Making Sure that Talent Management Works for Your Nonprofit

How much are your employees worth? And what would you do without them?

If you don’t know the answer to both of these questions, it might be time to take a look at how traditional job evaluations are giving way to salaries that are now based on market pricing and a little flexibility.

Turning away from traditional job evaluations that looked at job ranking, job classification, point factor, and factor comparison, many newer job evaluation tactics take into account the fact that people are more fluid in their careers and no longer care how their job is evaluated—so long as they’re being paid fairly. New salary determination methods also take into account that you should never pay more than the job is worth to you.

For nonprofits, especially those where employees give their all to change the status quo and to make a difference for your mission determining salary scales based on market pricing might not be a bad idea.

But nonprofit market pricing doesn’t always compare to the for-profit side where employees may have an easier time paying off their cars, homes, and bills, as well as enjoying that extra dinner out and more vacations.

When you’re ready to set salaries for your nonprofit staff, make sure that you (and Human Resources) know:

  • The upper limit of what each job is worth to your organization and how that compares to other companies in your area
  • What the lowest acceptable wage you could pay—for that job—in your market is

After determining those, it’s time to evaluate the pay structure of your nonprofit employees using a base job salary and base area salary.

Because more jobs are opening up in the for-profit sector—jobs that can often afford to pay employees higher salaries with better benefits and more stability—it’s important that you take into account more than just what job surveys suggest is a fair salary range. Consider questions that look at your employee’s health and happiness while doing this—i.e. would $1500 a month pay the rent or mortgage for your volunteer manager? Would they be able to afford their base bills too? Or would they be left commuting long hours because they couldn’t afford area rent? Do you know how that would affect your agency?

State economic development offices and regional development agencies can help provide up-to-date and accurate state and regional pay information that can then be broken down by skill level and neighborhoods. The U.S. Department of Labor maintains a similar database that can help you determine fair pay scales for your employees.

Your best resource is always other area nonprofits though. Although they might not cover the same mission that you do, other nonprofit employers can help you determine if your pay scale is fair. All you have to do is ask a few of the right questions!

Consider asking these questions in addition to those you think of on your own:

  • What type of industry do your employees work in?
  • What types of job titles do you have at your nonprofit?
  • How many employees work for your nonprofit?
  • What level of education or experience is required for your employees?
  • How long would you like a new employee to work for your organization?
  • How long do the majority of your employees stay with your nonprofit?
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11/07/12 5:12 PM

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