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16. November 2023
NGOs across the globe are struggling to attract and retain talent, Personio Foundation research finds
Non-governmental organisations (NGOs) make an indispensable contribution to our society with their social and environmental work. However, HR challenges often severely impact their important work. This is shown by a new study launched at an event in London by the Personio Foundation in collaboration with the consulting firm Impact46.
For the first time, over 1,100 NGOs from 115 countries worldwide were surveyed about the HR processes in their organisation. The study reveals that the biggest HR challenges lie in recruiting and retaining talent, often difficult working conditions, tracking and fostering employee performance, a lack of HR tools and resources, and compliance with complex legal frameworks.
The recruitment and retention of employees is a key challenge
Many NGOs face strong competition for financial support through donations and grants. In addition to making it more challenging for NGOs to implement organisational, process and tool optimisations, a lack of funding can also impact an NGOs ability to attract and retain talent: 52% of all NGOs surveyed state that attracting skilled staff is a major problem. 72% report that their salaries are not competitive compared to the private sector.
In addition, non-monetary benefits in the non-profit sector are not as common as perks in the private sector: a shortage of promotion and development opportunities, lack of recognition as well as tough working conditions — often the result of working in crisis regions or in psychologically stressful situations — means that staff turnover in NGOs (15-25%) is higher than in the private sector (10%).
A lack of HR teams and digital tools are an obstacle
Employee management is complex and time-consuming in any type of organisation — especially in NGOs, which often have a very diverse and geographically dispersed workforce. According to the survey, half of the NGOs surveyed (50%) have fewer than ten employees. In the case of smaller NGOs in particular, however, HR tasks often fall to the CEOs themselves, who therefore have to take on HR management in addition to other key tasks such as fundraising and project management. On average, around 50% of non-profit organisations do not employ a professional full-time employee responsible for people management. As a result, even simple HR processes, such as regular employee feedback or the introduction of a consistent organisational structure, are often either not carried out at all or done insufficiently.
Almost 40% also cite the lack of HR management tools as one of the biggest challenges — with tangible consequences: A lack of data for performance reviews or tracking project status means that standardized evaluation criteria for employee performance cannot be introduced and it is difficult to demonstrate success and the existence of professional and data-driven structures - particularly to funders.
Strategic (monetary and non monetary) investments are necessary
According to nonprofit leaders and practitioners, the untapped potential of people management is immense and currently neglected. However, even though NGOs currently have to overcome some challenges in HR, there are solutions that make it easier to overcome these hurdles.
"In principle, there are already digital HR tools that can effectively support NGOs. However, their use is still very low, especially among NGOs," comments Philipp Richter, Managing Director of the Personio Foundation. "This is precisely where we believe donors and foundations have a responsibility to pass on their expertise. In addition to traditional project funding, the focus should be more on strategic investments — for example in personnel management and organisational processes. This is the only way for NGOs to create a sustainable organisation that provides the best possible support for their mission and the employees who implement it."
Nicola Croasta, CEO of Impact46 says: "Donors and foundations need to go beyond traditional project funding and instead provide multi-year, unrestricted grants. This will support long-term investments that address the structural weaknesses of NGOs."
It is becoming increasingly important for NGOs to invest in their employees and take a broader view of compensation. In addition to the regular salary, employee satisfaction can also be increased through non-monetary levers — for example by creating a pleasant environment, flexible working hours, training and development opportunities, the establishment of support contact points or improved organisational and process structures.
You can read the entire study here.
About the Personio Foundation
The Personio Foundation was set up in 2021 by Personio, Europe's leading HR software company for small and medium-sized companies. Personio committed to donating one per cent of its equity to charitable causes in the form of the Personio Foundation. This share is currently worth 85 million US dollars.
Since its establishment, the Personio Foundation has supported NGOs with the Impact Portfolio. The funding is not tied to a specific purpose and is designed to run for several years. The HR Accelerator enables non-profit organisations to deepen their HR knowledge and build better HR management processes. These help with employee recruitment and retention as well as the development of efficient and scalable processes.
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