Our Perspective

Talented managers in the nonprofit sector are in short supply – or so they tell me. Yet I talk daily to people with excellent qualities, abilities and education who are interested in nonprofit careers.

What’s really going on here?

On the one hand, the demand for well-qualified professionals who can come into an organization and produce results quickly has exploded. So has the complexity of issues facing charity fundraisers in the last decade. The stunning growth of organizations such as the Canadian Association of Gift Planners and the Association of Fundraising Professionals reflects the demand for increased knowledge and professionalism in the sector. As charities and other nonprofits mature and grow, their increasingly ambitious fundraising targets and the public’s escalating demand for transparency are fueling a push for a higher calibre of managerial talent.

On the other hand, a whole new stream of young – and not-so-young – talent is choosing to work in the nonprofit sector, either as a first-choice career or following stints in the for-profit arena. At the same time, retention has developed as an issue, with our best and brightest seemingly ready to switch jobs the way they switch restaurants. And, as the shift in importance from financial to intellectual capital in the marketplace is reflected in civil society, would-be recruits are increasingly calling the shots: where they’re willing to work, what perks they’re seeking, their salary expectations, the desire for instant status and platinum parachutes.

Nonprofits that have a plan to attract, develop and retain top talent will see a dramatic boost in organizational performance. In fact, this is the key challenge facing any nonprofit manager: strengthen your organization’s talent pool dramatically to meet current and future demands… or wither, become irrelevant, cease to be a ‘player’.

Most nonprofits have developed vision and mission statements. They have dragged their boards off to strategic planning sessions. They have discussed budgets ad nauseam. But many don’t know how to attract, grow and nurture the golden ‘boys’ and ‘girls’ who will bring them success.

Position your organization to attract talent

Ed Michaels, Helen Handfield-Jones and Beth Axelrod, authors of The War for Talent (Harvard Business School Press), recently surveyed 13,000 managers and identified five imperatives that companies need to act on to win the war for managerial talent.

1. Embrace a ‘talent mindset.’

To deliver the best services, raise more money and more effectively fulfill your community role, you have to set the tone at the top. Make all the leaders of your organization part of the talent sourcing, recruiting and engaging process. And remember that the process never stops. Always be on the lookout for talented people and always be ready to incorporate them into the organization, not just when you have a vacant position to fill.

2. Craft a winning employee value proposition.

According to McKinsey & Company’s “War for Talent 2000 Survey,” the critical items that middle and senior managers look for when deciding whether to join a for-profit and/or nonprofit appear to be identical.

These are:

• interesting, challenging work;
• work they feel passionate about;
• career advancement opportunities;
• long-term commitment by the organization;
• ability to build skills to boost their careers;
• commitment by senior mangers;
• promotion of high performers;
• a well-managed company/organization;
• good relations with the boss;
• culture and values that they believe in;
• trust of senior management;
• a boss they admire; and
• compensation commensurate with ability/market.

Countless hours are often put into mission and vision statements, but most organizations have not crafted a winning employee value proposition. This should express the sum of everything people experience in your organization: environment, leadership, compensation, training and development plans. In short, it’s a statement of how your nonprofit meets people’s needs and expectations and even helps them fulfil their dreams. It should answer the question, “Why would anyone want to work here?”

3. Rebuild your recruitment strategy.

Does your organization really hunt for talented people? You may need to re-examine your past recruiting patterns in the current war for talent. For example, smart organizations see a “slow economy” as an opportunity to capture top-notch talent that, at other times, may be more elusive. It used to be that when you needed to fill a position, you developed a specific job description and then went looking. Now, however, you should be constantly seeking excellent people and hiring when they become available. What if the position they will eventually fill is not open? Try giving them a special project. At first glance, this may not appear feasible, given most nonprofits’ tight budgets. But talented people can often be hired on a contractual basis so that you can assess their work and they can get to know the organization.

And remember, recruitment is no longer the exclusive sphere of the human resources department. It’s now everyone’s job. Ask those already working for your nonprofit to scout potential employees at conferences, courses and association meetings.

4. Integrate staff development into your organizational plan.

Today, you must not only be recruiting all the time, but you must also learn to sell your organization to attract the best candidates. One way to do this is through staff development.

Citing lack of budget and time, many nonprofits do next to nothing to develop their employees. Yet one of the key questions candidates ask recruiters is about training and advancement opportunities. And many talented managers leave positions if the feel they are not growing.

To attract and retain top-notch people, nonprofits should take a page from their corporate cousins, who have devised innovative ways to offer top performers more challenging opportunities and have developed coaching and mentoring systems. There probably wouldn’t be so much movement in the nonprofit world if managers took more time to mentor employees.

There are two elements to this: 1) training senior managers to coach and mentor effectively, give candid feedback and coach staff on their strengths and weaknesses; and, 2) allocating enough funds to staff development so that employees at all levels can take courses. This will also help to address a common failing: the placement of candidates in senior staff positions without ensuring they have mastered the basics – finance, operations, marketing and human resources.

5. Differentiate and affirm your people.

Who is really doing a top-notch job in your organization? What does your performance contract look like for individual managers and teams? How do you know who your high and low performers are? When was the last time you conducted candid, written performance reviews? How do you reward – really reward – your top performers?

Many nonprofit organizations prefer to see themselves as egalitarian and non-judgmental. But only if you differentiate employees and identify top performers can you take steps to retain and develop these gems. You should also be seeking out, assisting and developing second-level performers so that they can reach their potential, and acting decisively on the lowest performers. Jack Welch, retired CEO of General Electric, noted that it is a kindness to help those who are non-performers leave the company and find situations where their talents can flourish.

What top candidates want

To be competitive in the job market, your organization must be attractive to candidates. A number of recent surveys confirm that when scouting opportunities, top candidates are most interested in what they will be doing on the job. Therefore, half of any job advertisement you place should focus on what you want the candidate to accomplish. If you add a compelling growth path and a little information on the organization’s culture, you will have an attractive opportunity.

According to McKinsey & Company’s “War for Talent 2000 Survey,” candidates are looking for:

Exciting work
Interesting, challenging work . . . . . . . . . . . . . . . . . . . . . 59%
Work I feel passionate about. . . . . . . . . . . . . . . . . . . . . . 45%
I am listened to and can impact decisions. . . . . . . . . . . 41%
Take, initiate, and own success . . . . . . . . . .. . . . . . . . . . 40%
Have impact in the company . . . . . . . . . . . . . . . . . . . . . .35%

Development
Career advancement opportunities . . . . . . . . . . . . . . . . 37%
Long-term commitment to me . . . . . . . . . . . . . . . . . . . . 35%
Build skills to boost career. . . . . . . . . . . . . . . . . . . . . . . . 35%
Senior managers committed to me. . . . . . . . . . . . . . . . . 30%
High performers promoted . . . . . . . . . . . . . . . . . . . . . . . 28%

Lifestyle
Can meet my personal/family commitments . . . . . . . . 51%
Live in appealing city/region . . . . . . . . . . . . . . . . . . . . . 34%

Great company
Company is well-managed . . . . . . . . . . . . . . . . . . . . . . . 48%
Good relations with my boss . . . . . . . . . . . . . . . . . . . . . 43%
I like the culture and values . . . . . . . . . . . . . . . . . . . . . . 39%
I trust senior management . . . . . . . . . . . . . . . . . . . . . . . 38%

Wealth and rewards
Recognized, rewarded for my contribution . . . . . . . . . 39%
High performers paid more . . . . . . . . . . . . . . . . . . . . . . 31%
Substantial wealth creation opportunity. . . . . . . . . . . . 36%

Think through how your organization meets these expectations. Use this information to craft an advertisement that will attract the best candidates.

Welcoming mindset

Once you’ve embraced the “talent mindset” and developed and advertised an attractive position description, you must prepare to welcome candidates. Typically, candidates have to hunt for information about organizations and arrive at interviews with, at best, a sketchy understanding of the organization’s real needs. This “blind date” approach – telling the candidates what they need to know about the organization at the interview – fumbles a crucial screening opportunity. If you make information available before the interview, and if the candidate appears not to have reviewed it, this signals that they probably won’t make a good addition to your team. If the candidate makes good use during the interview of the information you have provided, they will likely make excellent use of other tools your department provides once they are on the job.

Some non-confidential information you can and should share in advance of the interview includes:

• your vision and mission
• a five-year strategic plan
• the problems and challenges facing the department
• trends or issues facing your organization
• a description of the organization’s ‘culture’
• a description of the competition
• annual reports from the past three years
• an organization chart
• the names and telephone numbers of members of your staff
• a job description, with the key competencies outlined
• an employee value proposition

Prepare your interview so that, throughout, you demonstrate a sincere corporate commitment to the value of the individual. This is important because candidates often talk to one another and, just like a bad date, the word will spread if you treat candidates badly.

Receiving the candidate

Before seeing candidates, take these preparatory steps:

• Ensure that the receptionist knows that candidates are expected, what the interview process will be, and where the interview will take place.
• Don’t keep candidates waiting.
• Have the hiring manager welcome candidates.
• Show candidates the same consideration you would show any guest: let them know they are expected; take their overcoats, hats and boots; show them to a chair; offer them something to drink; tell them where the washrooms are.

Preparing the selection committee and planning the interview

• Keep the selection committee to a manageable number. Remember that this is not an inquisition.
• Prepare all documents for the committee to review a few days in advance: the resume, job description, advertisement, the questions that will be asked, a weighted scoring sheet and instructions on how the meeting will be conducted.
• Before interviewing candidates, the committee chair should review with the committee how the interview will be conducted, who will ask which questions, and how the information will be reviewed at the end of the interview.
• Leave significant time in the interview for the candidate to ask questions.

Developing a streamlined hiring process

• Have prior approvals for the salary range – even the outside limit in the event you want to quickly make an offer to a sterling candidate.
• Know in advance who will interview the finalist candidates.
• Have team members understand the importance of setting aside time to see candidates promptly.
• Have the hiring manager conduct the reference checks. Peers are more likely to be open and blunt with one another.

Decision schedule 

• Be able to tell candidates when you will be making a decision.
• Ensure you can make a swift decision if necessary. Organizations can lose good candidates if they drag their feet. Remember that the best candidates will have other offers.
• Notify all candidates promptly of the hiring decision. There are many slips in the hiring process, and often the second or third choice candidate can become your first choice.

The natural selection process is at work in the nonprofit sector as never before. How well you recruit will be the key too much of your nonprofit’s medium-term viability and long-term success. As the ruthless competition for excellent managers heats up, your ability to successfully seek out and hire the best will determine your ultimate status as one of the leading ‘players’ in your sector, or as an ‘also-ran’.