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.
When it comes to Human Resources, are you covered? At a recent networking event, a colleague mentioned that because her organization functions with a small staff, she was unsure what formal Human Resources systems were necessary. I shared with her that having a basic system is critical to the effective function of any nonprofit organization, even those with an all-volunteer staff.
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 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.
For U.S. nonprofits, finding great talent is more difficult than ever. Hiring has never been easy in this sector because of limited salaries and incentives. However, in today’s market, persistently low unemployment rates and the growing complexity of nonprofit jobs means even smaller candidate pools.