Nonprofits launching new incentives to draw hires amid workforce shortage

Minnesota nonprofits are turning to new ways to tackle unprecedented staffing shortages, raising employee pay and offering sign-on bonuses and other new incentives to bolster workforces.

Guild, an east metro-based mental health provider, this month raised wages for 70% of its workers, increasing minimum wages from $17 to $20 an hour. In Minneapolis, Simpson Housing Services is giving employees free state park passes or a wellness stipend, in addition to other benefits.

And in Minnetonka, disability services provider Opportunity Partners is boosting benefits — ranging from sign-on bonuses to tuition reimbursement and some pet-friendly worksites — and spreading the word through billboards, career fairs and outreach to college students as it seeks to rebuild staffing levels, down about 30% from pre-pandemic levels.

"We're not hiring fast enough," said Bill Schultz, CEO of Opportunity Partner. "We're working really hard to be creative ... to find the right people who this is a good fit for."

Nonprofit staffing shortages worsened during the COVID-19 pandemic, when furloughs and layoffs affected about a third of the sector early on. Employees continue to leave for jobs that offer better pay and benefits in what's been dubbed the "Great Resignation."

The result: while Minnesota's nonprofit sector still makes up about 14% of the state's workforce, the number of workers has shrunk by nearly 30,000 since before the pandemic.

In a report released by the Minnesota Council of Nonprofits, more than half the nonprofits surveyed said they're facing staffing shortages and turnover; at the same time, most are reporting higher demand for services. Burnout and wages were the top reasons the nonprofits cited for struggling to retain and attract employees.

While nonprofits have long found it hard to match the pay and benefits of for-profit or government jobs, they face a harder time competing for workers now in the hot labor market. Staffing shortages are squeezing businesses from airports and hotels to restaurants.

But for nonprofits providing 24/7 care to people with disabilities, mental health issues or those experiencing homelessness, the needs can be especially urgent.

"I see a Caribou is closed and people have to go through a drive-thru and they're frustrated. But there's 170-plus group homes in the state of Minnesota that have closed since the beginning of the year ... It's not an inconvenience, it's life-altering for them," Schultz said.

The state nonprofits council has nearly 1,600 postings on its job board, almost double those at the start of 2021 and more than before the COVID outbreak. Nonoko Sato, the council's executive director, said foundations and donors need to provide more support to nonprofits engaged in hiring and retaining staff.

In fact, foundations and donors gave record amounts of money in 2020 but some of that generosity has waned, along with emergency government grants or forgivable loans. At the same time, nonprofits' costs are rising due to both inflation and investments in better pay and benefits.

"The demands continue to rise and their funding sources just remain stagnant," Sato said.

At Opportunity Partners, the lowest starting pay is $14 an hour. Schultz said the organization can't afford higher pay with a budget largely reliant on Medicare and Medicaid reimbursement rates that are set by the state and federal government.

Disability providers lobbied the Legislature this year to use some of the state's $9 billion surplus to address staffing shortages, including through retention bonuses and raising reimbursement rates. But none of the proposals passed.

"We can't compete on an hourly rate with Target, or even Chipotle or Amazon," Schultz said. "We're always going to lose that battle because we don't have the ability to raise what we're charging or what we're reimbursed."

So Opportunity Partners is looking for new ways to increase revenue and fundraise, as well as cutting costs by consolidating programs and reducing the number of buildings it leases. The Minnetonka nonprofit has 350 employees, down from about 500 in 2019. As a result, it's serving fewer people and has more than 550 on a waitlist to receive services.

To attract job candidates, Opportunity Partners has offered $2,000 sign-on bonuses, held career open houses and posted ads on Minnesota State Fair buses for the first time. The new efforts have seen an uptick in job applications.

"We believe these things have worked, but they haven't solved the problem," said Lori Schluttenhofer, Opportunity Partners' vice president of day and employment services.

Guild has expanded its fundraising team to look for new grants and revenue, hoping to offset the $350,000 cost of raising wages this month. Heather Besonen, a Guild vice president, said they're recruiting at colleges and on social media, and offering hiring bonuses and leadership training opportunities.

Simpson Housing Services is doing more one-on-one recruiting, meeting with possible job applicants over coffee. The nonprofit is touting remote work options and offering employees and new hires a free annual state park pass or wellness stipend.

It's one way to help promote a good work-life balance, said Christina Jacobson, director of equity and human resources at Simpson.

"The work our staff does on a daily basis is mentally taxing," she said. "We want to create programs or offer benefits that will support in relieving that stress."

The efforts to attract and retain staffers are paying off, she said. But, she added: "It is still a struggle, it's a grind."