Australia’s not-for-profit workforce needs a major revamp: report

Posted on 14 Nov 2024

By Matthew Schulz, journalist, Institute of Community Directors Australia

Australia Map People Aerial shutterstock 505163839

The not-for-profit sector’s huge workforce needs more investment and better planning to thrive, a national study has found.

Melbourne University Professor Jo Barraket

Not-for-profits are the country’s biggest employer outside government, with charities alone providing paid work to 1.47 million Australians or 10.5% of the total workforce. There are an additional 3.5 million volunteers on the books.

Yet hundreds of submissions for a Not-for-profit Sector Development Blueprint want wholesale changes in the way NFP workforces and the volunteer army are supported.

The final Blueprint – developed with the help of a panel of experts – is set to be handed to the federal government by the end of November. The lead author, Melbourne University’s Professor Jo Barraket, said this week that government departments and advisors were in the final stages of a handover, which she anticipated would coincide with the federal Parliament’s final sitting week.

The final Blueprint will make recommendations to support the development of the sector over the coming decade, although many of those recommendations have been foreshadowed in a report summarising 163 submissions and consultations with nearly 100 organisations.

Unions Workers May Day March shutterstock 1390166201 — Australia's NFP workforce needs greater funding and other support, according to sector advocates.

"The only way to combat critical staff shortages and undervaluation of the workforce is through long term funding cycles linked to permanent, secure jobs”.

Australian Services Union submission

Top priorities for the sector’s workforce

According to the “Synthesis of responses to Blueprint Issues Paper”, “the critical importance of investing in, developing and planning for the NFP workforce … was broadly recognised as an urgent issue for the sector”.

The paper outlined the following priorities:

to ensure funding and procurement integrate workforce and workforce development needs
to invest in developing cross-cultural competencies and diversity and inclusion practices … to attract and retain a diverse workforce
to invest in the development of future leaders who reflect Australia’s diversity
to formalise commitments to peer work and lived expertise
to create and implement a workforce development strategy
to develop better career pathways for workers
to recognise and properly resource volunteer management
to enable sector voices in decisions affecting workforce development and retention.

The report found that many NFPs worked in service industries which tended to be labour-intensive. It referred to a Productivity Commission report that found productivity gains in these industries were “challenging” and were best achieved through innovation.

Many submissions to the Blueprint argued that “a healthy, skilled and properly resourced workforce” was critical to both the sector and “the nation’s social and economic fabric”.

Many of those submissions highlighted the need to “redress the wellbeing deficit” experienced by workers and volunteers, particularly those working in sectors responding to exclusion and hardship.

Other submissions highlighted the need to boost digital and data capabilities to properly manage risk, while enabling organisations to address “emerging opportunities”.

Some submissions said more needed to be done to “attract and retain people from communities the sector serves” and to better address “entrenched gender inequities” and how they affected how the sector was valued. Many others called for greater diversity and inclusion within the workforce.

Childcare Workers shutterstock 1172186629 — Several sectors, including those involved in childcare, highlighted the difficulties in attracting and retaining staff.

Reforms needed to ease pressure on NFP staff

The summary report found that in the paid workforce, “poor approaches to procuring and funding NFP activity by governments and to some degree philanthropy, have had a profound effect on the strength and sustainability of the paid NFP workforce”.

It called out “historic underfunding and short-termism”, which in turn caused issues with attracting and retaining staff, and limited career pathways.

The Australian Services Union (ASU), Clubs Australia and CVGT Employment were among those to note the “labour intensiveness” of work, which triggered “strong price and cost sensitivity” for NFPs. The ASU in its submission argued that inadequate funding created “downward pressure” on staffing and conditions, and that “the only way to combat critical staff shortages and undervaluation of the workforce is through long term funding cycles linked to permanent, secure jobs”.

Those issues were compounded by critical industry shortages, submissions said. The Mental Health Coordinating Council and the Centre for Excellence in Child and Family Welfare highlighted the difficulties in attracting, recruiting and retaining staff, especially in rural and remote communities. This was even more pronounced when organisations were attempting to employ people with lived experience of specific social conditions, people from CALD groups and people from First Nations communities. The lack of diversity in sector organisations may itself contribute to the problem, the submissions argued.

In some cases, advocates such as Deafblind Australia and Diversity Arts Australia pointed to a lack of formal partnerships with education providers, limiting the sector’s ability to train a future workforce.

Respondents to the issues paper said there must be “a strategic and resourced response to the labour needs of the sector”, which in turn would rely on funding reform, investment in workforce development, infrastructure for innovation, and reforms to the “historic devaluing of women” involved in low-paid or insecure work.

Volunteer army needs a new strategy

The summary report also drew attention to the big decline in volunteering.

Jobs Australia, for example, said it had experienced a 32% drop in volunteers for its member organisations in the year to mid-2023, while the Mental Health Coordinating Council said it had suffered an 80% slump in community-managed mental health services volunteers in four years.

Groups said the Covid-19 pandemic had disrupted many long-term volunteering commitments, red tape was discouraging volunteers, and organisations were struggling to recruit skilled volunteers in emerging areas such as digital skills.

The report suggested demographic and lifestyle changes were also affecting volunteering, and observed that organisations had noted a shift to short-term volunteering, and people involved with multiple organisations, requiring extra background checks and onboarding procedures.

Others believed that growing workforce participation among women could be limiting the influx of volunteers, as could the impact of costs of living and job insecurity.

Submissions from the federal Department of Health and Aged Care, Victorian Arabic Social Services (VASS) and Volunteering ACT said the sector faced “a history of chronic under-resourcing, or no resourcing, of volunteer leadership and management”.

“Investment priorities need to be broadened to understand and account for the true costs of enabling volunteering and facilitating volunteer involvement,” Volunteering Australia wrote in its submission.

BERG synthesis report — Tap on the report to read in full

The Not-for-Profit Sector Development Blueprint Issues Paper was first released for public consultation in November 2023 by the Blueprint Expert Reference Group (BERG).

That group was set up by the federal government to help “guide government reform and sector-led initiatives to better support and connect with communities.”

It is intended that the Blueprint will inform future government policies, although Professor Myles McGregor-Lowndes – from the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) and ICDA’s Community Directors Council – noted in his submission that the inquiry was the latest in a long line of consultations and reports on the sector over the past 30 years.

In a report referenced by the Blueprint summary, Professor McGregor-Lowndes noted that of 160 government recommendations affecting the sector in that time, just 21 had been implemented.