While nonprofit organizations are growing in size and stature, they haven't historically invested in succession management and are having problems finding talented workers, especially for senior executive positions. Scores of baby boomers are on the cusp of retirement, however, and could be part of the solution, industry experts contend.
According to a report released earlier this year by the Urban Institute, between1994 to 2004, financial measures of nonprofits - revenues, expenses and assets - increased by 56%, compared to the U.S. gross domestic product, which increased by 37%.
Despite nonprofits' growth, qualified nonprofit executive directors are in short supply, and statistics indicate the problem is only going to get worse. According to a 2006 study published by The Bridgespan Group, nonprofits will need to recruit and develop 640,000 new senior managers over the next decade - nearly two-and-a-half times the number currently employed.
"While growth in the nonprofit sector is outpacing growth in the rest of the economy, talent shortages are already affecting critical service sectors, including health care and social services, in which nonprofits are heavily represented," remarks Jill Casner-Lotto, a consultant with The Conference Board and author of a new report, "Boomers Are Ready for Nonprofits, But Are Nonprofits Ready for Them?"
"Also," continues Casner-Lotto, "widespread executive-level and leadership skill shortages currently affecting many nonprofits are predicted to get much worse as the sector expands and experienced executives retire."
New opportunities
Nonprofits generally have not invested significantly in human resource planning and succession management, choosing instead to allocate limited resources to activities pertaining to their mission. However, recently nonprofits have begun showing an increasing interest in recruiting and retaining a vibrant workforce, and the impending retirement for many boomers presents previously unexplored opportunities.
"Generally, nonprofits have shown little interest in mature workers, in most cases because they haven't even been on their radar screens," says Diane Piktialis, mature workforce program leader for The Conference Board.
Piktialis says nonprofits should consider developing flexible work options for mature workers and robust recruitment networks to find skilled boomers. "These challenges can be viewed as opportunities. Many boomers plan to work past retirement age, and many private sector workers are considering moving to nonprofits."
In addition, The Conference Board recommends that nonprofits:
* Collect data about how they operate, client needs and preferences, organizational strategy, critical jobs and future workforce needs.
* Analyze data about their current workforce - number of employees, turnover, age, skills and retirement eligibility - to project the future workforce two years out.
* Study the gap between projected supply and demand and develop a plan to close the gap through hiring, training and leadership development.
The Conference Board also stresses the importance of creating or streamlining strong human resource units. The typical problems affecting nonprofit senior managers - burnout, stress and lack of training - also are felt at staff levels. This could be due to a lack of professional HR/benefits functions at many nonprofits, the report states. It recommends investing in senior management development and exploring new talent pools, including aging baby boomers.
Retirement consultants consider this a wise strategy to deploy.
"There's obviously a large segment of the boomer population that's moving towards retirement age," remarks Bob McAree, retirement practice leader for Sibson Consulting, a division of The Segal Company.
"Many of these individuals are currently engaged in a career, and may determine that it would be appropriate for them to retire from that career and supplement their retirement income by continuing to work. The not-for-profit environment would be attractive to these boomers who want to attach themselves to a mission they believe in or have an affiliation with. Individuals are much more inclined to have a desire to work well into their sixties or even their seventies. This was not the case 20 or 30 years ago."
Piktialis agrees, "Baby boomers, compared with previous generations, are healthier, more educated and wealthier than any previous generation, and more inclined to stay in the workforce. Many current older employees plan to work past traditional retirement age, but not always with their current employers. This burgeoning trend provides a time-tested source of labor for nonprofits."
Benefits are proving to be a more significant factor for boomers as they approach retirement, notes McAree. "They're going to seek positions that offer flexible hours and a more attractive environment. Health insurance, retirement benefits, more significant 401(k) options and/or a defined benefit plan would prove extremely attractive."
The 'pull and the passion'
Baby boomers currently make up 28% of the population (77 million Americans born between 1946 and 1964). According to the Bureau of Labor Statistics, the labor force of workers age 55 and older is anticipated to increase by more than 11.3 million by 2014 - four times the growth rate of the overall labor force and the fastest growth among all age groups.
Mark Meltzer is one of those boomers who worked for the private sector and is now pursuing a more civic-minded profession.
Meltzer, 55, worked for The Segal Company for 30 years and retired this past February as senior vice president. He has long harbored an interest in social work, and he's on target to get his license in September. "I've been interested in social work for about 10 years now," says Meltzer, who resides on Long Island, New York.
Meltzer figures his background in consultation work has adequately prepared him for the social work field. "I had the pull and the passion to do something else, and I want to do this for as long as I can."
Individuals like Meltzer are the types The Conference Board and other boomer advocates believe could help the nonprofit sector.
"I think there are real opportunities for companies to use older workers, for their knowledge and their ability to relate to their customers," says Meltzer.
"They would show empathy and produce a greater deal of trust."
