It’s no secret that Health and Human Services agencies across the country are faced with annual budget constraints. Organizations are constantly pushed to “do more with less.” Sound familiar?
State and federal aid may provide temporary relief, but agencies are expected to meet the ever-increasing demand and expectations of their services, regardless of their budget size. While budgeting restraints might not be a challenge that is quickly solved, organization’s can work to achieve success by maximizing budgets and controlling costs through workforce management.
As we know, the heart of any agency is its employees, and labor costs for Human Services organizations usually make up about 70% of overall budget. Employees that provide services to clients determine the overall impression of their organization. With that said, agencies need to evaluate their overall employee lifecycle and decide if there is a way to increase productivity to contain costs while driving high quality results. This involves first analyzing their workforce and then leveraging new strategic solutions to streamline processes.
Addressing the Disconnect in Talent Spend
Every nonprofit origination has the desire to employ the best talent to serve their clients. This involves not only hiring the right candidates, but also making sure to focus on employee development in order to engage and retain them. However, very few agencies are able to allocate their talent budget on these types of developmental opportunities.
According to a report conducted by Talent Philanthropy Project, “Organizations spend a significant majority of their overall budgets on talent costs, but the vast majority of those costs are allocated to the core costs and only a minor portion is spent on staff development.” In this research, core costs are referred to as salaries and benefits, while staff development costs are recognized as professional development and human capital systems.
The disconnect here is that the funding dedicated to talent management and professional development is just a miniscule portion of an already tight talent budget. Unfortunately, a lack of these efforts can attribute to the high and costly nonprofit turnover rate. A greater portion of the current budget should not be allocated to invest in a talent management system, as this would take away from the core costs of salaries and benefits. For this reason, board members and leadership must continue to fight and defend to expand talent investment in order to implement initiatives to retain their hired employees.
Leveraging Technology to Streamline Processes
According to a recent Forbes article, “Many companies fail to have a holistic approach to the entire candidate lifecycle from attraction through onboarding and development. This disconnect creates a fractured process where companies over-emphasize hiring and under-emphasize development, leading to retention issues and creating an endless loop of new recruiting”. This snowball effect is all too familiar to those in the Human Services industry. In order to correct this flawed process, many agencies are considering solutions that place a greater emphasis not only the recruiting and onboarding activities, but what comes next for their workforce.
Manual talent management processes are labor intensive for managers and can take away from their daily responsibilities. Embracing a unified solution to build strategic goal setting and tracking allows for an ideal alignment with the organization’s objectives as well as overall increased employee engagement. Engaged employees are more understanding of the organizations’ overall mission and are better able to not only serve their clients, but serve them well.
This type of investment in employee development is exactly what many organizations are lacking in their talent budget, but it is too costly to be ignored. The development of an agency’s employees will help to better serve their clients, and in turn, establish the agency as a leading provider in the human services market.
This DATIS Blog was written by Stephanie Kaselis, DATIS, on August 7th, 2017 and may not be re-posted without permission.