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| Path: Main Street > Resources/Library > Research Articles > Feature Article |
Competing for talent
By Jack Shand
February 1, 2010
One of the top trends facing the not-for-profit sector on an increasing basis is competing for quality staff with other employers. In my experience with not-for-profit hiring over the past decade, I have witnessed an evolution in what employers in the sector are seeking, and facing, when they hire staff. There are four trends employers and employees in the sector must understand - demand for more varied career experience; competitive compensation levels; work intensification; and the sector needing to add, and therefore attract, many more people to its workforce in the next decade.
Experience from other sectors
The first trend is a preference for multi-sectoral career experience. A generation ago, there was considerable emphasis placed on not-for-profit management as a distinct and emerging profession. Managing in this sector has its unique elements, working with volunteers among the more obvious ones, and many not-for-profits wanted more from senior staff than just an appreciation of these elements. Therefore, employers sought out experienced career specialists - notably individuals with certification in association management (CAE designation), fundraising (CFRE designation) and, in some cases, degrees or diplomas with not-for-profit management content.While the ideal candidate profile continues to place high value upon not-for-profit experience, boards are increasingly looking for other career experience from either the private sector and/or public sector. I have observed that employers want candidates who can both manage the organization effectively plus who have credible work experience with those whom the organization interacts in carrying out its mission - businesses, professionals, and governments.
Compensation disparities
The second trend is the pressure on compensation expectations and levels in the sector. As the issues before not-for-profits become increasingly complex, requiring management depth and strategic leadership from staff, the people qualified to deliver on the employer’s expectations will bring more talent to the table. It once was suggested that not-for-profit compensation should be one-third less than a comparable level position in the private sector. I am not convinced this approach, if it ever did have merit, will continue to attract and retain the calibre of people the sector needs to achieve the outcomes expected by stakeholders.While people moving into the not-for-profit sector, in my experience, do understand that compensation levels are generally lower than the private and public sectors, recruiting and retaining talent will certainly become more problematic if the disparity is too great. An organization will know if it has a problem if it has high turnover in key positions and/or if it has to compromise on the level of skill the job requires because the only candidates the employer can afford hasn’t the necessary experience. At a minimum, the governing board should commit to conduct research on compensation every two to three years to ascertain if the organization’s compensation levels are competitive with the market and then mitigate any identified issues (e.g., introducing a pay-for-performance incentive linked to rising revenues from programs, membership, etc).
Work intensification
The third trend, also related to the first two, is work intensification. It has been said that some not-for-profit organizations "have $250,000 expectations on a $90,000 salary," meaning they expect a level of performance from senior staff but do not have the means to afford the people who can deliver it.As the result, staff work harder and harder to try and keep up with expectations they may never be equipped to meet. Commitments and time pressures also increase for volunteers who need to fill the void. Where an employee can and does rise to the challenge and actually meets the high expectations, he or she soon realizes (perhaps aided by a headhunter) that their true market worth is much greater than what their present employer is paying. They are then incented to move to greener pastures. It becomes an unfortunate downward performance cycle for the organization in this predicament because it can lead to job vacancies, a disruption in important work, added pressure on the remaining staff (or volunteers) to take on the extra load, and the time and cost to once again go through a hiring process.
Increased need for employees
The fourth trend is one very ably defined by the Bridgespan Group, a consulting firm based in the United States. That trend is the current and continuing growth in the not-for-profit sector and with it the demand for increasing numbers of employees. The trend is no less applicable to Canada.There are several forces concurrently at play: a shortage of qualified people; an expanding sector with more associations and charities needing more staff; existing organizations adding more people to build their staff complement to deliver more services to members or clients.
During the past 20 years the number of registered charities has at least doubled in number, according to the Canada Revenue Agency. Research from the United States, conducted by the Bridgespan Group, forecasts that not-for-profit organizations (associations, charities, and related non-governmental organizations) will need almost two-and-a-half times their current staff complement before the end of the next decade. This is equivalent to the sector recruiting 50% of the graduates from every MBA program, each year, at every university in the country, for the next ten years.
Concurrent with the growth of the sector is the actual growth of the organizations within it. While there has been limited merger activity among associations in the past decade or so, accelerated by the major recession starting in late 2007, most associations and charities in the past five or ten years will acknowledge they have added to, not deleted, the number of staff.
The consequences for not-for-profit organizations that ignore these trends are clear. They will not perform effectively. Their support will gravitate to organizations which have the ability to achieve the outcomes which matter to members, funders, and partners. Some organizations will decline and slowly fade away. Others will have the impetus to merge and join forces with others.
Those who know how to address, and not fall victim to, these trends will attract and retain the talent necessary to accomplish what is expected of them – how they make the world, or their corner of it, a better place.
Content is © Jack Shand and is reprinted with permission.
Jack Shand, CMC, CAE, is president of Leader Quest, a management consulting firm providing expert advice to not-for-profit organizations since 1997. Leader Quest specializes in executive search/staff recruitment, strategic planning, governance, and organizational reviews. Jack can be reached at 905-842-3845 and 1-877-929-4473, or jack-at-leaderquest-dot-com.
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