How do you properly value an employee? Or their contributions, not just in terms of the money they raise for an organization, but also their passion, energy, and ideas? In terms of their contribution to the organization’s culture and ability to deliver on its mission?
If you are a candidate, what value do you put on the investment of your time, energy, and passion? What value do you ascribe to your work contributions? What offer of value will not only cause you to join an organization but also motivate you to stay and help you thrive?
Too often, when it comes to the world of retention, hiring, and recruitment, the proxy for a person’s value is money. But we believe that approach is not just unproductive; it is in many ways counter-productive.
At Aspen Leadership Group, we know from conversations with candidates that most seek far more than just money. But they often focus on money because other elements of Value are missing from the conversation. Likewise, hiring organizations that focus too much on salary lose out on “soft” elements of Value that can help them not just attract new talent, but also retain existing talent while managing the challenge of rising costs.
So how do we do better? By focusing on all elements of Value and making all of them part of the equation.
Rethinking Three Key Elements of Value
In the nonprofit sector, Value is driven by three key elements: mission alignment, Inclusion, and money. The first two are “soft” elements of Value, not as easily measured as money.
With respect to mission alignment, nonprofits enjoy the kind of double-bottom-line that’s hard to come by in the for-profit corporate world. Staff commitment is driven in large part by a passion for the organization and its mission. For that reason, nonprofits have historically been able to pay lower scales than the for-profit sector. Doing work that’s personally meaningful is, to some degree, part of the compensation. When we go to work in the nonprofit sector, we know this, and it’s something that we willingly embrace.
Likewise, part of the nonprofit Value equation is having a concrete sense that we are making a difference. But as The Great Rethink has explored over the past four months, in our Inclusion module, that means people at all levels expect to contribute. They want to be listened to. They want to participate. They want to feel valuable and valued for their contributions. It’s not enough to be part of an organization; employees want to know that their work matters. That kind of Inclusion – a true culture of Inclusion – is something nonprofits often struggle with. And it’s one of the key reasons candidates cite for leaving their previous roles: they were overlooked and under-appreciated, which translates to “undervalued.”
During and after the pandemic, we saw candidates rethinking these non-monetary pieces of the Value equation. They have been asking themselves: Do I feel valued, valuable, and recognized? And climbing the ladder has become less and less satisfying. We often hear something along the lines of: “In chasing the title and career path, I got away from the mission, and I miss it.”
In their telling, a bigger paycheck may make the loss of mission, or falling short of feeling valued, seem tolerable in the short term. Money can get people to stay, or get new people to join. But over time that paycheck has to work ever harder to make up the shortfall on the softer side of the equation. Ultimately, it also saps the organization and its staff of the thing that we all need, want, and value in nonprofit work: a sense of mission and purpose.
Imbalance: The New Dynamics of Supply & Demand
One key driver of increasing salaries is a sudden imbalance of supply and demand in the nonprofit workforce, particularly in advancement work. And on this topic, it’s difficult to overstate the impact of hybrid/remote work models on the market for talent: we have seen hybrid and remote postings go from a small percentage of remote positions to almost half of listed positions over the past few years.
What impact has that had? It used to be that advancement work was highly localized and relied, in a sense, on a “captive workforce” that had few alternatives. In any given metro area, there might be a few major colleges and universities, or a few major classical arts organizations or museums, or a few key health care and social service providers. If you are a manager in a university, perhaps your advancement staff members were spouses of faculty and couldn’t relocate for a new job, for example. Local options for in-person advancement work have traditionally been limited, as have the possibilities of changing locales.
But today, if you are a major nonprofit with talented staff, instead of a handful of organizations trying to recruit your staff, you are competing with dozens, if not hundreds of potential employers trying to peel away your top talent with offers of remote and hybrid work, as well as potentially more money. If you’re a talented fundraiser, you have vastly more opportunities than you had just a few years ago. And where you used to be limited to comparing salaries locally, now you can justifiably compare salaries nationally – an easier proposition now that many states are passing laws requiring salaries to be posted publicly for open positions.
These new dynamics are creating pressure for nonprofits to increase salaries for existing staff as well as pay new staff members higher salaries to compete in a rising market. But few nonprofits can afford to adjust their entire staff cost upward quickly as they are forced to adjust to a radically different competitive marketplace in hiring.
Managing retention and hiring in a world of rising salaries and high competition is very challenging indeed – especially if the only negotiating point you have to fall back on is the money.
Restoring Balance: Recognizing The Intangible Aspects of Value
As the advancement profession rethinks its approach to Value, the first thing to recognize is that these issues affect every organization: supply and demand, new opportunities for remote/hybrid work, equitable pay and tension with existing pay scales, limitations on expanding revenue streams (e.g., tuition, fundraising, healthcare charges). Every organization is squeezed by higher costs and budgetary constraints. In short, all organizations are struggling with the third aspect of Value: money.
But the profession has other ways of communicating and recognizing Value, for job seekers and current staff alike: ways that don’t replace financial remuneration but are often just as meaningful in hiring and retention. Organizational culture has value. Mission alignment has value. Professional development has value. Engagement has value. Impact has value.
To those of us who spend our careers in nonprofit work, these other elements of the Value equation are of enormous significance. If your people feel valuable and valued—i.e., they’re making a difference through their mission and impact—it will take a lot more money for a competitor to peel them away.
Furthermore, transparency is key to all retention efforts. Staff members will be more patient with temporary inequities in money if they feel valued and if they understand financial challenges, are engaged in addressing them, and know that leaders are committed to achieving equity. But if they do not already feel valued in “soft” ways, or if you break their trust, leaving them in the dark about financial challenges and plans to address them, no amount of money will get them to stay.
With respect to hiring, job seekers focus on salary because the “soft” elements of an organization are to a large extent unknown and unknowable. But hiring organizations can change that calculus by being clear about mission, vision, strategy, and culture. When you hire for mission alignment, for example, new employees see Value in being part of your organization. If hiring lacks that alignment – with a narrow focus on title and/or salary – it will cost more to bring people in and keep them. If, once they are on board, you don’t include them, the same will be true. Eventually, in our experience, you can’t pay people enough to make up for the lack of mission alignment and Inclusion.
So in the interview process, hiring organizations should take the opportunity to communicate to the candidate how their internal culture creates Value. If you have retention or professional development stories to tell, engage current staff to help tell them. Helping candidates demystify the unknowable pieces of the Value equation can help them make a fully informed decision about the organization and the role, as well as take some pressure off the financial aspect of Value. My colleagues and I have seen many candidates accept lower salaries because they wanted to be part of a specific organization and culture, especially when moving from environments in which they were not included.
I often say that on Day One, money might be enough. On Day Two, it will begin to stop being enough. The “more money” solution to retention has a short shelf life, maybe a year, or a month, sometimes even less. Hiring managers need to offer equitable pay and be transparent about the financial aspects of compensation. But to cement a long, productive, and fulfilling relationship, both candidates and hiring organizations must pay careful attention to all the many aspects of Value that make nonprofit work a fulfilling career.
Curious to learn more? Read the next article in our series here.
Ron Schiller, Co-Founder, Aspen Leadership Group