Trending Now: Exploring Canada's nonprofit workforce development challenges

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Editor's Note: Looking for current information on compensation in the Canadian nonprofit sector? Check out the 2013 Canadian Nonprofit Sector Salary & Benefits Study.

Canadian nonprofit sector employment is in a bind, and everyone knows it.

Statistics and research shows that, as in many other sector workforces, employees are aging while subsequently hanging on to their jobs longer – especially in this economic climate – which is prohibiting potential younger replacements from entering into the nonprofit workforce stream; at least not in any permanent, full-time sense. Sector experts worry that the long-term result will be a lack of experienced leaders to replenish those that eventually do retire or move out of leadership positions.

Adding to the trepidation is the fact that historically, nonprofit sector salaries are nowhere near as lucrative as comparable remuneration in the for-profit world.

None of this is earth-shattering news to those familiar with sector workforce trends. But what is heartening is that many changes are afoot that could generate a boon for employment, capacity growth and sustainability.

Hail to the chief

One of the new wrinkles added to the sector recently is the appointment of the Canadian nonprofit world’s first-ever Chief Economist. Appointed in February as part of a plan spearheaded by Imagine Canada, Brian Emmett, a former federal public servant and economics graduate of the University of Western Ontario and the University of Essex in England, is tasked with “measuring the impact of the sector and bringing economic issues facing charities and nonprofits to the forefront of public policy decision makers,” according to Imagine.

It’s an important development as it puts a face to the sector’s long-ignored economic side, and the significant numbers driving it. For example, the more than 165,000 nonprofits and charities operating in Canada contribute 7.8% of GDP and 10.5% of the labour force, which Imagine rightly points out are statistics that remain “under-represented in the public policy arena.”

So how does this impact workforce development and trends in the nonprofit sector?

Ken Wyman, fundraising expert and professor at Humber College’s Fundraising Management Program in Toronto, hailed Emmett’s appointment as a harbinger of change in the sector.

“Predicting workforce trends in the nonprofit sector is important for those of us training the next generation,” he told CharityVillage. “We know that there is a pressing demand for more trained fundraising staff. We know this because of the many requests for interns, and how quickly grads get hired. More data would help fine-tune the educational offerings to meet the needs of the students and their future employers. Perhaps the new Chief Economist will help.”

Wyman noted that the nonprofit sector not only has a huge impact on Canada’s economy but it also impacts overseas economies through the nation’s international development charities it also affects the economies of many other organizations abroad.

Emmett’s presence could also lead to better planning, he said, with nonprofits included at the table more often. “For example, the government of the day is focused on job training. Much of that training is delivered through the nonprofit sector. People are concerned about health care: almost all of that depends on nonprofits, from research, prevention, emergencies, rehabilitation, long-term care, etc.,” he said.

“Major corporations such as banks hire economists. So do unions and business associations, not to mention governments. It is high time the nonprofit sector had our own perspective on this,” Wyman noted. “Most of that focuses on macro-economic patterns. Increasingly, economists...also look into consumer behaviour. Perhaps the new Chief Economist can help the sector also understand more about how to get more people to donate more money more often, and volunteer time and expertise more often.”

It could all add up to more employment opportunities and funding stability in the sector.

But for the moment, here’s what is known.

Going to the nonprofit (labour) market

In January, before going on a (permanent?) hiatus due to the termination of its main funding source - the Government of Canada’s now-defunct Sector Council Program - the HR Council released a report titled How much do small charities pay in different Canadian cities? as part of its Labour Market Information series.

Based on information gathered about small charities from their 2010 T-3010 filings and since analyzed by the council, the report, as the title suggests, looked at nonprofit pay scales in different regions across the country.

What it uncovered was, again, unsurprising to those in the know about sector compensation, but gloomy nonetheless.

Some quick executive summary stats include the following numbers (salaries and benefits combined):

  • $40, 956 is the average salary of a full-time employee
  • Only 3.5% of full-time employees earn more than $80,000
  • 64% of full time employees at small charities earn less than $40,000 annually

Region affects compensation levels as well. “Quebec’s small charities have the lowest average compensation costs per full-time employee ($33,207), followed by Atlantic Canada ($35,335). The Territories have the highest average total compensation costs ($48,610), followed by Alberta ($45,722),” according to the report.

The fact that nearly two thirds of the nonprofits in the country fall into the “small charities” category makes looking at retention rates that much more important to that vital underpinning of the total sector’s workforce.

It’s something both the Ontario Nonprofit Network (ONN) and Nova Scotia’s new Community Sector Council (CSCNS) have realized and are working hard to address.

ONN-ward and upward

In 2012, the ONN published a discussion paper titled A Human Capital Renewal Strategy for Ontario’s Nonprofit Sector. In it, the network outlined some of the travails of its province’s sector when it comes to the workforce.

As the province with the most nonprofits (40,000+) that employ upwards of 600,000 Ontarians, the ONN and the provincial government are keenly aware that addressing workforce problems is a pressing matter. But, as mentioned above, the numbers and data about how important the sector is to the economy are not as accessible as they should be, according to the network.

This section from the ONN paper highlights the issues involved:

“In general terms, one of the most pressing labour market issues identified is the lack of an intergenerational conversation or ‘succession planning.’ The HR Council’s recent report, Driving Change: A National Study of Canadian Nonprofit Executive Leaders speaks to this. It finds that over half of executive directors plan to leave their current positions within four years – and yet most board members say that that their nonprofit does not have a succession plan in place.

“A second, and closely related issue is the evident skills mismatch that fosters uneven employment results in the sector’s labour market. Organizations struggle to find qualified employees even as high numbers of unemployed and underemployed individuals seek work in the nonprofit sector.”

The paper goes on to stress, yet again, that data “to inform a human capital renewal strategy for the nonprofit sector is not readily accessible, and in many cases, not collected at all.” As such, the ONN is advocating for “sustained, evidence-based, systematic human resource planning even at the subsectoral level.”

It is now in the first part of a three-year plan to study and collect data on the sector with the goal of informing and providing “evidence for detailed human resource planning in the sector and the development and implementation of a human capital renewal strategy” by 2015.

Meanwhile, the CSCNS formed earlier this year with similar goals towards sustainability and HR-related issues and a fact-finding mandate. Readers can find more on that story here.

Burrowing down for facts

In Toronto, Malcolm Burrows, head of Scotia Bank’s Philanthropic Advisory Services Private Client Group, and a sector expert, tells CharityVillage that he’s observed a long-term trend towards “project-based funding.”

Whether it’s government or private donors narrowing their funding towards nonprofits for specific projects, the overall effect has created a cycle of inefficiency in hiring and employment opportunities.

Burrows said that in today’s climate, grant support that is tied solely to a project undercuts the sector’s ability to address core issues like employment.

“I think that is a long-term trend and has a significant effect on career options. If younger professionals who want to come into the sector only see dead-end contracts, it doesn’t give much hope for the future, if you want a career,” he said.

Burrows also commented on Imagine’s chief economist, saying he agreed with the organization’s hypothesis that the sector needs more data and “be able to tell our [economic] story better out there. A lot of the narrative from government and donors is this sort-of 1953 conception of charity as being entirely volunteer-driven and no cost. And we need better data to show the economic benefits and to show the damage of certain economic funding models; to track the importance of developing senior leadership within the sector.”

May the (work)Force be with you

Do you think the sector is now on the right track to shoring up its workforce? How would you fix the workforce dilemma? Do you have an idea that you think could help break the cycle of poor workforce retention in the charity sector?

Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com.

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