.
While Ragan’s organization is still looking for people who are passionate about mission, it also is looking for people who are able to understand and work with data and outcomes.
“Being comfortable with taking that good work that we’re doing and converting that to measurable outcomes is critical,” Ragan said. “There’s a lot of pressure around I.T. and most of us don’t have a specialized staff to do that, so we need all of our employees to have a strong skill set in data and the ability to take advantage of social media because you can acquire donors more efficiently through investment in digital campaigns.”
MiBiz coverage of Michigan’s nonprofit sector is made possible through a generous sponsorship by the Grand Rapids Community Foundation, a leader in funding, initiating and leading programs that benefit the Grand Rapids area in the arts, community development, education, environment, health, and human services. For more information, visit grfoundation.org.