Salaries in the NFP sector: Observations from two decades recruiting in Australia and the UK

Photo by Fabian Blank on Unsplash

Limited resources and responsible use of funds are a given in the NFP sector. 

“We don’t work here for the money.”
“I took a 40% pay cut when I moved here.”
“I know I could earn more in another job, but it’s not about the money.”
“We know the salary we’re offering isn’t competitive.”

We know most people who work in the NFP sector are not driven by money. This is as true today as it was when Heart Talent Founder Cynthia Harris started out as a rookie recruiter in 2005.

Here’s what has changed, though.

• A global financial crisis.

• The rise of flexible and part time work.

• Low employee engagement.

• Higher turnover and shorter tenure.

• A global pandemic.

• The rise of remote work.

• An endless marathon of change and uncertainty.

• A cost of living crisis. 

• NFP employers offering more competitive salaries.

Yes, you read that right. 

Salaries in the NFP sector are more competitive than you might think.

We’re not referring to the salary packaging benefits NFP employees in Australia can access to boost their take home pay (although this is a strong aspect of the employment offer which does make attracting top talent to the nonprofit sector easier).

We’re talking about the ethos of paying what it takes. 

15 years ago, almost every conversation we had with NFP hiring managers involved managing expectations about the salary being below market and limiting our ability to attract the right talent. 

These days, conversations like this are less common. They still happen, but not every day or week.

Paying a competitive salary critical to attracting the right talent. It makes big hairy audacious goals and bold missions easier to achieve.

In our research for the NFP Talent Attraction report, 34% of employers indicated that they struggle to offer competitive salaries. And while budgets will always be a consideration, what’s really interesting is what we found when we compared salaries across sectors.

We took a look at average salaries across 15 jobs, comparing what people get paid in the NFP sector with what people get paid for the same role in the commercial sector (with small businesses with less than $50m turnover / less than 250 employees).

The results were somewhat surprising.

On average, NFP employees get paid 22% less than their equivalent counterpart in the commercial sector.

The roles with the biggest variance between sectors are CEO and CFO.

Removing these salaries from this analysis, the variance in salary drops to 13.5%.

While 13.5% isn’t insignificant, it’s much less of a gap than we’ve been working with in the past.

If you’re curious about market salaries or have another question about something else in talent attraction, get in touch.