Not-for-Profit Finance recruitment - 2023 review & 2024 outlook

The news agenda this year has been dominated by the cost-of-living crisis, inflation and soaring energy bills.

But how has this affected the finances of non-profit organisations? And, what has it meant for recruitment in their finance departments?

Manager Catherine Hegarty takes a look at what’s been happening in 2023.

Talent market overview

The first half of the year was quiet for recruitment across the not-for-profit sector. Fewer roles were being created due to growth and hiring was reserved for replacements to fill roles left vacant by natural attrition.

As we moved through the second quarter, inflation started to slow and the economic situation looked – if not exactly positive, certainly less negative - hiring began to pick up.  Yes, positions available are largely down to natural movement rather than growth, but organisations are happy to hire now rather than cap recruitment.

Development and support

Employers in the not-for-profit sector recognised the impact of the cost-of-living crisis for their teams. The majority of our clients in the sector reacted by awarding employees a set percentage increase in salary, over and above their usual pay policies. This is something not generally reflected in the private sector and was much appreciated by sector employees.

In the permanent market, more of the roles we’ve been working on are due to promotions or secondments. The implication is that efforts to retain staff, such as investing in training and development, benefits and HR initiatives are having the desired impact.

Within the housing sector specifically, the continued upward trend in mergers is leading to the creation of roles, however these have tended to be due to restructures rather than increased headcount.

Market sector breakdown

The financial position and hiring landscape within our client base – split broadly into Housing Associations, Charities, Education and the NHS – varies enormously. Here’s a brief summary of 2023 and a look forward to 2024 for each:

Charities           2023 has been a challenging year for charities. The cost-of-living crisis has resulted in a ‘cost-of-giving crisis’ as the financially stretched public cut back on donations. However, within the charity sector, there are huge differences. The financial position of charities is extremely wide-ranging and will depend on size, type of charity, how it’s funded as well as the political landscape. 

To try and manage revenue, Charity Digital suggests that charities need to diversify their fundraising efforts. It says: 

Sufficient income diversity means that, if a charity’s main source of income diminishes or vanishes, the charity can continue operations and still meet the demands of service users. The cost-of-giving crisis demonstrates the importance of income diversity, as one source of income may well start to run dry for many charities.*

Occasionally, something happens that produces an unforeseen increase or decrease in donations. For example, Suella Braverman’s departure from government and the recent media focus on immigration has triggered a surge in donations to homelessness charities. Similarly, campaigns focusing on the wars in Ukraine and Gaza were very well supported despite economic issues in the UK.

The NHS             Hiring within the NHS is primarily driven by budgets. Trusts can hire when they have sufficient funds, hiring is paused when budgets are tight. Currently, the government is keeping NHS spending under tight control and the policy is having a big impact on the use of interim and contract staff.

Year-end falls in April, after which more funding will be released and Trusts can start to try and tackle staff shortfalls, found in many areas, not just finance departments. 

Universities        Finally, universities are getting back onto a firm financial footing after the detrimental impact of Brexit, followed by Covid. Brexit had a huge impact on research-intensive universities which drew funds from the EU pot.

Now, universities’ financial situations appear to be stabilising. Aged debt is going down, EU funding is gradually being replaced. We predict hiring trends will largely revert to their usual pattern as universities return to business as usual. 

One trend that may continue to plague the sector, though, is stubbornly high levels of student drop outs. One of the main causes for early exit by students is financial distress, something that is not likely to disappear in the short term, despite government efforts to curb it.

Housing Associations    As we reported earlier in the year, rent caps have proved a big challenge for housing associations (HAs). Although HAs are managing to navigate this, margins on planned developments have been affected.

This year, HAs have continued to focus less on new developments and more on improvements to existing developments and housing stock. Inflation has had a huge impact on costs. Decarbonisation of stock, fire safety recommendations after Grenfell are also key issues for HAs at the moment.

Mergers and acquisitions are continuing to increase, largely driven by the need to increase financial stability in the wake of these issues. As THFcorp reports:

Previously, the reasoning behind mergers was more about being able to develop more homes…. Whereas HAs used to take extreme measure by merging in order hit development targets, they are now doing so in response to widespread issues of safety and quality concerns.**

Looking forwards to 2024

We are expecting 2024 to pan out much like the latter half of 2023.

For charities, the NHS and Universities, we anticipate no major hiccups at this point. Yes, there will be an election in 2024, which could very well have a longer-term impact. The news agenda will always create short term spikes, but the underlying trend remains stable. Peaks and troughs will always exist within the NHS in line with budget allocations.

Housing Associations will continue to shy away from starting big new developments in favour of finishing partially completed developments and upgrades to existing stock until inflation goes down and the economy picks up.

In general, the sector was able to attract quality candidates from other sectors due to excellent benefits, flexible working opportunities and investment in training and development. 

However, some of that competitive edge has been eroded with the proliferation of hybrid, flexible and remote working patterns. In the main, we are still seeing greater success, both in securing jobs and keeping them, for people genuinely interested in working in the sector.

Boston Hale will continue to work with finance professionals, from part-qualified up to CFO level, on an interim and permanent basis. We anticipate a shortage in research accountants and capital accountants, and are very keen to meet people with this experience.

If you are interested in assignments within our not-for-profit markets, are looking to secure a permanent role or to hire into your team, we are happy to discuss your requirements and explore the market further. 

Contact Catherine Hegarty or Amman Johal 

 

* Source: www.CharityDigital.org.uk
** Source: Ray Tierney quoted in www.thfcorp.com

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