In the nonprofit world, salary is always a touchy subject. For a variety of reasons we all know too well, there are rarely enough resources to pay people on par with the for-profit world. We also see a very stark trade off between compensation and mission. All too often, I’ve seen nonprofit leaders weigh providing more or better service to families versus increasing compensation for their staff.
Contractors are everywhere in the nonprofit world. When I started working with nonprofit organizations in 1993, almost everyone was an employee, except for the all- too-rare consultants.
Now, it’s hard to find an organization of any size without contractors. They’re not only consultants, but also others who usually bring very specialized skills.
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;