Workforce strategy for not-for-profits

Posted on 13 Nov 2024

By Jess Murphy, Gowrie Victoria director and an experienced resources and workforce strategy executive

“Workforce strategy” is a catchphrase in human resources circles, but the concept can be intimidating for small- to mid-sized organisations, especially for not-for-profits with limited HR capacity.

Jess Murphy is an experienced workforce strategist

A workforce strategy is as simple or as complex as you want to make it. An organisation doesn’t have to be a minimum size to have one. The reason why you might want to have one is to help you prepare for the skills and capabilities you need now, and for the future.

It is this looking up and forward that makes workforce strategy so powerful.

We are all guilty sometimes of getting stuck in the mechanics of day-to-day operations. When a person leaves, we replace them; without a second thought we pick up the phone to a labour hire company when we have holes to fill; we run training programs to scratch an immediate itch; we give pay increases once a year.

There is nothing bad about any of these things – often they are done with good reason – but workforce strategy challenges us to ask: Does this action align with what we need for our future?

"Perfection is not the aim here; direction is. Moving your organisation in the right direction, even in small steps, is the most important thing."

What is workforce strategy?

Workforce strategy entails looking forward and making choices about the capabilities and skills your organisation is going to invest in. That inevitably requires prioritising certain capabilities and skills over others. Some areas will require investment. For your organisation, this might mean prioritising digital skills, human-centred design, or certain clinical skills. The key is to approach decisions about priorities with planning, deliberation and, sometimes, bravery.

A workforce strategy uses data to identify the skills and capabilities needed, and to determine how to close any gaps. Taking a data-driven approach doesn’t need to be intimidating. While big organisations employ workforce analytics teams, small not-for-profits have been known to develop a strategy with a single part-timer.

Making the best use of workforce strategy in the social sector

Skills shortages and digital disruption and transformation are hot topics in the NFP and social sectors, just as they are in other workforces.

The World Economic Forum’s Future of Jobs report, published every two years, predicts a significant mismatch between supply and demand in these areas – and not just the technical skills, but also the socio-emotional skills they require.

By 2027, about 60% of workers worldwide will need retraining or upskilling, as organisations race to keep up with automation and digital transformation.

In Australia’s not-for-profit sector, aged care, early education, disability and health are among the sub-sectors most affected by the disruption. The temporary employment arrangements that are common practice in the NFP sector will only exacerbate the problem.

Effective use of new technologies, including artificial intelligence, will require targeted buy-and-build approaches to prepare workers to adapt to new tools and digital processes.

Where should I start with my workforce strategy?

Step one: Don’t be daunted! A one-page workforce strategy can be just as effective as a 300-page behemoth produced by one of the Big Four (Deloitte, PwC, EY and KPMG).

Perfection is not the aim here; direction is. Moving your organisation in the right direction, even in small steps, is the most important thing. Similarly, you don’t need full-time workforce analysts to gain insights; use what you have from your human resources information system (HRIS) or payroll system. Surveys can also work well. For external supply and demand data, the ABS and Jobs and Skills Australia provide excellent resources.

It is also worth noting that there are many government departments working on skills strategies in key sectors. For example, the federal Department of Education has a team working on the long-term workforce changes needed in early education, or the national children’s education and care workforce strategy. Such reports and investigations can be a great resource.

Most workforce strategies will have the following steps.

Articulate the future you are planning for

This may come from a strategy day with the board or executive team, or from an existing strategy. It can also be informed by trends in your sector, acquisitions or mergers you are planning, or technology you know is coming.

Determine your workforce gaps

With your future in mind, do your best to extrapolate the capabilities and skills you are going to need. For example, there is no point moving to digital service provision unless you have the skills to build, run and operate this feature. Consider what your current workforce looks like, covering number, gender, role types, skills, remuneration, location, cost, and so on. After considering these factors, what are the key gaps you need to address?

Close the gaps

Next, prioritise what you need. This is likely to comprise a mixture of skills building, buying certain skills in, and retaining certain skills.

Gowrie Victoria DSC 8286 — Gowrie Victoria has a workplace strategy aimed at securing skilled workers. Picture: Gowrie Victoria

An early education provider’s strategy to maintain skills supply

As a director on the board of Gowrie Victoria, an early education not-for-profit, I’m familiar with some of the initiatives the organisation has used to secure a strong supply of skilled workers.

These have included:

running a registered training organisation (RTO) diploma program to supply graduates
having a clear “employee value proposition” in the market
partnering with research institutes to bring in leading-edge thinking
partnering with other early education providers to provide better remuneration and conditions
working closely with the Education Department to help shape strategy for the wider sector.

Measuring your success

Each organisation will have different measures of success. Whatever they are, it is crucial to have them. Some of the most common indicators include:

productivity (there are many simple ways you can measure this)
closing diversity, equity and inclusion (DEI) gaps
workforce engagement and turnover
the number of people trained in key skills
increased funding attributed to the skills within the organisation
percentage of tasks automated
time taken to fill key roles or to staff new projects.

Some of the challenges

Funding cycles can be the enemy of workforce strategy. When organisations are stuck in the loop of short-term contracts and placements, it can feel impossible to escape. This problem is unlikely to disappear entirely, and it is crucial to engage the board using data. At its heart, workforce strategy is about risk mitigation – a topic boards respond to well. With the right information and planning, the board may be willing to take a calculated risk by hiring people with certain capabilities permanently, or by investing in skills development programs.

For example, the Gowrie Victoria board approved significant investment in specialist pedagogy roles to support a commitment to quality, and to build future capacity in its teams. Although these roles were over and above what is typically required in an early education setting, the board recognised their value in advancing its mission. Thinking more widely than your own organisation can help. Is there a coalition, roundtable or working group that could pool resources with your organisation’s contributions?

Leadership buy-in, particularly from middle management, can be a significant barrier to a strategic approach, and it can be difficult to shift operational leaders from crisis mode into a strategic mindset. However, carving out time in board and leadership meetings to discuss workforce strategy is essential. Using good supply and demand data can demonstrate why focusing on critical capabilities will set your organisation up for a less-reactive future where they feel more confident delivering services, helping it to break out of that “financial survival cycle”.

While doing things differently can result in short-term discomfort, I strongly believe the payoff is worth it. Workforce strategy should be an essential part of organisational strategy, especially for not-for-profit organisations heavily reliant on workforce skills and capabilities to survive.

Jess Murphy is a non-executive director of Gowrie Victoria, an early education NFP. She is also an executive leader in human resources and workforce strategy for organisations including Bupa, IAG, IKEA and Adecco.