Survey: Staff Management Strategies Vary in Tough Economy
Organizations across the nonprofit sector are using combinations of staff management strategies, including salary freezes and layoffs, to deal with the recession, according to a survey Campbell & Company conducted in early July.
Half of organizations reported that they are freezing salaries to contain human resources costs, and nearly half (47.4 percent) have instituted layoffs. Respondents were able to select all strategies that applied to their organizations, and many indicated that they are using more than one strategy to address budget issues. In addition to salary freezes and layoffs, organizations noted that they are:
- Instituting hiring freezes (15.8 percent).
- Imposing furloughs or reducing salaries, hours, raises or benefits, such as decreasing employer contributions to deferred compensation plans (10.5 percent each).
- Decreasing or eliminating bonuses (7.9 percent), although we note that many nonprofit organizations do not pay annual performance bonuses.
More than half of respondents (51.2 percent) reported that their operational budgets are lower this fiscal year, but interestingly, 24.4 percent have increased their budgets, with the remaining 24.4 percent maintaining the prior year’s budget levels.
Other findings from the survey include the following:
- Although half of organizations have instituted salary freezes, the other half are giving raises. 29.5 percent of respondents are awarding raises based on performance, and 20.5 percent are giving cost of living raises.
- When considering fundraising staff only, slightly fewer organizations (43.5 percent) have instituted salary freezes for these employees than reported freezes for other staff members.
- Similarly, fewer organizations (43.5 percent) reported layoffs among the fundraising ranks than across all staff, indicating that those with responsibility for revenue generation have been spared a bit more from staff cuts. Indeed, 13 percent of respondents have increased their fundraising staff this fiscal year, indicating the need to continue to diversify their revenue sources and increase private donations to the organization.
Respondents to Campbell & Company’s survey of nonprofits have not instituted salary cuts and freezes to quite the same degree as private-sector companies. A June survey of the private sector conducted by global outplacement consultant Challenger Gray found that 52.4 percent of companies were instituting salary cuts or freezes, up from 27.2 percent in January.
However, as noted, 47.4 percent of respondents have laid off employees—much higher than numbers reported in two February surveys of nonprofit organizations. The Chronicle of Higher Education reported that an Eduventures survey of higher education clients found that only 13 percent had laid off staff, and Marts and Lundy’s survey of a variety of nonprofit organizations found 20 percent had instituted layoffs. Campbell & Company’s more recent survey suggests that this measure is being used more frequently as the recession lingers.
Campbell & Company conducted the e-mail survey, which had a 21.8 percent response rate, to gauge how the economy is affecting staffing at nonprofit organizations. Organizations responding to the survey represent 10 subsectors, including arts and culture, higher education and healthcare and have budgets ranging from less than $500,000 to more than $500 million, with the majority (60 percent) between $1 million and $25 million.
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