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Nonprofit employers are hiring more aggressively this year than their for-profit counterparts, maintaining a trend from the last several years, although that gap is narrowing, according to new research.
The 2017 Nonprofit Employment Practices Survey, conducted by Nonprofit HR, a Washington, D.C.-based HR consulting firm that works with the nonprofit sector, found that half of 420 nonprofits in the U.S. and Canada anticipated increasing staff levels in 2017.
However, the percentage of nonprofits that planned to hire shrunk 7 percentage points between 2016 and 2017. At the same time, the corporate hiring outlook is the best it has been in a decade, with 40 percent of for-profit companies saying that they planned to hire in 2017, up four percentage points from 2016, according to CareerBuilder's annual jobs forecast.
Part of the reason for the narrowing gap is the growth of corporate social responsibility initiatives and companies marketing themselves as being purpose-driven, which research shows appeals to Millennials and members of Generation Z eager to contribute to companies with a positive mission and vision, according to Nonprofit HR.
"With social enterprises and purpose-driven businesses experiencing tremendous growth, it is only going to get more difficult for nonprofits to attract and retain the top performers they need to advance their missions," said Lisa Brown Alexander, president and CEO of Nonprofit HR. "The results of this year's survey clearly illustrate the need for nonprofits to prioritize their people, and the talent and culture strategies that support them."
Today's workers want to see that they are having a meaningful impact on the world, said Paul D'Arcy, senior vice president at job search engine Indeed. "For this reason, we've seen a growing interest in not-for-profit work and many businesses increasingly emphasizing the social purpose of their mission."
[SHRM members-only toolkit: Introduction to Corporate Social Responsibility]
Addressing urgent housing needs is the driving force behind attracting top-notch talent to Habitat for Humanity International, the top-rated nonprofit from 2015-17, according to Indeed's company reviews database. Headquartered in Atlanta and Americus, Ga., the global nonprofit operates in more than 1,300 communities across the United States and in more than 70 countries.
"We take pride in being inclusive and mission-driven," said Jonathan Reckford, CEO of Habitat for Humanity International. "Our work simply would not be possible without the thousands of staff and volunteers in the United States and around the world who are bound together by a common sense of purpose."
But that purpose-driven message may be getting lost for many nonprofits in a competitive recruiting landscape where more employers are branding themselves with that mantle, while nonprofits are failing to keep up with talent acquisition best practices, according to the report.
Sixty-four percent of nonprofits do not have a formal recruitment strategy, and 70 percent reported that they have no formal recruitment budget. A whopping 81 percent have no formal retention strategy. About 70 percent have not developed an employment brand, despite the important role branding plays in attracting top talent. Only 33 percent of nonprofits said they use an applicant tracking system or candidate relationship management platform, tools that can make recruiting more efficient and improve the candidate experience.
Onboarding is a bright spot, however, with 63 percent of nonprofits saying they have a formal onboarding process and 31 percent reporting that they use an informal process.
Invest in Your Recruitment Function
Over one-quarter of nonprofits cite an inability to hire qualified staff within a limited budget as their top staffing challenge. This was the most commonly cited top challenge among nonprofits surveyed.
"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."
Jason Walker, the director of talent acquisition at Habitat for Humanity International, said that a winning workplace culture requires a well-structured, strategic hiring plan. "In support of our mission, we act intentionally to attract talent that has both the values and skills to expand Habitat's impact and the way we address housing needs," he said. "It would be impossible to build such a workforce if we didn't invest appropriately in the latest sourcing technology and seasoned recruiters. Our HR division has an annual recruitment budget and a talent acquisition department to carry out recruitment campaigns at the domestic U.S. and international levels, using sourcing technology and trained recruiters."
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