Collectively, nonprofit organizations are the third largest employer in the United States, accounting for roughly 10% of all paid employment, and comprising 12.5 million Americans. Moreover, this paid workforce is joined by 63 million volunteers, according to Independent Sector. Labor costs typically account for 50 to 80% of a nonprofit’s budget, representing a significant commitment of resources. Hence, management of human capital is critical to success in the nonprofit sector.

Key to viability of nonprofit organizations is a skilled, trained staff with the capacity to adapt to rapid and often unstructured change. To provide this essential human capital, organizations must engage in strategic human resource planning that assesses trends and the external environment to project future events. Functionally, strategic human resource management includes job analysis, recruitment and selection, compensation and benefits, training and professional development, performance measurement, labor-management relations, and integration of volunteers into the organizational environment. Diminished funding, increased emphasis by employees on work-life balance, changes in technology and heightened competition for high-performance individuals mandate collaborative development of programs, policies and responsibilities that are compatible with the organization’s overall strategies. Enhancing employee performance, reducing turnover and providing the basis for future top talent within the organization allows the nonprofit to remain mission-focused, relevant and innovative.

Nonprofits are accustomed to competing with for-profit organizations for talent. Today, the importance of employee recruitment and retention is critical. According to the Bureau of Labor Statistics, the U.S. had 10.4 million job openings as of the end of September 2021. Strategies to enhance recruitment and retention of talent in the nonprofit sector are varied and include consideration of underlying employee motivations, comparable pay and benefits across genders and races, employee on-boarding and training, job flexibility, stress reduction programs and practices, and commitment to maintenance of healthy employee relationships, among myriad others.

Recommendations

A review of the research on employee recruitment and retention suggests five key ways in which the nonprofit leader may contribute to developing a sustainable, high-quality workforce.

1. Carefully consider the type of individual that will help the organization move forward. Failing to consider what the future of the organization could or should look like may lead to simply reproducing the old organization through new hires. This edict has implications for both recruitment and retention. Once recruited, consider whether these talented, innovative individuals will find that their ideas are accepted or met with blanket resistance. Create a culture which fosters the former.
2. Research what is relevant and attractive to these types of individuals, in terms of both recruitment and retention. Consider industry, regional and generational differences. Do not make assumptions based on current employee preferences.
3. Imagine not only the future of the organization, but the future of the individuals who support its mission. What professional paths can the organization offer the truly exceptional employee?
4. Strive for overlap between those factors which are important to recruitment and those which are important to retention. Are there factors which are important to retention that are under-appreciated by job applicants? Can you “market” those features during the recruitment process? Conversely, are there features that are attractive to job applicants that may become a source of frustration later (such as good starting pay but few raises)? If so, can you address this matter? 
5. Examine the barriers the organization currently faces in terms of both recruitment and retention. Some may be challenging, but others may be remarkably easy to correct. For example, if workplace stress is high, consider employee workout teams and competitions or changing processes and upgrading software to reduce stress.

The answer to the question, “How can nonprofit leaders successfully recruit and retain staff?” is likely this: By articulating a vision for the next generation of employees and being proactive in its pursuit.

Susie Pryor is a graduate of the Master of Nonprofit Leadership and Management program at Arizona State University. She holds undergraduate and graduate degrees in management and a PhD in marketing. For the past 20 years, she has helped develop entrepreneurship programs at universities in the Midwest and Southern California. Her research has been published in journals including the Journal of Consumer Behavior, Place Branding and Public Diplomacy, and the International Journal of Nonprofit and Voluntary Sector Marketing. Susie currently serves as director of the Master of Arts program in Organizational Leadership at Buena Vista University in Storm Lake, Iowa, and as the Associate State Director and CARES Act disaster relief specialist for the Kansas Small Business Development Center. Susie owns a boutique pet care facility in Missouri. She lives in Topeka, Kansas, with her cattle dog, Paxton.

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