Nonprofits Competing with Socially Conscious Corporations for Purpose-Driven Talent

Nonprofits Competing with Socially Conscious Corporations for Purpose-Driven Talent

The 2017 Nonprofit Employment Practices Survey, published recently by Nonprofit HR, shows how the nonprofit sector is being affected by the tight market for talent in the US and the growth of social enterprise organizations as a competitor in that market. Overall, the survey finds, the nonprofit hiring market is robust, with half of the 420 US and Canadian nonprofits it surveyed saying they planned to add staff in 2017. That figure declined by seven percentage points from 2016, however, whereas corporate hiring expanded, which the report attributes “at least in part to the growth of social enterprise and purpose-driven business.” In other words, the candidates who would normally seek out jobs at nonprofits are being attracted instead to socially conscientious for-profit businesses.

As the millennial generation has grown up to become the largest segment of today’s workforce, this generation’s values and interests are significantly influencing the way employers engage candidates and employees. Millennials do have a particularly strong interest in making a difference in the world, with a recent survey finding that 75 percent of US workers between the ages of 18 and 34 expect their employer to take positions on social issues affecting the country. Yet even though millennials may be driving the trend of a purpose-driven workforce, these interests are not unique to them.

Despite facing increasingly stiff competition, most nonprofits are not taking steps to improve their recruiting, talent management, and culture practices, the Nonprofit HR survey shows. 64 percent of organizations said they had no formal recruitment strategy, while the number that said they did has been declining over the past two years. Additionally, 70 percent have no dedicated recruiting budget, 69 percent have not engaged in an employment branding process, 81 percent have no formal retention strategy, and 52 percent do not have a diversity and inclusion strategy.

Nonprofits face similar labor market challenges to for-profit enterprises, however, with respondents saying their biggest talent challenges by far were hiring qualified staff within limited budget constraints, maintaining salary budgets against market pressures, and finding qualified staff in the first place. Lisa Brown Alexander, president and CEO of Nonprofit HR, tells SHRM’s Roy Maurer that nonprofits need to step up their investments in recruiting and retention in order to be competitive in today’s talent market:

“If your nonprofit hopes to keep up with increasing competition for talent, you must make the appropriate financial resources available to support your people,” Alexander said. She advised HR to develop talent acquisition and retention strategies that align with the organization’s strategic plan and to advocate for an increased investment in recruiting.

“Less than 1 percent of nonprofit funding has historically gone toward supporting talent,” she said. “Show your leadership, board and funders these data and discuss what you can do together to begin to drive change.”