Associations in the WAR FOR TALENT Prepared by Tamara Wagester‐Subrick and Rebecca Brandt, CAE December 2014 [Type text] Contents Introduction .............................................................................................................................................. 3 Association Workforce Profile .................................................................................................................. 4 Figure 1: Most Prevalent Occupations for Association Staff ................................................................ 5 Figure 2: Education Levels of Association Staff .................................................................................... 6 Figure 3: How Much Does a Career in Association Management Pay? ................................................ 7 Figure 4: Age Distribution for Membership Association Staff .............................................................. 8 Table 1: Percentage of Veterans Nearing Retirement Compared to Mid‐Career Cohort .................... 8 Generational Review ................................................................................................................................. 9 Generation Y or Millennials .................................................................................................................. 9 Table 2: Generation Y Attitudes and Suggested Association Outcomes ............................................ 10 Baby Boomers ..................................................................................................................................... 12 How to Attract Key Talent ....................................................................................................................... 14 Arming Your Association for the Workforce Challenge .......................................................................... 15 Figure 5: Steps for Adapting Your Association to the New Labor Force ............................................. 17 Conclusion ............................................................................................................................................... 18 Appendix 1 ‐ Introduction to NAICS ........................................................................................................ 19 Author Biographies ................................................................................................................................. 20 Works Cited…………………………………………………………………………………………………………………………………….21 2 Introduction A tale of two imaginary associations… Association ICAN has a small staff. The majority For the purpose of this report we will use the of the staff members will retire within the next decade. ICAN’s leadership does not have definition for generations found in the ASAE confidence that their younger employees have report, “Generations X, Y, and the Future of the skills to effectively manage the association. They fear that if they do not find a way to plan Membership” from January 2007 ‐ “Associations ahead, their staffing will become a detriment to Now – Volunteer Leadership Issue.” the membership in the coming decade. GI Elders: born 1925 or earlier Association IMAY is a mid‐to‐large staff Silent Generation: born 1926‐1945 association. They have a strong balance sheet, a vibrant membership, and a lot of senior, Baby Boomers: born 1946‐1964 experienced staff who ensure that things always run on time. In the coming decade, 65% of the Generation X: born 1965‐1975 senior staff members will retire. Generation Y: born 1975 or later Which association has the better foundation to maintain success in the future? The answer ‐‐ both can be equally well off. It depends on how they equip themselves with quality staff by winning the “war for talent.” The enormous number of retirements of association management staff stars in the next decade will considerably modify the labor force landscape. By 2020, the ASAE annual meetings will have session topics that differ greatly from what you experienced five years ago. After all, by this date most employees will have lived their entire lives with computers, smart phones, social media, and grew up in an age where only out‐of‐date firms rely on fax machines. What will your association do to prepare for 2020 and your staffing needs? Industries, media, government and universities have focused their attention on the looming “workforce crisis” about to drastically impact labor markets across the world. To borrow a line from a car company, “this is not your father’s workforce.” The US Department of Commerce’s Bureau of Labor Statistics (BLS) predicts that by 2020, 25% of the US labor force will comprise of those aged 55 and over.i In other words, three‐fourths of the entire labor force will consist of Generations X and Y. What does this mean for the association management sector to attract, motivate and retain top talent from across the generations? Many industries are actively engaged in the “war for talent,” examining the best way to attract, hire, and retain Millennials. The purpose of this report is to 1) focus on challenges with the evolving workforce, and 2) provide association CEOs with information to address challenges, and to arm your association in the “war for talent.” 3 The BLS expects the labor force participation rate of younger workers and the prime age group (25 to 54 year olds) to decline. They also anticipate that the participation rates for older workers to rise, but it will remain significantly lower than the prime age group.ii The report projects the workforce aged 55 years and older will experience a much faster employment growth rate than 16 to 24 year‐olds and 25 to 54 year‐olds.iii In other words, the Baby Boomer Generation plans to work longer than previous generations while there are fewer younger workers to hire and less will be employed. First, we must understand where the current association labor force stands relative to other trends. If we are to know where we are going, we have to know where we came from… Association Workforce Profile The United States Internal Revenue Service’s official definition of an association states, “In general, an association is a group of persons banded together for a specific purpose.”iv Whether the association is formed for business, personal, or professional purposes, they exist to fulfill The Bureau of Labor Statistics expects that the noble and philanthropic mission to serve people. job opportunities within membership According to ASAE, the number of associations keeps organizations will increase in the coming growing every year. “ASAE members primarily represent years. They project the total number of jobs trade associations, and individual membership to grow, and many workers to retire. They organizations or professional societies, organized under anticipate that a growing population, rising Section 501(c)(6) of the tax code; and philanthropic incomes, and an increase in leisure time as organizations, organized under Section 501(c)(3). In more people retire to increase the demand 2009, there were 90,908 trade and professional for memberships in organizations that will, associations, and 1,238,201 philanthropic or charitable in turn, increase the number of workers vi v organizations.” For measurement purposes, the North that the organizations need. American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. Membership association staff is listed under the subsector group that includes Religious, Grantmaking, Social Advocacy, Civic, Business, Professional, Labor, Political, and Similar Organizations.vii For a full understanding, definition and illustrative examples of the organizations which fit into the association workforce staff classification, please see Appendix 1 at the end of this report. According to the BLS, “Nearly all of these organizations are part of the nonprofit sector,” adding that they “do offer profitable careers,”viii which should make the association management sector an attractive option for those interested in a broad variety of occupations. The BLS has over 300 individual jobs that people in associations classify as their area of occupation.ix These areas can range from an executive, to lawyer, to sales specialists, as well as many other paths. If you can dream about it as an occupation, opportunities probably exist for you in the association management sector. What a motivating concept for recruiting potential future leaders! Figure 1 breaks down the most prevalent occupations for association staff. 4 Figure 1: Most Prevalent Occupations for Association Staff Source: Employment Projections program, U.S. Department of Labor, U.S. Bureau of Labor Statistics. Employment by industry, occupation, and percent distribution, 2012 and projected 2022. For 813900 Business, professional, labor, political, and similar organizations. “Business and financial operations” occupations represent the largest percentage of occupations employed by the association management industry. This occupation category includes business operations specialists, human resource workers (of which labor relations specialists are expected to see a decline in the 10 year projections), accountants and financial specialists. The second leading occupation is “office and administrative support.” The category includes secretaries, administrative assistants, clerks and record keepers.