What kind of recruitment incentives or ‘difficult to fill’ incentives are appropriate for a nonprofit organization to offer to potential employees? We have two positions where thorough targeted recruitment has not resulted in actual hires. Money is the issue; we are hesitant to move the positions out of their appropriate band without a definitive policy in place.

Here’s a situation that all organizations – for-profit, not-for-profit, private sector, public sector, etc. – are facing and will face more and more. Salaries for talented people are moving up as the talent shortage starts to bite. Pay rates that were competitive yesterday are insufficient today.

The law of supply and demand is still in place. Talent is in increasingly short supply, and commands higher salaries as a result.

Organizations that rely on donations and/or government funding are in a particularly sensitive position. Nobody wants to be the subject of a MEDIA EXPOSÉ that accuses them of having bloated administrative costs. And employees and board members of not-for-profits almost always have a well placed sense of responsibility around ensuring that money goes to the intended recipients, rather than to administration, by a wide margin.

Yet there’s no denying the shift in the job market. It’s harder and harder to find talent, never mind afford it.

In my opinion, since this is a continent-wide job market change, organizations need to revisit their salary plans and their hiring practices. In other words, they need to adjust to changing market conditions. The move to a seller’s job market (fewer job seekers than jobs) compels all of us to change to meet the market shift. No organization is insulated from this.

This can be challenging for charities and nonprofits. After all, a major reason for their existence is to provide services to people who need to be protected from the negative forces of change. However, we mustn’t let this reality lull us into believing that because our clients need this protection, that our organizations need some sort of vaccination against market forces. There is one single job market. To be sure, there are sectoral job markets segmented by geography and profession. But they function within the broadly-based seller’s job market that is now upon us. And because there is only one job market, all organizations are competing in it for talent, like it or not.

Now is the time for managers to elevate this issue to their boards. Management has a responsibility to educate directors about the job market changes, because boards will, at the very least, have to ratify changes to salary structures and hiring practices. Directors will also be called upon to explain to stakeholders why salary costs are increasing (if that’s what they decide to do). This may be challenging in the case of directors, who may not feel that money should play such a role with people who want to work in the nonprofit sector. But, I repeat, when there’s profound change in the external environment, organizations must respond with changes of their own.

So to answer our subscriber’s issue directly, I agree that changes to salary plans and hiring practices require policy underpinning so that staff can feel confident that as they change their practices they’re doing the right thing from the board’s point of view.

The question above also refers to ‘incentives’. Presumably what’s meant here is the application of ‘signing bonuses’. This kind of incentive allows organizations to bring the right person in the door with a one-time cash payment, while leaving the salary range where it is. (A caveat: from the candidate’s perspective, signing bonuses look very attractive at the time they’re awarded, but their value as motivators wears off fast.)

There’s nothing stopping us from thinking outside the box here. If we’re looking to hire an outstanding individual, we might find out what his/her career aspirations are, and see if there’s some way to help with these. Can we pay for formal education instead of pushing a salary up?

Other forms of incentive are available too. Let’s take working conditions. We might say to a talented candidate that the salary for the position is what it is, but we can talk about certain flexibilities in how, where, and when work gets done. How about family circumstances? Is there financial help that we can offer to help the employee deal with a particular family reality?

I’ll throw in one more bit of food for thought. If we want to control our administrative costs, do we ask an average employee to take this on, or a talented one? If we want to increase our ‘share of wallet’ among donors, do we assign this to an average employee, or a talented one? If we want to negotiate shared cost arrangements with other organizations, do we turn this over to an average employee, or a talented one? What I’m getting at here is that if we want good performances we need to pay for them. Sure, there are bargains to be had, but as with any bargains, they’re few and far between.

The times, they are a-changin’. Organizations need to move with changing times, or be left behind.

To submit a question for a future column, or to comment on a previous one, please contact editor@charityvillage.com. No identifying information will appear in this column. For paid professional advice about an urgent or complex situation, contact Tim directly.

Tim Rutledge, Ph.D., is a veteran human resources consultant and publisher of Mattanie Press. You can contact him at tim_rutledge@sympatico.ca or visit www.gettingengaged.ca.

Disclaimer: Advice and recommendations are based on limited information provided and should be used as a guideline only. Neither the author nor CharityVillage.com make any warranty, express or implied, or assume any legal liability for accuracy, completeness, or usefulness of any information provided in whole or in part within this article.