Nonprofit organizations could be hard hit by talent shortages
exacerbated by the large cohort of baby boomers soon entering their
retirement years, but there will also be opportunities, according
to a report from The Conference Board, a global research and
business membership organization.
"While growth in the nonprofit sector is outpacing growth in the rest of the economy, talent shortages are already affecting critical service sectors, including healthcare and social services, in which nonprofits are heavily represented," says Jill Casner-Lotto, author of the report. "Also, widespread executive-level and leadership skill shortages currently affecting many nonprofits are predicted to get much worse as the sector expands and experienced executives retire."
Nonprofits have not invested significantly in their human resource management, putting their limited resources instead toward their mission. In addition, many funders restrict their support to specific programs or services as opposed to broader human resource development. This under-investment in managing talent has led to some of the challenges nonprofits now face in terms of staffing, leadership, and succession.
Nonprofits are growing rapidly in number, size, budgets, and job creation. By several measures, growth in the nonprofit sector is outpacing growth in the rest of the economy. According to Nonprofit Almanac 2007, while U.S. gross domestic product increased by less than 37 percent from 1994 to 2004 after adjusting for inflation, all three of the major financial measures of nonprofits (revenues, expenses, and assets) increased by at least 56 percent.
But many nonprofit organizations, particularly the smaller and midsize ones, lack the bench strength or staffing depth, as well as the time and money, to develop younger leaders coming up in the organization.
These labor shortages are occurring at a critical time for nonprofits. In this era of increasing corporate governance, board members are holding nonprofits more accountable. Also, growth and consolidation in the sector have resulted in larger organizations that often require more complex management skills.
With Problems Comes Opportunity
The advent of retirement for a vast majority of baby boomers also brings opportunity for nonprofit organizations.
"Baby boomers, compared with previous generations, are healthier, more educated, and wealthier than any previous generation, and more inclined to stay in the workforce," says Diane Piktialis, Mature Workforce program leader at The Conference Board. "Many current older employees plan to work past traditional retirement age, but not always with their current employers. This burgeoning trend provides a time-tested source of labor for nonprofits."
A considerable number of baby boomer employees in the private sector are considering a move to the nonprofit sector where they can use their experience and skills in social-purpose work. This generation came of age during tremendous social change and some want to return to their roots in bringing about social changes, says Casner-Lotto. Nonprofits can tap into other sectors' talent pools and their own mature workers to recruit experienced leaders, staff, and volunteers.
"But action is needed now," says Casner-Lotto. "Evidence suggests that nonprofits are seriously lagging behind the government and private sectors in efforts to both retain highly skilled potential retirees within their organizations and actively recruit older hires from other industry sectors."
For example, few nonprofit organizations have developed flexible work options to meet baby boomer preferences. The report describes some best practices underway in the nonprofit sector, as well as an overview of private and public sector responses.
Ten such examples are being honored today with the first-ever BreakThrough Award. Created by Civic Ventures, a think tank and program incubator helping society achieve the greatest return on experience, and funded by MetLife Foundation, the award recognizes organizations that are using innovative methods to employ people over 50 in meaningful jobs that serve the public interest.
The ten winners, which include employers and organizations that serve as connectors to other employment opportunities, cover a range of social needs. A program in rural Pennsylvania employs retired Teamsters to provide rides to seniors, the disabled, and children. A Kentucky winner employs people over age 50 as ombudsman to meet the needs of nursing home residents. And a park in Cleveland employs boomers as seasonal outdoor employees.
One of the key qualities that the winners share is flexibility, which includes offering part-time and full-time positions, varied workday schedules, telecommuting, and the ability to shape their positions' responsibilities. Those jobs that accommodated the schedules, commutes and other needs of workers were more effective at recruiting, hiring, using, and retaining employees. As a result, some BreakThrough winners report lower turnover and less absenteeism for older employees compared with younger counterparts.
Experts in the field of civic engagement and aging note that retiring boomers may very likely be looking for a mix of activities—combining paid work for an employer with volunteering for a different nonprofit organization. If this is the case, nonprofits stand to gain in a major way, reaping the benefits of boomers' professional or management skills and experiences in both paid and service positions. Currently, almost a quarter of baby-boom volunteers (23 percent) report they provide professional and managerial skills in their volunteering positions, according to the Corporation for National & Community Service.
The Conference Board Mature Workforce Program will continue research on these nonprofit issues with a fall launch of a new Research Working Group on managing an aging workforce at nonprofits. This research is funded by a major grant from The Atlantic Philanthropies.
Source: "Boomers are Ready for Nonprofits, But are Nonprofits Ready for Them?" Report # E-0012-07-WG, The Conference Board.