Did you know there are more than 75,000 non-profits in Michigan with over two-thirds located in Metro Detroit?
And did you also know they collectively generate over $240 million annually and impact thousands of causes affecting people’s lives?
Yes, non-profit organizations are a major force and provide valuable services to many across this region and state.
However, In order to continue to thrive in an economy and market where resources fluctuate, a talented, diverse leadership group is required. I wanted to find out more about the challenges with respect to recruiting from a diverse pool, so I reached out to Blaire Miller, Partner and co-founder, The Hunter Group (http://www.huntergroup.com/), a Bloomfield-based recruiting firm formed in 1995. An area of emphasis for the firm is recruiting top non-profit/high-impact executive leadership.
There are several trends in the region’s significant non-profit world including fast-moving generational leadership and staff shifts, need for qualified and diverse board members and strong focus on impact and diversity of funding streams.
Given this landscape, I talked to Miller for her perspective on identifying, attracting, recruiting and retaining diverse talent for the non-profit sector in an ever-changing, challenging market such as Detroit.
Lee: It appears 2017 is going to bring a great deal of change when it comes to talent, culture and employee engagement for non-profits. What are your thoughts?
Miller: We have more than 75,000 non-profits in Michigan holding nearly $250 million in assets, generating almost $240 million in annual income. Interestingly, almost two-thirds are located in Metro Detroit. Guidestar.org, Nonprofit HR, and The Improve Group partnered to survey hiring trends in the non-profit sector, and the 2016 Nonprofit Employment Practices Survey point to several areas of opportunity:
- 57% of non-profits anticipate creating new positions (versus 36% in the private sector).
- Fewer non-profits are decreasing staff size this year, compared to last year.
- Fundraising/Development jobs show strongest growth, though Direct Services and Education/ Community Outreach follow closely behind.
We have recruited Michigan non-profit leaders for more than 20 years and we are keeping a close eye on emerging trends as we recruit for top social impact leadership positions across Michigan and the U.S.
Lee: What are the key shifts that may significantly impact the nonprofit sector in 2017?
Miller: Generational changes will force nonprofits to re-evaluate their talent and cultural strategies. The workforce is enduring a major generational shift and the nonprofit sector is no exception. More than 3.6 million baby boomers are expected to retire over the next year, and millennials are now the dominant generation in the workforce. In fact, nonprofits may feel the effects of this change even more than for-profits as nonprofit employees typically skew older.
But it’s not just aging boomers who are causing generational shifts. The Public Service Loan Forgiveness Program has made it possible for young employees of 501(c)(3) organizations to receive partial forgiveness for their student loan debt in exchange for their nonprofit service, and millennials, who face more school debt than any previous generation, are becoming increasingly interested in nonprofit work thanks to these attractive incentives.
Generational changes will impact all facets of nonprofit organizations in 2017, from management styles to recruitment and employee engagement. Millennials possess a different set of values and expectations than older generations, and forward-thinking organizations are already figuring out how to cater to their unique needs. We see our clients often choosing a flatter organizational structure so that millennials and incoming Gen Z can play a role in decision making earlier in their careers. But ready or not, here they come.
Lee: These generational transitions will certainly create opportunity and signification mission shifts. What else do you see?
Miller: Continuous board recruitment. The struggle to recruit and retain dependable board members – who can also fundraise – is real for nonprofits in Michigan and around the country. 80% of boards are actively recruiting between 1–6 members, often with the assistance of experienced executive recruiters such as The Hunter Group. Many of our stellar community fundraisers are retiring or burned out, and many of our tenured staff leaders are retiring.
The good news is there are plenty of young and middle professionals eager to make a difference in their communities. These individuals, known collectively as millennials and Generation X, are seeking to give, volunteer and lead… all good things. The organizations that succeed in boosting their board membership and bottom lines in 2017 are those that plan for succession by systematically recruiting and training these next generations to lead their missions.
We recommend that our clients start by looking in their donor and constituent pools and recruiting people who already love their mission by cultivating board members as individuals and making time for socializing and networking. Before long, they have a powerful new group of people injecting life into their worthy missions.
Lee: Clearly, they need the key business skills in addition to mission passion, correct?
Miller: Oh yes, both elements are critical to move the organization forward and we look for both elements when recruiting. Non-profits will change their candidate screening processes to eliminate hiring bias.
BoardSource, a non-profit focused on board leadership issues, cites in its recent statistics that nonprofit boards are mostly made up of over-50s, with 43% between 50 and 64 and another 15% aged 65 and over. But younger generations also coming through the ranks, with 12% aged between 30 and 39 and 28% between 40 and 49. Additionally, while women chief executives are in the majority on nonprofit organizations (62% of CEOs, against 38% male CEOs), and boards are about even, with 45% female and 55% male, diversity of ethnicity is a different story. Caucasians make up 82% of boards.
While experience counts, we firmly believe in our board and executive recruiting that non-profit boards need cultural and ethnic diversity to innovate through open discourse and varied experiences in addition to age and gender.
Lee: How can you enable this shift in board make-up?
Miller: With our clients, we are evaluating the current board composition and evaluating its strategic growth plans to determine what are the skill sets needed and what diversity is valuable to the mission and organization as a whole. We are also looking for leaders to help building a culture of philanthropy.
It used to be that fundraising was the concern of a single person or department, separate from the day-to-day work of the organization and its other staff. There were few connections between the work being done and the “asks” being made, and most people avoided the fundraiser’s office. In 2016, we’ve seen more nonprofit leaders cultivate a “culture of philanthropy” within their organizations. They’re reframing every interaction between every person as an opportunity for increasing awareness and support. They’re empowering front line staff with information and tools to make connections. And they’re giving supporters – and board members – more hands-on opportunities to get involved in the mission.
We know this culture is important to attracting new donors and leaders to the nonprofit world. In 2017, we are finding leaders who find more ways to involve everyone at every level of the organization in selling (and living) its critical mission.
Lee: Do you find non-profit leaders to be more externally-focused as a result of the culture of philanthropy?
Miller: Most certainly, the days of government funding are fading and non-profits have to build diverse revenue streams and impact metrics to demonstrate how donor funding is best and most efficiently employed. Administrative costs such as labor costs is of high concern as well as growth in turnover rates.
Another non profit recruiting trend is the growth in turnover rate. Increased turnover means that the volume of recruiting will increase significantly, but the non-profit’s reputation for high turnover can also impact its ability to recruit new talent. Given the high impact of new hire turnover, non profits will need to begin assessing candidates on their likelihood of an early departure.
It’s certainly a candidate market, with the years of the recession fading and giving candidates more choices and opportunities for employment. Increased voluntary turnover suggests nonprofit employees’ confidence in the job market.
We know from experience that each mission in unique and it’s the mission and culture fit in addition to experience that are most critical to long-term employee retention.
These are the top trends we are seeing in our executive recruitment work and are so fortunate to help our incredible high-impact clients serve their critical missions in our community by building top leadership teams as well as diverse boards to govern them through the next decades.