With more limited resources compared to for-profit businesses but an equal need for talent, nonprofits must turn to other incentives for attracting and retaining qualified, passionate people.
Oftentimes, that comes down to two key focus areas: mission and culture.
Kathy Crosby, president and CEO of Goodwill of Greater Grand Rapids, said that the social mission aspect has especially become more important as millennials have grown into the largest generation in the workforce.
“One of the advantages nonprofits seem to have right now, particularly with our younger workers, is that what we do is meaningful and it’s easy for them to identify with,” Crosby said. “The employees we have are often attracted by the mission and the contact with the people in the community who need us. That shift in thinking by this generation of workers has in some ways put us in a great spot.”
It’s hard to know exactly where that shift came from, said Bill Gesaman, strategic growth officer for the Lansing-based Michigan Nonprofit Association (MNA), but he suspects that it’s due to increased transparency in the world at large.
“It’s easier to find out which corporations are socially responsible,” he said. “I would imagine that plays into it a bit — the ability to find out which corporations align with your values and which ones don’t.”
MAKING A CHANGE
While that social responsibility does play a relatively increased role in millennials’ minds, it also draws in older generations from the for-profit world, according to Gesaman. Many C-suite and executive-level positions in nonprofits are now being filled by people transitioning from corporations. That includes MNA’s own president and CEO, Donna Murray-Brown, who came from banking.
“It wasn’t about the money,” Gesaman said. “It was about having a passion to make a social impact to have a big change. That’s something nonprofits are benefiting from, whether they realize they’re leveraging it or not.”
The Grand Rapids-based Heart of West Michigan United Way is in a similar position, as CEO Michelle VanDyke joined the organization this year after retiring from more than 30 years with Fifth Third Bank. United Way’s vice president of marketing, Ellen Carpenter, said the transition from for-profits to the more “purpose-driven” nonprofits is becoming a common route for retirees looking for a second career.
At the same time, Carpenter believes that all businesses can attract the younger generation by being socially responsible. It’s just that nonprofits “have that naturally built in, because we’re mission-driven.” Much of United Way’s work, however, is focused on helping businesses become more socially responsible, whether through best practices or volunteer opportunities.
In Grand Rapids specifically, Carpenter said the business community has a goal of having the most B Corporations (or “Benefit” corporations) per capita. B Corporations are for-profit businesses certified by the nonprofit B Lab as having met high standards for social impact and transparency.
Overall, for-profits and nonprofits are more similar than they are different, according to Carpenter. Every organization has the same end goal, which is to create an environment that attracts “talented and educated people that are passionate for the mission or the company,” she said.
“I think the basics of having happy people that work for your organization are the same, regardless of what industry you’re in,” Carpenter said. “We just have to be a little more creative with how we do that for our team.”
Although the results may be the same, the process is often different. For instance, while for-profit companies may have the resources to send their employees to professional development seminars, nonprofits find other ways to develop those skill sets. Much of that involves mutually-beneficial collaboration with other nonprofits, which provides employees with learning opportunities while keeping administrative costs low, Carpenter said.
The other difference between the two sectors is that nonprofits expect their employees to be passionate about the organization’s mission, she added.
“I don’t know if you have to be passionate about banking,” Carpenter said. “But a bank is going to want their people to feel connected to the community. How you connect your organization to others around you is important regardless of the industry.”
‘CULTURE OF RESPONSIVENESS’
For some nonprofits, those resource constraints are seen as an opportunity. Crosby said Goodwill has accepted its place in the salary “spiral.” With 24 stores in the greater Grand Rapids area, the nonprofit has a strong need for technology talent, but generally attracts entry-level tech workers.
“We know they’ll stay with us for a period of time and then will be lured away — and should be — by higher salaries, because now they have experience,” Crosby said. “In technology, I think we’re a bit of a training resource.”
Goodwill is fine with that process, Crosby said, adding that donors have expectations that administrative costs be kept at a certain level. Generally, the organization targets the 50th percentile of total compensation for each position compared to other similar jobs in the region.
Not being a salary leader means nonprofits have to be intentional in creating a culture that listens closely to employees and values their input, Crosby said. For example, Goodwill this year cut one type of insurance that was barely being used, allowing employees to save on their out-of-pocket health care costs.
Similarly, the company was once closed on Martin Luther King Jr. Day every year, but employees last year began asking about other holidays such as Rosh Hashanah and Cinco de Mayo. Now, employees have been given three days to be used for any holidays that are important to them personally. Crosby said that being flexible and respectful in that way is key to retention.
“That culture of responsiveness has helped us keep people who find in us a place to balance some of the challenges,” she said.
Another key to retaining employees in any position is making sure they’re in the right position in the first place, according to Gesaman. The MNA works with groups from around the state to assess candidates’ strengths and passions and how those would best fit into the nonprofit sector. The organization’s goal is to create a guided, diverse pipeline, he said.
DIVERSITY IN EVERYTHING
Nonprofit industry sources said diversity remains a top priority in the talent-attraction process. Gesaman recognizes that it may be more difficult for the many smaller nonprofits to put together a truly diverse team, but having a diverse board or group of volunteers can also help. He said it’s not just racial diversity: It’s also socio-economic, sexual orientation and more.
United Way’s Carpenter pointed to age as an important aspect of diversity as well.
Goodwill’s recruitment strategy is built on diversity, according to Crosby, who added that the organization’s full-time recruitment officer looks across all populations, seeking out workers who need somewhere to start earning experience.
“Because of our niche in the marketplace as a nonprofit in workforce development, we will work with people in a different way to prepare them,” she said. “I like to think we see beyond sometimes the initial presentation. We’re really, as a recruitment strategy, looking at a very broad group of people that we’re willing to hire from to bring into our stores and entry-level positions.”
If the economy continues on its upward path, a willingness to put that time and energy into developing entry-level workers may be key to managing growth. According to the 2016 Nonprofit Employment Practices Survey conducted by Nonprofit HR, 57 percent of nonprofits anticipate creating new positions this year. That’s compared to 51 percent of nonprofits increasing staff size in 2015, and 19 percent doing so in 2009.
Goodwill is opening a new store this October, which means a search for two dozen new employees, a new store manager, more truck drivers, and so on, Crosby said. The talent shortage is generally an issue across all 163 regional Goodwill organizations nationwide, she said, forcing those groups to find ways to do more with less.
“It does have us looking at finding new inefficiencies and opportunities for mechanization,” Crosby said. “How are we going to do this if the talent marketplace stays this constrained? We have a shortage of workers and there doesn’t seem to be an end spot for it.”