‘Enlightened’ HR offsets low pay, job insecurity at non-profits

Building on people management skills can compensate constraints

Despite the industry’s low pay and the lack of job protection, workers in the non-profit sector benefit from a number of progressive human resource strategies, a new report states.

“Clearly, funding constraints mean that non-profit organizations are not going to be able to compete on a salary basis. They’re not going to be able to offer permanent jobs,” said Kathryn McMullen, senior researcher at the Canadian Policy Research Networks, which sponsored the study.

However, she added, “building more on people management skills can somewhat compensate for those constraints.” Thus, organizations in this sector tend to use “enlightened management” strategies, she said.

These would include such practices as increased involvement in decision-making, reduced workplace hierarchy, a greater allowance for flexible hours and independent work.

McMullen, one of the co-authors of the study, Coping with change: Human resource management in Canada’s non-profit sector, said despite an increasing reliance on the non-profit sector in recent years due to government off-loading of services, there has been little hard data on the men and women who work in the sector.

“Within the non-profit sector itself, there’s a huge demand for information. Many of the organizations in this sector are quite small, and it’s helpful for them to learn more about themselves and each other, the common challenges that they face, and the responses and solutions that they’ve come up to deal with the challenges,” said McMullen.

There’s an expectation that the people who work in this sector should be doing it for free. “That goes back to the historical antecedents of the non-profit sector, in the sense that it was founded on volunteer and charity work,” said McMullen

“But there’s a large number of paid employees in this sector. Certainly people who work in this sector have a sense of mission and a desire to work at these organizations, but these are real paying jobs. So issues around job quality, job security, pay and career advancement are just as important for people in this sector as for those who work in the for-profit sector.”

The authors also examined the business strategies adopted by non-profit and for-profit organizations alike. “In many respects, (non-profit organizations) are similar to organizations in the for-profit sector. They clearly operate on a business model, and here I’m thinking of the strategies they use to adapt to external pressures. Things like improving employee skills, or improving product and service quality, or increasing employee involvement and participation.”

But whereas for-profit enterprises are more likely to consider such business strategies as reducing labour costs and relying more on part-time and contract workers, such strategies have less application for non-profit organizations.

“Many organizations are already bare-bone operations. It would be very hard to reduce labour costs further, so there’s not a lot of scope there for downsizing,” said McMullen.

Susan Pigott, CEO of St. Christopher House in Toronto, a community service agency, said the most pressing human resource issues in this sector continue to be the low pay and low job security, lack of resources and overwork.

“On the bright side, there are still a lot of people who choose to work in the not-for-profit sector because they’re mission-driven individuals. And for them, work in this sector is as much a vocation as a form of employment,” said Pigott.

“So you have highly motivated staff who tend to be good co-workers. It’s easier to create a sense of camaraderie and team spirit, because you have a group of people who are like-minded and passionate about the mission of the organization.”

Lynne Toupin, director of Developing Human Resources in the Voluntary Sector (HRVS), said she sees good news in the report, referring to the more inclusive management style, the flex hours, and the level of autonomy common in the sector.

HRVS is a clearinghouse of HR, organizational and management information and practical tools for non-profit organizations. While there seems to be an increase in management consultants serving this sector, most organizations simply can’t afford anything other than a do-it-yourself approach to HR. However, she added, there’s room for non-profit organizations to be innovative in their efforts to improve HR practices.

For example, career development tends to be lacking because of the scarcity of permanent or long-term positions. But if organizations work together to offer workers different kinds of opportunities with a number of employers, that would be “a collective approach to building people’s careers,” said Toupin.

Another example is Edmonton’s Muttart Foundation, which provides access to an HR specialist for a cluster of organizations. “It’s really quite fascinating to see the impact on an organization when it has somebody come in who understands HR practices and who has had a long experience.”

Halifax United Way is another example where executive directors of different organizations work together to share best practices and solutions to common HR problems.

“People are starting to see themselves as part of a larger sector. Their skills and their knowledge and the work that they do are starting to be valued,” said Toupin. “And quite frankly, without the 900,000 paid employees that work in this sector, we wouldn’t be able to leverage the support of the six million volunteers who are part of these organizations.”

Highly educated staff

Using Statistics Canada’s 1999 Workplace and Employee Survey, report authors Kathryn McMullen and Richard Brisbois determined that paid workers within the non-profit sector make up 8.1 per cent of Canada’s workforce, a figure that approximates the share of oil, gas, mining and construction jobs combined.

The authors count organizations such as non-profit cultural and recreational associations, such as sport clubs, campus radio and museums, as well as non-profit health, education and social service organizations, such as community clinics, residential care facilities and literacy groups.

The study does not include quasi-autonomous non-governmental organizations such as hospitals, schools and universities, nor power plants, harbour authorities and bus lines, even though these may be not-for-profit institutions. Workers in this latter sector represent 12.4 of the country’s labour force, while for-profit sector workers make up the remaining 79.5 per cent.

Over half of all non-profit establishments had fewer than five paid employees in 1999; three out of four employed fewer than 10 workers. Most of the workers in this sector are women, and are university-educated.

Despite their skill levels, however, workers in this sector are also more likely to be holding down part-time or temporary jobs than employees in other sectors. Their salaries tend to be low, and job insecurity is almost a given.

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