Recently, a very wise person (our very own Alison LaRocca) stated, “Business models are the new strategic plan.” I agree—but even more than a strategic plan, a business model is how your whole enterprise will function now and in the future. It clearly encapsulates everything you do, from fund-raising to delivering services in your community.
All too common story ... I was recently working with the leader of a nonprofit organization who is talking about his latest dilemma: a mid-level manager who is exiting the organization, and both this manager and he were upset. He was disappointed that the manager was leaving but didn’t think she had lived up to her potential. On the flip side, the manager felt resentful, believing she was hired for a very different job than the one she was required to perform.
When the leader asked me for my advice on what to do next, I suggested the departure is probably mutually beneficial. In truth, both leader and manager would not be able to reconcile. The challenge wasn’t a typical human resources issue about compensation, communications, or relationships.
At least once a week, we’re asked about compensation trends in the nonprofit world.
It really isn’t surprising. Our Lean Recruitment clients want to hire the best talent they can while retaining as much of their hard-earned resources as possible. On the flipside, senior nonprofit leaders searching for their next opportunity through our subsidiary, AccessHR’s value-job search, want to land a rewarding position and fair compensation as well.
Here are five trends in nonprofit compensation we’ve observed in the past three years. We see these trends in the clients we work with most frequently—national, state, and regional organizations providing vital social and education services to vulnerable children, youth, and families.
1. The Competition Isn’t Regional; It’s National
Currently, the U.S. is both blessed and cursed by a strong national economy. Unemployment has decreased to very low levels, meaning fewer people are seeking jobs; and salaries (especially for senior positions) are increasing. At the same time, the number of nonprofits in existence and their need for highly-qualified employees are also increasing, putting great strain on regional labor pools.
The result? We’re seeing more organizations that could previously fill job openings locally now need to search regionally—or even nationally—to find a strong pool of candidates. And this isn’t just the biggest organizations; it’s small to medium-sized ones, too. Nor is this trend only for new organizations trying to build their brand as an employer;
I recently was invited as a guest on Staffing Startup TV- the leading podcast for recruitment entrepreneurs. Dee Williams asked some compelling questions that will help you learn how we created the system, how it works, and why the uptake has been so swift.
When Executive directors and CEOs of nonprofit organizations share their greatest challenges with me, the list of common frustrations can include- fundraising, board development, and effectively managing personnel. When I start to focus on how to overcome their biggest obstacles, these senior managers begin to realize that one of the biggest hurdles they face was not even on the list, yet it is integral part of all the challenges facing them. The need for data. The need for data leads directly into the “evaluation trap”. The good news is there is a solution to this trap, most of nonprofit leadership is simply not aware of it.
And it wont' blow your budget...When I am speaking to nonprofit professionals, the conversation usually turns to the mission of their organization and the impact it has on the community. The big question is not how can an organization measure their impact and communicate it to private foundations, government ag encies and the community, but on how can they afford not to? An independent evaluation has benefits that cannot be ignored, it can prove the program is meeting its mission, demonstrate that the benefits of the nonprofit are being effectively received, and quantify the impact of resources.
When seeking a new hire, a nonprofit has concerns that may differ from a potential hire in the corporate world. Nonprofit professionals can be faced with non-traditional work hours, budget constraints and a diverse group of individuals to serve, such as donors, potential donors, corporate partners, other staffers and the individuals served by the the nonprofit.
Finding top-notch talent is a continual challenge for any nonprofit leader. Our nation’s currently-low unemployment rate means stiffer competition for a smaller pool of potential candidates. Furthermore, the limited funding afforded to most nonprofits makes it difficult to offer the pay and other benefits to attract leading prospects. The challenge is compounded by the fact that many nonprofit organizations have a very small (or nonexistent!) human resources staff to dedicate the process of seeking new talent.
When a client has a critical senior position that comes open such as CEO or Executive Director, or a very hard-to-fill position, such as Director of Development, we are often asked if they should attempt to recruit for the position themselves or spend the time and money to hire a professional recruiter for the job.
Growing an organization is a challenge that every leader has to address sooner or later.
Finding and securing the right talent in response to growth is among some of the most difficult, yet critical decision making a leader faces. These decisions can cause stress and even cost your organization significant amount of money if they aren’t made well.
One of the first subjects I cover with nonprofit leaders when we are talking about business models, strategy, fundraising, or a myriad of other topics, is the difference between customers and consumers. I can’t understate how crucial understanding this difference is to nonprofit leaders. I am not one who touts the "supremacy" of the for-profit world over the nonprofit one, but I do see ways that one sector can contribute to another and this is one where nonprofit executive directors and CEOs can benefit. Having clarity on the difference between customers and consumers will enable you to understand the motivations and needs of some of your most important partners, thereby allowing you to more effectively serve them.