But there is one critical piece of the strategy execution puzzle we haven't talked about yet - people.
Like any organization, a nonprofit is as good as its people. You may have the best strategies and execution plans but all of that would come to a cropper if you don't have the right team on board.
Conversely, when you have the right people, it's comparatively trivial to come up with plans and strategies that'll propel your growth and help you achieve your mission.
The nonprofit hiring landscape
This might surprise you but nonprofits are the 3rd largest employer in the US, and employ a combined 10.7 million people. But unlike the for profit sector, there are several issues that nonprofit recruiters and managers grapple with.
Nonprofit HR, an HR firm that helps with many American nonprofits in the human resource space has recently published the 2015 national Nonprofit Employment Practices Survey.
This report, which was compiled after contacting 362 nonprofits has thrown up several interesting stats.
1) More nonprofits are hiring than before
As recessionary pressures and fund crunch have slowly eased, more nonprofits are hiring compared to past years. Between 2008-2014, 49% nonprofits increased their staff sizes, and 50% are creating new positions.
2) Hiring is still ad-hoc in many nonprofits
1 out of 3 survey respondents confessed that hiring is their biggest staffing challenge, with 52% reporting that they didn't have any recruitment strategy.
3) A majority of nonprofits function without a recruitment budget
67% of nonprofits function without a recruitment budget. Of the ones that do, the average budget is $5500 with smaller and medium nonprofits operating with recruitment budgets of $1,500 and $5,000 respectively. This underinvestment in formal recruiting strategies means that most nonprofits would be stuck between a rock and a hard place when a crucial employee decides to put in his or her papers.
4) Non profits face significant retention challenges
As the job markets improve, employee turnover rates are also increasing, with voluntary turnover rate touching 14%. This number. indicates the number of people resigning from their current positions on their own.
High turnover rates impact on organizational culture, institutional knowledge, processes, management and communication. As nonprofits grapple with retention challenges like inability to pay competitively and inability to promote, this kind of employee churn can have significant impact on the core mission.
5) Most nonprofits miss out on opportunities to promote from within
61% of senior and executive level vacancies in nonprofits are filled by people from other nonprofit. Only a measly 21% vacancies are filled by employees who are promoted. This imbalance has the potential of impacting staff morale and increasing attrition rates as people will hit a glass ceiling inside their own organizations and will look outside for career advancement.
Solving nonprofit hiring challenges
In the light of this data it is critical that nonprofits evolve a sustainable strategy to attract, hire and retain the best talent. In this context, if you are a nonprofit recruiter you have a big advantage over your colleagues at most for profit companies.
Most nonprofit hires are highly motivated by the mission of the organization when they join, compared to for profit hires who might have only money as the prime motivator.
- 16% of nonprofit workers say that they come to work for the paycheck. The corresponding number for for profit employees is 47%.
- Compared to 58% for profit employees, 75% nonprofit employees think that what they do is exciting.
- 67% nonprofit employees take pride in their mission, compared to 54% for profit employees.
Furthermore, research into workplace psychology has repeatedly shown, beyond a certain point money does not play a large role in motivating people to do their job.
...does money engage us? The most compelling answer to this question is a meta-analysis by Tim Judge and colleagues. The authors reviewed 120 years of research to synthesize the findings from 92 quantitative studies. The combined dataset included over 15,000 individuals and 115 correlation coefficients.
The results indicate that the association between salary and job satisfaction is very weak. The reported correlation (r = .14) indicates that there is less than 2% overlap between pay and job satisfaction levels. Furthermore, the correlation between pay and pay satisfaction was only marginally higher (r = .22 or 4.8% overlap), indicating that people’s satisfaction with their salary is mostly independent of their actual salary.
While nonprofits do have to grapple with the problem of insufficient resources, they can tap into this inherent goodwill and engagement among their employees to make sure they stick around for the long haul and contribute meaningfully to the mission of the organization.
Some actionable tips and strategies to hire the best employees are:
1) Management should devote a significant chunk of time on recruiting
This strategy is especially valid for organizations which are trying to scale. Such organizations need more and more people as they continue to grow. At the same time, attrition rates mean that a significant percentage of their workforce will leave every year. Assuming that an organization of 100 people with turnover rates of 20% need 20 people every year to maintain its momentum, it will have to hire 40 new people at the end of year one, and 84 new people at the end of year two.
Such growth rates can only be maintained if there is a fool proof strategy in place, which places emphasis on "warm" connections and references, so that new candidates can pre-qualify themselves.
2) Take time hiring at senior and mid level positions
With nonprofits, the senior and managerial level positions have disproportionate impact on the fortunes of an organizations. People in these positions are responsible for driving policy and execution. Even with oversight from a board, the wrong person at the wheel can spell disaster.
And even more importantly, it can take a long time for an organization to recover from a serious misstep or scandal that a wrong senior hire might trigger, given how important relations are in the nonprofit world.
3) Eschew multi functional job descriptions
Many nonprofits, dealing with resource crunch resort to advertising job descriptions that demand a disparate variety of skills, from managerial experience, to fund raising chops, to marketing and donor engagement.
But each of these roles are important, and it's unlikely that an employee can wear all these hats and function at high levels. The solution is to outsource some tasks, like social media to experts and let employees focus on a few related tasks.
4) Institute an effective onboarding program
An effective onboarding program is essential for retention. These programs increase productivity of new hires, are great at mapping job descriptions to personnel competency and work well at eliciting feedback about the job. Well managed onboarding programs keep employees engaged and motivated and also help increase year-on-year customer satisfaction by 63%.
5) Carry out a talent audit
Nonprofits should carry out a talent audit so that they can have an idea of whether there is enough internal talent that can meet the needs of the organization. This audit will be especially helpful when a senior position opens up, because promoting someone with the right skill sets is always preferable to hiring someone from the outside.
6) Create a documented hiring strategy
You should have a list of must-haves and nice-to-haves for every position in terms of skill sets. Set reasonable compensation packages, and also establish clarity on perks. Finally, decide how to conduct the search- newspapers, job boards, personal media etc.
It's also helpful to have a budget for recruitment.
What are your hiring challenges?
Envisio is a cloud-based strategy management and strategic human resource performance management software that helps SME's align their team to their strategic plan through an easy-to-use, intutive interface with robust reporting. With Envisio, you'll foster accountabilty and execute better.