What Hiring Trends Reveal About The Impact Sector’s Future
In the wake of a global pandemic, racial reckoning, and unprecedented economic uncertainty, the social-impact sector is experiencing tremors. That things are shifting is obvious to anyone paying attention, but how they’re shifting, and why, feels more elusive. To gain an informed perspective on the state of the nonprofit sector, I spoke with leaders in executive search firms who specialize in placing top talent within mission-driven organizations. These candid conversations reveal a nuanced picture of the sector — one of adaptation, re-imagining, and, hopefully, resilience. From sector contractions to the stickiness of remote work, here are six key insights that are redefining nonprofits.
1. Resource Tightening Slows Growth
Funding challenges are creating a ripple effect across the nonprofit landscape. According to Laura Donald, Crystal Combs, and Emily Kathleen Mays, Founder and Partners of Axis Talent Partners, organizations are facing significant financial strain. “There is generally less funding and more resource constraint in the social-impact sector,” Donald explained. Many nonprofits that initially benefited from COVID relief grants or post-2016 or -2020 bumps are now scaling back operations. Across the board, interviewees noted that funders are re-examining priorities, resulting in downsized grants amid challenging economic and political environments. Compounded by recent inflation and high interest rates, nonprofits are operating with substantially reduced capital.
This financial squeeze has directly impacted hiring, with recruitment experts noting fewer job postings and most searches focused on replacing existing roles rather than expanding teams. According to Monisha Lozier, Co-Founder of Bellwether and Promise54, there is “far less work,” causing search firms to struggle financially and even lay staff off. “I am definitely seeing fewer postings this fall than in past years,” Erin Keller of EK Talent said.
2. The Remote Work Revolution Is Here to Stay (at least for nonprofits)
The pandemic has fundamentally reshaped workplace dynamics. Previously, a quarter to a third of CEO placements involved relocation. Now? That number has fallen to just 10-15%. Molly Brennan, Global Managing Partner at Koya Partners, explains, “The nonprofit sector overall has been slower to require teams to return to the office.” Flexibility is no longer a perk — it’s an expectation. “Without a flexible geographic location,” Rosa Morris, Global Market Lead at ZRG Partners warns, “talent pools diminish quickly.” Many nonprofit leaders, especially in senior roles, are increasingly prioritizing flexibility in their positions. This stands in stark contrast to the corporate sector, where most jobs are now fully in-person or hybrid.
3. Staff Culture and Internal Tensions Are More Consuming, but Efforts Aren’t Yielding Much
Staff demands on nonprofits in terms of quality of life and non-salary benefits seem to be outpacing those placed on the corporate sector. Nonprofit staff are increasingly demanding more comprehensive workplace enhancements. From unionization efforts to requests for four-day workweeks, organizations are facing unprecedented internal pressures. In addition, nonprofit staff
are demanding salaries closer to “market” (or for-profit) rates. “A lot of organizations have been thrust into reactive or defensive positions with their staff,” said Donald, Combs, and Mays from Axis Talent Partners. “This in turn has made it harder for organizations who are hiring or thinking of hiring to balance their internal culture with how they’re perceived externally,” they explained.
Even as employees increasingly demand more from their employers in terms of flexibility and compensation — and employers adapt to meet those demands — organizations are struggling with low employee satisfaction and high turnover rates. As Donald and her partners noted, there’s “a burbling rejection of the idea that folks can and should work for less money in exchange for the ‘psychic rewards’ of doing mission-based work.”
4. Career Expectations Are Shifting, and Tenure in Jobs Is Shortening
Younger generations entering the workforce are redefining sector boundaries. They’re increasingly less loyal to specific organizations and even to the nonprofit sector as such. According to Morris of ZRG, “The rising generation views the boundary between social-impact and private sectors as being much more fluid than previous generations.” For this generation, making a difference and feeling valued is not confined to nonprofit work; they are willing to move across sectors to find the right opportunities.
This shift has led to shorter tenures across the board. Shorter job tenures are becoming the new norm, with professionals prioritizing meaningful outcomes over long-term organizational loyalty. As Morris observes, leaders and staff in social-impact organizations “are not going to stay 5, 8, 10 years as the norm anymore.” This change is driven by a mix of reasons, including career growth, the need for fresh challenges, and a desire for greater work-life balance. “New talent are not measuring their impact on a movement or organization by number of years but on outcomes,” Morris emphasized.
5. CEO Exits and the Rise of Fractional Roles Demand Greater Organizational Agility
The sector is experiencing a massive generational and demographic shift, as founders and CEOs are leaving. Donald, Combs, and Mays from Axis Talent Partners described conversations as “saturated” with talks of exhaustion. Upon leaving their roles, leaders are not moving to lead bigger organizations. Instead, many are taking sabbaticals, shifting to consulting, or even moving abroad in search of a better quality of life. As a result, Donald and team noted, “We’re placing more first-time CEOs and successors to founders than ever, which creates unique challenges for these leaders and the organizations they join.”
This transition isn’t just about new faces. Brennan from Koya Partners observes that these roles have become “all-encompassing” and require “super humans who can lead a team, be a visionary, implement strategic plans, raise money, serve as an external spokesperson, manage operations and finances, and on and on.” The more tumultuous dynamics are causing tensions within organizations and between organizations and their funders and boards, translating to superhuman expectations on nonprofit leaders that feel even less manageable than before.
Meanwhile, as organizations tighten their budgets, they are increasingly turning to freelancers, consultants, and interims to fill gaps and access expertise without the long-term commitments of full-time hires. “There has been a significant increase in contract employees, both in terms of leaders moving into those careers and organizations leveraging fractional talent more,” notes Keller. Morris from ZRG concurred: “Organizations are leveraging fractional, consulting, or part-time talent more.” Lozier, too, is seeing “an uptick in organizations looking for candidates for interim roles.”
For professionals in the social-impact sector, this trend offers greater flexibility and the ability to contribute to multiple organizations. But it can create challenges for organizations looking to maintain consistency and build long-term institutional knowledge, requiring them to rethink leadership and staffing structures with greater agility.
6. Approaches to Equity Are Evolving
During the racial reckoning of 2020, there was a significant uptick in equity-focused roles, especially within social-impact organizations. This demand has since reversed, as Keller pointed out: “In 2020, there was a massive hiring bump in equity-focused roles, but, since 2022, there has been a sharp decrease in roles focused exclusively on increasing equity.” Experts agree that shifts in funder priorities, legal challenges in certain states, and the initial rush to fill these roles have all contributed to this change.
Many organizations have moved toward integrating equity-focused responsibilities into broader leadership roles rather than creating standalone positions, but that has only compounded the herculean demands placed on leaders.
Meanwhile, the push for diversity, equity, and inclusion in leadership, which led to a marked increase in the hiring of leaders of color, has not translated into the same level of support. According to Donald, after the murder of George Floyd, “there was a major wave of executive transitions, particularly of nonprofit ED and CEOs, to which boards reacted by placing a huge emphasis on hiring leaders of color.” While diversity in leadership has been prioritized, support for these leaders within organizations remains a critical concern. These experts raised concerns about whether organizations are adequately supporting their leaders and managing burnout, particularly among leaders of color.
As the demand for diverse leadership grows, organizations need to ensure that they provide the necessary infrastructure, mentorship, and resources to support leaders to succeed in these tumultuous times.
The Road Ahead
Despite challenges, hope persists. As Donald reflects, thousands of people still want to “dedicate their considerable skills, talents, and labor to the work of making a difference.” As the social-impact sector continues to navigate this time of uncertainty and transformation, these emerging trends reveal crucial insights for both organizations and job seekers. More importantly, they present the sector with crucial questions:
- What are some different models for how values and mission co-exist internally and externally? What is the “right relationship” between internal culture and external mission? What values might staff, leadership, and boards turn to when those needs are in tension?
- Are we in a short-term lull or a longer-term realignment of the social-impact sector? What signs should we be looking for to make that determination, and how would we prepare differently based on what we observe?
- How are the trends around unionization and greater investment in internal culture, on the one hand, and shorter tenures and more fractional work, on the other, interacting? Is there a new staffing model on the horizon that maximizes the upsides of both while minimizing the downsides? What might it look like, and what are small experiments nonprofits can test out?
Please share your thoughts. This moment demands that we’re clear-eyed and forward-looking. The more we learn from each other, the likelier we are to deliver on the promise of our sector to transform lives and collectively chart a path toward progress for the communities and issues that brought us to this work in the first place.