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Australian NFPs - Under Pressure!

24 October 2012 at 1:36 pm
Staff Reporter
Australia’s Not for Profits are dogged by pessimism and a lack of confidence in meeting demands and are losing the war on attracting ‘talented’ people to their ranks, according to major new research.

Staff Reporter | 24 October 2012 at 1:36 pm


Australian NFPs - Under Pressure!
24 October 2012 at 1:36 pm

Australia’s Not for Profits are dogged by pessimism and a lack of confidence in meeting demands and are losing the war on attracting ‘talented’ people to their ranks, according to major new research.

Some 80% of Australia’s Not for Profit organisations do not feel confident they will be able to meet demand for their services in the next six months, according to a new report released by PwC and the Centre for Social Impact (CSI).

The PwC-CSI Community Index is a biannual measurement of confidence in the Australian Not for Profit sector, across 10 industries like Housing and Development, Health and Social Services.

The inaugural report shows Not for Profits are somewhat pessimistic, with an overall score of minus-5. The research assesses confidence over four components to determine an aggregate confidence score. The four components are demand, people, funding and relationships.

Releasing the report, PwC Corporate Responsibility Partner Mark Reading said: “The sector employs more than eight per cent of the workforce – more than the resources sector – and adds more than $55 billion to the economy.”

“Looking ahead, the sector is generally pessimistic in its outlook over the next six months. The main contributing factors to this negative outlook are expectations of greater demand for services and uncertainties about being able to meet this demand, and finding and retaining quality employees,” Reading said.

According to the report, expectations for high levels of demand and low confidence in ability to meet that demand are the major causes of low confidence for Australian Not for Profits, with the sector having a Demand Index score of -13.

The report says worryingly, the Social Services and Development and Housing industries are significantly concerned at their ability to meet demand for their services, with Demand Index scores of -37 and -36 respectively.

“These results demonstrate that in difficult economic conditions more Australians require support for accommodation and social service support,” Reading said.

People issues are the second most influential driver of low confidence across the sector, returning a People Index score of -8. Australian Not for Profit organisations are losing the war for talent due to constraints in offering attractive wages and career paths.

Religious organisations have the lowest level of confidence within the sector with a People Index score of -22, followed closely by the Health industry with a People Index score of -18. Both industries are experiencing difficulties in attracting and retaining employees with the expectation that this challenge will increase over the next six months.

“The PwC-CSI Community Index shows that many of our largest Not for Profit essential service providers are most concerned at being able to meet escalating demand for their services. These organisations shoulder the lion’s share of service provision and are struggling to keep up,” Reading said.

Large Not for Profit organisations are the least confident in the sector, with an overall confidence score 0f -11. This is driven by a strong negative outlook from these organisations in terms of demand (-24) and people (-15).

“In a country as wealthy as Australia, it is deeply troubling that demand for services from the Not for Profit sector continues to outstrip our ability to provide them,” World Vision Australia chief executive Tim Costello said.

“But despite the pessimism, overall I think the Not for Profit sector remains resilient; it is a sector of Australia’s economy that continues to provide exceptional value for money to the community,” Costello said.

"The Community Index Report is a great initiative that highlights the work and the challenges facing Not for Profit organisations. It is a sector that provides exceptional value for money to the community; this report highlights that contribution."

Centre for Social Impact chief executive Officer Dr Andrew Young said: “Given the sector’s size and significance in Australia, it’s important that Not for Profit leaders and policy makers have access to regular and robust information about sector confidence and operating conditions. The PwC-CSI Community Index provides an important national outlook filling a significant gap in available data.”

“Two critical things that the Not for Profit sector needs to deliver impact are great people in leadership and management, and effective collaboration with other organisations and sectors. On those two points respectively, this study has some bad news and some good news.

“The PwC-CSI Community Index shows that the sector is confident about its relationships with others in the sector and with business and government; however, even in these difficult financial times, the most significant barrier to success is attracting and sustaining people,” Dr Young said.

“Unless we can better address the talent issue, we will likely see a further decline in confidence.”

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  • Anonymous says:

    Three tip for the NFP sector:
    1. Strip back the lofty layers of management (the sayers)
    2. Pay decent wages to the rank and file (the doers), and
    3. Offer a proper merit-based career pathway
    Then you might attract and retain the talent you’re looking for!

  • Anonymous says:

    I thought that if there was an equitable salary range in NFPs, instead of distributing 80% of the total salary to the CEO and other ‘privileged’ one, may be there would be talents coming back. As talents in NFP as sometimes paid at $18 per hour! with no benefits unlike those at the top!
    Personally, as a result, I provide pro-bono services, free, rather than being exploited!

    This is my view, this is what I have observed, this is the reality

    • ABCPS says:

      Its a bit like parliamentarians is'nt it? Although with their super these days they really do have their snouts in the feedbag

      But for CEO's – to get good ones, you need to pay them more.

      If a good CEO can increase the returns substantially for a NFP, then if he wasn't there, then there probably is some justification in that CEO earning a higher income

  • Anonymous says:

    Maybe NFPs should drop their position description emphasis on tertiary qualifications and at least consider those who have proven, extensive, relevant work experience and obvious talent – even if they don’t have a degree. If applicants don’t even make the shortlist for jobs, for lack of a tertiary qualifcaiton, even though they have clearly demonstrated experience and are obviously working with great success at a high level, it’s little wonder NFPs are finding it hard to find and retain talented employees.

    Having a tertiary qualification does not automatically make someone an experienced or even good employee so why do all NFP jobs require a tertiary qualification? No wonder NFPs are missing out on a big portion of the talented workforce! A tertiary qual is necessary if the position is for clinical supervision, training other staff, or perhaps direct service client intake/case management. But is it really necessary for every other NFP job?

    Many of the NFPs’ advertised jobs, especially project management, call for a broad range of experience in a range of sectors such as social work, community engagement, health, grant-writing etc. But if you have a degree in at least one related area you can make the shortlist! If you have experience across all – and no degree (as per the key selection criteria) – you don’t make the cut and nobody even reads your application!!

    Clearly, broad experience is better for some positions than someone who has only ever specialised in one field.

    NFPs – if you are serious about tapping into a broader pool of employee talent you might want to consider your job applicant credentials a bit more closely and least consider non-degree qualified staff who are obviously well-experienced, passionate and doing similar work to the position you’re seeking to fill.

  • John Godfrey says:

    There are some positives highlighted in the overview section of the report notwithstanding the challenges ahead. Smaller organisations are more positive in their outlooks than large organisations. Compare that with the for profit sector and I think it becomes a very interesting fact worthy of more research. Secondly, there appear to be positive responses toward philanthropy, bequests and private giving – especially from smaller Nonprofits. Thirdly the sector appears to be positive about its relationships with others, including donors.

    Offsetting that are the concerns about employee attraction and retention and the impending changes in government regulation. Glass half full or half empty?

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