Article: ‘Talent tsunami’ from downturn floods sector
Interesting article from the Financial Times. Discusses how the wave of business professionals trying to get into the nonprofit sector has not made talent management easier for organizations.
Credit crunch: ‘Talent tsunami’ from downturn floods sector
By Sarah Murray
Published: May 27 2009 18:01
When hiring talent from the corporate sector, global public sector institutions and non-governmental organisations (NGOs) have often struggled, particularly when trying to match private sector salaries.
Recently, non-profit wages have risen and the sector has benefited from a growing desire by businesspeople to join non-profit organisations. Now, however, job losses in the corporate sector mean NGOs and multilateral agencies have a different problem – how to sift through the deluge of job applications from recently laid-off executives.
Certainly, the sector has a large appetite for new recruits. In a recent survey of US non-profit executives by the Bridgespan Group, the non-profit spin-off from consultants Bain & Co, organisations predicted that in 2009 they would need to fill 24,000 vacant or new roles, particularly in functional areas such as finance and fundraising.
Growing numbers of those senior positions are being filled by individuals from the private sector – a trend that began even before the advent of the credit crunch.
As the activities of the private sector and that of the development community have continued to overlap, more executives have recognised that making money and making a difference are no longer irreconcilable goals.
The Bridgespan survey found that, of those hired between June 2007 and December 2008 21 per cent were what it calls “bridgers” from the corporate world.
“That’s at least twice what I would have predicted,” says David Simms, managing partner of Bridgestar, the executive search arm of Bridgespan.
The trend is particularly noticeable at some of the more entrepreneurial non-profits, NGOs and multilateral institutions. At Acumen Fund, a non-profit venture fund that uses entrepreneurial approaches to tackle global poverty, executives refer to a “talent tsunami”.
The organisation – which often looks to fill short-term postings and fellowships in countries such as India, Kenya and Pakistan with the social businesses it invests in – had some 700 applications for its summer internship programme, far higher than in any previous years.
“We’re definitely seeing more candidate flow and interest,” says Harry Dellane, director of talent at the Acumen Fund.
Dorothy Berry, head of human resources at the International Finance Corporation, part of the World Bank Group, confirms the trend. “The good news is there are some highly-skilled people, who weren’t available six months ago, that are now available,” she says.
However, the wave of skilled executives flooding into the job market does not necessarily make talent management easier for non-profits and multilateral agencies.
In spite of the volume of corporate lay-offs, the Bridgespan survey found 60 per cent of respondents believed they would face a shortage of qualified candidates.
As well as the question of salaries, the need for executives with specialised skills was seen as a barrier to recruitment, as was hiring individuals who could fit into a non-profit culture.
“The challenge is to find someone with the right functional skills to lead an organisation and the right cultural skills to make sure mission leads and money follows,” says Mr Simms. “You need technology people and financial people but cultural skills are what it takes to seal the deal.”
At the same time, organisations also need to be sure that the enthusiastic “bridger” candidates now knocking at their doors are not simply looking for a port in a storm and will not, once prospects in the private sector pick up again, head back there.
“The challenge is to hire the right people,” says Ms Berry. “So we are still being very careful to make sure the people we hire want to be part of a social enterprise – and not just until something better comes along.”
Even for Acumen Fund, which is not necessarily looking for long-term hires, the difficulty of sifting through a deluge of applications remains tricky.
“It’s an opportunity and a problem for us,” says Mr Dellane. “The opportunity being that there are these great resources that are potentially available to us – but the problem being how do we do gate-keeping.”
For non-profit organisations, that gate-keeping is critical. For while the non-profit sector has come to appreciate what businesspeople bring with them – in the Bridgespan survey 73 per cent of respondents said they valued private-sector skills – organisations also have to be sure that the person they are hiring can adapt those skills to a specialised environment.
That often means working in a resource-constrained environment, and one where action follows decision-making more slowly than it might in a corporate setting.
Moreover, multilateral institutions and NGOs have a huge range of stakeholders to answer to, from national governments to poor farmers.
So while the fresh supply of skilled business executives on the jobs market benefits the sector, the difficulty for organisations trying to hire new leaders is not only about offering an appropriate salary.
“Talent is going to be the biggest issue for organisations after we get through this economic calamity,” says Mr Simms.
“And talent is the issue that will determine long-term performance – not money.”