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Report recommends ways for nonprofits to retain key employees

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Nonprofits are having difficulty finding and retaining the professionals they need to advance their missions, and continue to face downward pressures on contributions and grants as costs rise faster than revenue, according to a report by Princeton-based consulting firm Mercadien Group.

Mercadien recommends nonprofits struggling to find and retain good people shift their emphasis toward developing and retraining personnel, and “consider outsourcing those functions such as accounting, technology and other areas, which can be handled more efficiently, and oftentimes at a lower cost to the organization.”

The report found while funding and employment levels have stabilized, “It is evident that more is expected from current employees following an already stressful 36 months,” and advised nonprofits to “consider outsourcing certain functions or hiring contract employees as a possible means to avoid employee burnout.”

The majority of nonprofits expect their work force to either remain at current levels or increase slightly, the survey found. “Fewer organizations are projecting extreme increases or decreases in their capital spending, perhaps illustrating a perception of ‘playing it safe,’ ” the report said. Mercadien advises nonprofits to leverage existing infrastructure, such as automating manual processes by using existing computer applications, making employee workflow more efficient or lowering the cost to provide customer service.

Nonprofits need to manage the challenge of downward pressure on income and confront costs that are rising faster than revenue, Mercadien said. The report advises nonprofits to “begin to consider increasing your integration and utilization of financial management tools such as cash flow analysis, financial and management reporting and cost measurement systems.”

Sherise Ritter, managing director and practice leader of the NonProfit Services Group at Mercadien, said, “The challenges facing the nonprofit organizations are real, and this report will provide insight into some of the key pain points that nonprofit organizations are facing. ”

Mercadien provides accounting and tax, consulting and technology services.

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