Since the pandemic's onset, the nonprofit sector has faced a significant struggle with the inability to find, recruit, hire, and retain talent. The problem isn't isolated to the nonprofit sector but has felt the most significant impact. The problem facing nonprofits, though, unlike for-profit or government sector industries, is when nonprofits that focus on human services (medical and mental health, shelter, food, etc.) experience labor shortages, the nonprofit frequently must reduce services to their communities. Worse, some organizations find that they must cease operation altogether - thereby starving their communities of desperately needed services. 

This is NOT a temporary problem. 

Our labor shortage may feel that it came as a result of the pandemic, but it didn't really. That is not to ignore the statistics showing an astonishing 97 million workers left their jobs in 2021 and 2022. No, the problem has been brewing for years - the primary culprit for the current and future labor shortage is the aging baby boomer generation. The math is simple: More workers are exiting the labor force than new entries into it. The result? The U.S. Department of Labor says we should anticipate a continually shrinking labor force into 2030! Ugh.

Remember the laws of Supply and Demand? 

When labor is in short supply, the cost of that labor increases. This law is especially troublesome for nonprofit organizations that operate on tight annual budgets. The U.S. Department of Labor says the long-term trend for labor is to tighten further; therefore, nonprofits need to plan for labor costs to continue to rise. 

Nonprofits have a solution

The solution that can help most nonprofit organizations deal with the labor shortage is incorporating a robust skilled volunteer management program as part of their human resource strategy. A robust, skilled volunteer management program replaces the traditional use of temporary volunteers. Effective implementation will ensure the program has its place in the organization's annual budget and its annual report.

An effective program will have the following components:

1. Support the organization's leaders and board in providing sufficient program funding for a full-time volunteer director or manager, support staff, and resources such as office space.
2. A full-time volunteer director or manager is granted decision-making authority. 
3. The program must be committed to making data-informed decisions by continually tracking and evaluating volunteer activities.
4. Effective use of stipends can attract a more diverse pool of skilled volunteers, increase retention, attract those with advanced skills, and increase volunteer satisfaction.
5. Partner with other organizations that can assist with implementing a volunteer management program, such as Service Enterprise Initiative.

Baby boomer's contribution to the fix

Nonprofits are the forever optimists. When challenges arise, the sector combines its brainpower and finds a creative solution. The labor shortage problem will be another example of nonprofit organizations overcoming diversity. The elements that were fundamental in creating the labor shortage problem are also fundamental to solving it. 

The baby boomer generation exiting the labor force and being the primary contributor to the labor shortage will also contribute to its solution, by providing the skilled volunteer labor needed by nonprofits. Retirees who have become disenchanted with retirement or need to supplement retirement income are in ample supply, and can be attracted by nonprofits by offering stipends for volunteer time. Nonprofit organizations can effectively balance labor needs and financial budgets by implementing a robust volunteer management program headed by a supported volunteer director or manager and tapping into this critical supply of skilled workers.

Paul Edmeier is a 2023 graduate of the Masters of Nonprofit Leadership and Management program at Arizona State University. He also holds a Master of Business Administration from National University and a bachelor’s degree in finance from Loras College in Dubuque, Iowa. Paul is the Chief Financial Officer for Mi Familia Vota, a national nonprofit headquartered in Phoenix whose mission is to promote social and economic justice in Latino communities. Paul also serves as Chief Financial Officer for Phoenix Children’s Chorus, a nonprofit celebrating its 40th year of operation, fostering excellence in youth through choral education and performance.

Image: Cogenerational Service Academy volunteering with a local nonprofit

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