Strategic Planning Should Cover Staffing Levels and Compensation

In the past, I’ve written articles about “compulsory volunteering,” overtime regulations, high turnover rates, and inappropriate compensation levels in the nonprofit sector. I gave those articles a gander to see how far we have come in addressing the independent sector’s staffing shortcomings in the past nine years. The answer? Not as far as we should have. But there is no better time than now to start improving. 

People in roles such as executive directors, CEOs and boards of directors can change organizational strategy and policy. It is up to you to ensure your organization treats staff like the valuable assets they are. Kudos if you’re already accomplishing it. If your organization struggles with this, here are a few things to consider.

Evaluate Your Actions

I work with nonprofits on strategic planning and evaluations of governance and fundraising practices. A few topics that come up repeatedly are: 

1. high staff turnover rates 
2. low employee morale 
3. the desire to increase types of services delivered
4. the compulsion to expand service area territory
5. the need/want for new facilities. 

Most boards of directors tend to immediately zero in on No. 3 to No. 5 — those items with the highest profile. I challenge organizations to address No. 1 and No. 2 before considering the rest. If turnover is high, positions are consistently unfilled and employee morale is forever low. Don’t just accept it as the unavoidable norm — work to get your house in order. 

Here are a few things to consider when determining if your organization’s human resources situation needs attention. 

1. Staffing Analysis

Has the organization conducted a workflow and staffing analysis (since the pandemic) to determine what the optimal number of employees, with what specific credentials and at good pay rates would be in every department/position if the agency were to run at top form? I’m not talking about how many staff you need to stay afloat. I’m talking about who and what is needed to be great. If not, now is a good time to conduct one. 

Then, evaluate how your current staffing and compensation situation compares to the human resources needs analysis you just conducted. If they match, you are doing a stellar job. If they don’t, addressing that gap is an opportunity to live up to your organizational values.

2. Pay Disparity

Is there a significant disparity between market rates paid to your executive staff and the rates paid to your program delivery staff? If the executives are compensated well but service delivery staff uniformly have to work a second job to pay their bills, or the number of employees that qualify for Supplemental Nutrition Assistance Program (SNAP) is unreasonably high, you may have some thinking to do about the fairness of your pay practices. 

3. Benefits

Do your employees have medical insurance and the opportunity to have a 401(k) or a 403(b)? If the answer is no, the organization is doing a disservice to its staff. This compensation shouldn’t be a luxury or something that is automatically on the chopping block in lean years. 

If you thought, “We have the AFLAC representative come in every year”, consider doing more. Offering only the chance for employees to purchase supplemental insurance isn’t a fabulous perk. It is tantamount to anticipating that they won’t be able to cover medical costs with what you are currently paying them or how they are insured through your nonprofit. 

4. Overtime Rates

Does your organization pay appropriate overtime rates to hourly employees? Do you expect hourly staff to volunteer their time outside of office hours — a practice some call “compulsory volunteering”? The IRS is not a big fan of this behavior, and it won’t endear you to your employees.

If your organization is lobbying (or advocating) against paying overtime, consider why. Is it because you don’t have enough budget to pay appropriately? If so, it is time to consider your budgeting strategy and whether consistent budget shortfalls result in inadvertent exploitation of your employees. 

5. Salary Transparency

Do you have salary transparency across the agency? This is one area where the sector has gained positive momentum. Posting positions with not only the qualifications required, but with a reasonable salary range as well leads to better pay equity. It can be sticky to transition to this model, but once you are there you’ll become known for fair employment practices.

Change Your Strategy for Good

Now let’s talk about organizational strategy. If any of these items gave you pause, it is probably the right juncture to have a chat with leadership about it. The board of directors is charged with making good decisions on behalf of the organization. Shouldn’t those good decisions include delivering the best services possible by having the appropriate staff who are paid a solid wage? 

Notice I didn’t say “living wage.” Some organizations consider a “living wage” as anything above the poverty level. Did you know that the equation for determining the poverty level in the U.S. was developed in 1964 and considers only the ability to pay for food as its benchmark? Seriously. It doesn’t take into account being able to afford rent or a mortgage, transportation, or health insurance. People living at the poverty level may be able to afford to eat, but little else. Conversely, less financially stressed, healthier people tend to make much better employees.

If nonprofits in the social sector are considered society’s safety net that is there to help those with the most need and the least amount of resources, then compensating employees at a level that puts them on that list of people in need is seriously counterproductive.

I challenge organizations that are trying to build the best present and future possible to use some of their strategic planning efforts to address any shortfalls in human resources that I described. After that, talk about expanding territory or building new buildings. 

The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.