It’s hardly a secret that the human services and nonprofit sectors have long underinvested in their most valuable asset - their people - and over the last decade this problem has unfortunately gotten worse, not better.
But we predict that the tide will finally begin to turn in 2018; this will be the year when talent will become a top priority for nonprofits and their funders. Why? It’s safe to assume that the changing political climate and administration in the US will put future investments in social programs and services at risk. As a result, the demands placed on nonprofit organizations will likely increase while financial support and government funding decreases. Human service agencies, nonprofits, and their supporters are now being forced to recognize that if they hope to effectively address the needs of their communities and advance their missions in the years to come, they must have creative, capable teams in place who can find ways to deliver results under difficult circumstances. Employees - qualified, well-resourced, engaged employees - are the answer to many of the challenges the sector is currently facing and will face in 2018.
But a growing emphasis on talent investment is only one of the trends that should shape your nonprofit’s approach to workforce management in the year ahead. Other trends like the changing demographics of the workforce and the growing ineffectiveness of older workforce management systems also have the potential to permanently reshape your organization’s strategy this year. Here are the three biggest trends we've identified in the industry and how to get ahead of the curve:
Younger, more diverse leaders have become a force for change
Workforce demographics are shifting. In 2014, the Millennial segment of the U.S. labor force surpassed the Baby Boomer segment, and in 2015 Millennials overcame Gen Xers to become the largest generation in the workforce. This group continues to grow in both size and influence and by 2020 it's estimated that 75% of the American workforce will be Millennials or younger.
In the corporate sector, this means that more young people are taking up leadership roles and becoming a force for change. Deloitte’s Global Human Capital Trends report points to the recent emergence of a “new organization” that has been greatly affected by Millennial leaders. As Millennials step into leadership roles, the report explains, they bring an expectation of purposeful work, ongoing learning, and a strong focus on diversity, equity and inclusion that permeates entire organizations.
But the human service and nonprofit sectors lag behind in this space. Nonprofit HR's Talent Management Priorities Survey found that 42% of nonprofits rank attracting and hiring diverse talent - including millennials, people of color, staff over the age of 50, LGBT staff and individuals living with disabilities - as their top talent acquisition priority for coming years. The fact that many organizations are prioritizing diversity is a positive first step, but the reality is that leadership roles in the nonprofit sector - particularly those in the largest of nonprofits - remain dominated by older, Caucasian men. There is a tension between where the workforce is going and where the sector currently stands.
We predict that 2018 will be the year when nonprofits follow the example of private sector companies and social enterprises and begin to empower younger, more diverse leaders to actually lead. This shift won’t be a reaction to the myth that the for-profit sector is somehow smarter or more strategic than the social sector, but rather a forced change in response to growing competition for funding, support, and talent. Many nonprofits are quickly realizing that if they don’t evolve their people practices in response to the shifting workforce demographics and competitive dynamics, they may end up putting their missions at risk.
WORKFORCE management systems are evolving and improving
Organizations of all types are recognizing the limited effectiveness of manual processes and older, traditional workforce management systems. The nonprofit sector is no exception. Some 39% of respondents to the 2017 Nonprofit Talent Management Priorities Survey ranked restructuring existing management systems and programs as their top workforce management priority for 2017. We expect that quantum shifts are on the horizon in this area for the nonprofit sector in 2018.
The evolution towards more skilled work that requires “deeper expertise and analysis, more independent judgment, and better problem-solving skills,” which can be championed through democratized access to data and reporting results, is a driving force behind the transformation of workforce management. In many instances, it's motivating organizations to completely rethink how they manage their HR processes.
We’ve already seen this trend begin to take hold among several of our nonprofit clients. Many of our clients noted that things such as manual scheduling processes, a lack of integration between HR, Payroll and Finance solutions, a lack of mobile access to data and employee information such as T4s, expense reports, remaining vacation days, etc, were some of the main barriers to being able to manage their workforce effectively.
There are many options on the market when it comes to Workforce Management solutions, and sometimes it can be hard to sift through the noise to find the one that's best suited to your nonprofit's particular needs. When it comes to choosing a solution, there are a few must-haves that you should ensure the solutions you're considering includes. Without these features, many nonprofits find that their processes are still difficult or ineffective, but now simply digital. Some questions to ask of the solution your organization is considering are:
- Does it integrate HR to Payroll to Finance, ensuring a seamless flow of information and removing the possibility of data duplication or inaccuracies due to manual processes or constant downloads/uploads of information?
- Does it have scheduling functionality that uses smart data to help you schedule employees across locations and roles based on seniority and qualifications, and allow you to easily replace shifts without the headache of calling around manually?
- Can it manage your applicants efficiently, onboard new employees smoothly, retrieve all employee data from a centralized place, and empower your employees with appraisals and training?
- Does it let your employees make changes to personal information and access tailored information at any time, across any platform, without having to bother your HR team or fill out paperwork manually?
- Is the solution built upon a system that is robust, secure, and easily upgradable - ensuring that your data is protected and support is easy as technology evolves or your needs change?
These are just some of the questions you should be asking of any workforce management solution you're evaluating to ensure you'll be giving your employees the right tools to manage their responsibilities effectively.
Underinvestment in nonprofit talent is beginning to be seen as a true risk to the industry
There is no single party to blame for the chronic underinvestment in nonprofit talent we mentioned earlier. It can in part, however, be attributed to a misaligned supply and demand relationship between nonprofits and their funders. As Fund the People’s Rusty Stahl explains:
“Funders rarely craft their funding to intentionally invest in the recruitment, retention, compensation, development, or retirement of a grantee’s people. In fact, the signals grantmakers send often encourage nonprofits to de-emphasize staff development and stress programs and projects instead. With most nonprofits trained not to ask for investments in talent, the demand is kept artificially low. This keeps talent issues off most funders’ radar, starting the cycle all over.”
But this year, we expect to see both supply and demand for talent investments increase. Thought leaders in the nonprofit talent space are becoming increasingly vocal about this need and the most progressive funders are beginning to take notice. The open-ended responses to the 2017 Talent Management Priorities Survey indicate that organizations are starting to see talent underinvestment as a true risk. This theme emerged repeatedly when respondents talked about their biggest hurdles in the area of talent.
Yet simply viewing talent underinvestment as a risk is not enough. This year more than ever, nonprofits must put strategies, systems, and processes in place that make resources available for the attraction, development, enablement and retention of nonprofit talent.
We need to start by breaking the vicious cycle. Nonprofit leaders must ask their donors and funders for the talent investments their organizations require to be successful. At the same time, members of the funding community must recognize the issues and causes they support can be significantly compromised by a failure to appropriately allocate resources for talent. Nonprofit executives must also see the need for and value of investing in talent. Much like they wouldn’t imagine under-resourcing the fundraising and programs functions, they must also prioritize employing a quality workforce. Equally important, resources must be re-allocated and approaches must be shifted to allow organizations to align their human resources strategy with their organizational strategy and make appropriate investments in talent needed to foster impact and sustainability.
As talent investments improve, so too will the nonprofit sector’s ability to lead in the face of the many changes and challenges that lie ahead in 2018 and beyond. What are you doing today to transform your organization’s approach to workforce management now and in the future? What kind of tools can you use to make this crucial aspect of any organization run like a well-oiled machine?
One option is Sparkrock's Workforce Management solution, which helps nonprofit organizations easily manage staff so they can operate as effectively as possible. Some of the main features of our solution are:
- Comprehensive and intelligent online shift scheduling and bidding.
- Effective applicant and employee management that can unite data from multiple locations in one common tool.
- Robust time, attendance and payroll tools that are sustainable into the future as your organization grows and evolves.
- A convenient and secure employee self-service portal that's accessible from anywhere and on any type of mobile device.
- Seamless integration between Finance, HR & Payroll - ensuring your staff are always paid correctly and on time.
What other workforce trends have you seen or experienced that you think will impact the Nonprofit sector in 2018? Let us know in the comments box below.