Key Considerations for Operating Efficiently in the Current Human Service Landscape

Insights From Our Human Services Industry Leader

Human services organizations often operate with limited resources, making optimization crucial for their survival, let alone their success. These organizations typically provide critical support and assistance to vulnerable populations, such as the elderly, individuals with disabilities, or those experiencing poverty or homelessness. Given the nature of their work and the populations they serve, it's essential for these organizations to run efficiently and effectively.

By optimizing their operations, human services organizations can stretch their resources further, serve more individuals, and achieve greater impact within their communities. This not only ensures their survival but also allows them to fulfill their mission of providing essential support and care to those who need it most.

To better understand exactly what human services organizations can do to achieve operational efficiency, we sat down with Kevin Testo, our Human Services Industry Leader, to learn more. Kevin shares why he has chosen to work with human services organizations, what trends are impacting the industry, as well as what they can do to improve efficiency.

Meet Our Human Services Industry Leader

As our Human Services Industry Leader, Kevin is responsible for business development, client/project acquisition, geographic expansion activities and determining how clients are best serviced within our Human Service Providers Industry.

Kevin joined TBG back in 2009 after working for a national Big 4 Firm. With over 20 years of experience in public accounting, he is well-versed in the unique requirements and reporting matters affecting human service organizations.

Why Human Services?

From an early age, Kevin was immersed into the world of customer service, as his parents own and operate a restaurant in the Capital District. In addition, community service was a pillar of his high school and college education. During this time, he learned what it meant to be a part of a community and developed a passion for serving others.

Kevin has been servicing non-profit and human services organizations his entire career. These organizations typically provide a wide range of support and assistance to individuals and communities in need. Their primary goal is to enhance the overall well-being and quality of life for the people they serve.

“Being an auditor in the human services industry allows me to understand my clients’ businesses inside and out,” shared Kevin. “These organizations play such an important role in our communities, and it’s exciting to provide advice that helps them achieve their missions.”

The Human Services Industry Landscape

The human services industry is undergoing significant changes driven by various trends that are reshaping the way organizations operate and deliver services. Understanding these trends is crucial for organizations looking to adapt and thrive in an increasingly complex and dynamic environment. Below are six trends for human services organizations to consider at this time:

1. Inflation and Interest Rates Updates— Fluctuations in inflation and interest rates can significantly impact human services organizations' operating costs, particularly for services that require substantial resources or depend on funding tied to interest rates.
2. Intensified Competition for Workforce—As the demand for human services grows, organizations face increased competition to attract and retain qualified staff. This includes challenges in providing competitive salaries and benefits, as well as offering opportunities for professional development and career advancement.
3. Shifting Population Demographics— The aging population in America is increasing the demand for services aimed at older adults, such as healthcare, home care, and support services. “Human services organizations need to adapt to meet the changing needs of this demographic,” shared Kevin.
4. Impact of Medicaid Reform Initiatives— Medicaid reform initiatives, such as Section 1115 Medicaid Waivers, can have a significant impact on funding for human services organizations. Changes in Medicaid funding can affect the availability and scope of services provided.
5. Suspension of Prior Years' COVID Relief Funding— The suspension of prior years' COVID relief funding can create financial challenges for human services organizations that relied on this funding to support their operations. Organizations may need to find alternative sources of funding or adjust their budgets accordingly.
6. Revenue Shortfall in NYS 24-25 Budget— The projected revenue shortfall in the New York State 24-25 Budget highlights the financial challenges facing human services organizations. “Organizations may need to make difficult decisions regarding their operations, services, and budgets to address this shortfall,” added Kevin.

Considerations for Improving Efficiency & Optimization

Given the rapidly changing human services landscape, it is more important than ever before to implement strategies to improve efficiency wherever possible. Kevin highlighted the following three ways for human services organizations to improve efficiency and optimization:

1. Regularly Review Your Financial Performance— Due to the competitive nature of fundraising and the growing need for transparency, human services organizations must show fiscal responsibility and measurable program outcomes. Management needs to evaluate various metrics, such as:
   1. Performance (e.g., program efficiency)
   2. Outcomes (e.g., meals served)
   3. Capacity (e.g., growth of consumers served)
   4. Financial (e.g., budget to actual)
   5. Sustainability (e.g., operating reliance)
2. Rely on a Trusted Advisor— Human services organizations can significantly benefit from partnering with a trusted advisor. Relying on an expert’s opinion when making decisions exposes your organization to industry knowledge and best practices, an outside viewpoint on your internal processes, and additional networks and resources that you may not have had access to before. As a result, your organization will have more time to focus on serving the community and achieving its mission.
   
3. Partnerships & Collaborations— Organizations with limited resources may also want to consider partnering with other organizations to help them achieve their goals more efficiently. Partnering or collaborating with another organization may allow you to share resources and best practices, reduce costs, and enhance the impact of both organizations.
   

How We Can Help

At TBG, we understand the unique challenges facing human services organizations and are dedicated to helping them achieve their goals. If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.