NFP leaders making moves to drive future growth strategy - PwC 2nd Annual Not-for-profit CEO Survey

• PwC’s 2nd Annual Not-for-profit CEO Survey reveals NFP leaders priorities for preparing for the future of work
• 79% (up from 77%) of organisations say that the need for digital upskilling of employees has become a higher priority in the context of COVID-19
• 82% (up from 78%) of organisations provided employees with skills and training in the last 12 months to help them adjust to the impact of new technology

Before the pandemic, technological change was already reshaping the skills required for workers to thrive in a digital world. As the country’s second largest employer, Not-for-profit (NFP) leaders and the sector are adapting to the ongoing impact of COVID-19, upskilling for a digital world, and preparing for the future of work.

According to a new study by PwC Australia, nearly 80% of leaders across the NFP sector said the need for digital upskilling of employees has become a higher priority in the context of COVID-19 while over 82% of organisations provided employees with skills and training in the last 12 months to help them adjust to the impact of new technology. This figure dropped to 50% in reference to small NFPs.

PwC’s 2nd Annual Not-for-profit CEO Survey examined the views of Australia’s NFP chief executives on their priorities and progress around upskilling for the digital world and preparing for the future of work.

Rosalie Wilkie, Social Impact Partner at PwC Australia, said, “In 2021, the NFP sector is striving for balance between future readiness and coping with daily disruptions. To remain viable in today’s environment, NFPs need to adapt operating models and leverage digital channels to survive and thrive in the future. Our survey shows this is a key priority for NFPs as a result of COVID-19.

“The requirements of the sector continue to evolve rapidly and NFP leaders and boards need to resist the temptation to think short-term. Exploring new mechanisms to effectively deal with resource constraints, skills shortages, and emerging existential threats, will ensure NFPs have what’s required to build sustainable, future-focused organisations.”

Defining the skills needed to drive future growth strategy

Findings from the survey suggested that NFP CEOs are making progress around defining the skills needed to drive their future growth strategy. The top skills employees need to prepare for the impact of technology on their role include data analytics/analysis (50%, up from 17% in 2020), training in new software and programs (33%, up from 27% in 2020), and teamwork/collaboration (21%, up from 14% in 2020).

Overwhelmingly, 77% said the greatest challenge organisations currently face in their upskilling efforts is a lack of resources such as budget, people, time, and knowledge, to conduct the upskilling programs needed, up 16% from last year’s findings. This was followed by disruption of day-to-day activities and measuring the impact outcomes and change management.

In relation to upskilling, less than half (46%) of NFP leaders said their organisation has made progress improving leaders’ knowledge of technology and its potential implications. Over three quarters (77%) of NFPs are starting to make progress with improving workers’ and leaders’ knowledge of technology and its potential implications, while 16% are making significant progress. Three quarters of NFPs are starting to define the skills needed to drive their future growth strategy (up 10% from last year) with 21% making significant progress, and 66% are in the process of establishing an upskilling program that develops a mix of soft, technical and digital skills.

Lawrence Goldstone, Future of Work Lead Partner at PwC Australia, said, “The degree to which NFPs can benefit from technological change will depend on the skills of their workforce and the ability to adapt to the digital world. NFPs need a clear vision of where they’re heading and the specific skills required to take them there, as well as the willingness to adopt new ways of working. The rapid roll-out of digital upskilling for NFP employees over the past 12 months shows many have the will and are charting the way for their organisations.”

Supporting employees in the NFP sector

The pandemic significantly impacted the NFP sector with organisations relying on urgent financial assistance to continue to deliver their services exacerbated by the pandemic affecting the health and wellbeing of staff and volunteers. With the changing work environment, 57% of NFP organisations are making significant to moderate progress on implementing a strategy or plan to support the mental health and wellbeing of their workforce.

For the second year running, NFP CEOs cited stronger organisational culture and employee engagement as the biggest benefit of upskilling programs (85%). Also, 34% of NFPs are starting to make progress around developing a compelling employee value proposition focusing on attraction, engagement and retention of employees.

On the communication and collaboration front, 62% said they were continuing to build employee engagement through open communication on skills of the future with 19% making significant progress, and 50% saying they were collaborating with academic/government institutions on the skills needed for the future. Additionally, 57% said they were implementing a diversity and inclusion strategy to attract a wide range of talent and ensure inclusiveness in how we work, with 21% making significant progress.

Mr Goldstone said, “Employee value propositions across all industry segments are being refreshed in response to the tight labour market. While retention may not be an issue for NFPs now, staff contemplating their next career move will have more choice, both within the sector and outside it.

“The NFP sector has also made steady progress on mental health and wellbeing programs to support staff in the constantly changing work environment over the last year.”

Future proofing to deliver greater impact

While it is already a challenging time for NFPs to stay afloat and grow, leaders in the sector recognised the need to invest in or change for future impact elements of their workforce strategy - top aspects included strategy or operational model (60%), shifts in leadership and structure (25%), and risk and compliance obligations (14%). At the same time, 43% of NFP organisations agreed that outsourcing some or all of their non-core activities such as finance, human resources, or legal services will provide value and/or benefits to their organisation.

Interestingly, while 56% of organisations disagreed that automation is putting many people's jobs at risk within the NFP sector, PwC’s latest Hopes and Fears Survey revealed the opposite with 59% of Australian workers across the board worried that automation is putting many jobs at risk.

Ms Wilkie said, “While automation may impact jobs in the sector differently, it could enable efficiencies. The opportunity to offer employees a richer experience by automating low value tasks such as some fundraising activities, volunteer management, marketing campaigns and invoicing, and allowing them to concentrate on more strategic tasks is something NFP leaders could embrace.

“Leaders must be continuously aware when it comes to the knowledge and implications of technology, and emerging risks like cyber, the full value of technological change can only be derived if it is backed by a digitally competent workforce.

“NFPs are becoming more aware that they face increasing exposure to cybersecurity risks and obligations around data privacy, however this did not translate as a skill that NFP CEOs identified as required in the next 12 months. A future focused, digitally enabled NFP needs to embed cybersecurity in their ways of working to maintain trust and avoid operational impacts.

“The demand for services in the NFP sector is growing and the way donors behave has changed. It is important for NFPs to develop strong leadership to drive organisational success and look at new business and financial models to remain sustainable. Furthermore, through the increased use of technology, NFPs can drive innovation and more effectively attract, retain and manage key talent in both employees and volunteers.”

To view PwC Australia’s 2nd Annual Not-for-profit CEO Survey, click here.