After a 29-year career in private industry, I had the opportunity to take a new position as senior vice president of human resources for a major non-profit in the U.S. I had no idea what to expect, although I always thought that non-profits operated in a different world, not affected by rapid business change or affected by the same challenges as private industry.
After 6 months of experience, I have learned that the non-profit world and its pressures to produce meaningful revenues are more challenging than the private sector. People who work in the industry have a passion to help others but frequently lack the business discipline and acumen to grow revenues and manage talent.
The economy has had a very negative impact on non-profit revenues, particularly in the Voluntary health area (non-profits that raise money to fight illnesses such as cancer,heart disease, diabetes, etc.) Companies that were once strong donors don’t have the funds to contribute. Individuals who once donated money have lost their jobs or they are saving more money to protect themselves if they lose their jobs, thereby reducing their contributions.
If non-profits are to reverse their revenue declines, effective talent management must be the top priority. We cannot reach our growth goals without the right people in the right jobs. It’s not enough that a person has a passion to help others ? it’s also important they know how to create strategic plans, engage their customers, volunteers and employees, and manage people well. This is especially true with employees who aren’t performing well. It’s imperative to establish clear, business goals and hold employees to specific performance results. A poor-performing employee can damage organization effectiveness, especially if that employee is managing others.
We have several ways we address the issue of improving talent management ?
Creating a clear, simple performance management system that’s easy to learn and apply, with specific metrics for measuring performance. In the past, performance management was very relaxed and had little impact on compensation.
Non-profits distributed ‘cost of living’ adjustments to be fair, with little variation between average and excellent performers.
Competition for talent has changed that approach. Merit increase budgets are smaller now due to the challenges of raising revenues, so money has to be distributed much more carefully. Performance evaluations must be easily understandable by employees so they understand why they receive either -0- or larger increases.
Employee benefits must also be rationalized. In the past, non-profits tended to provide more generous health and time-off policies to employees because their salaries and variable pay programs weren’t as competitive as private industry.
It was not uncommon for non-profits to pay for 90-100% of the cost of employee health insurance, along with generous contributions to retirement plans and generous paid-time off (as much as 8 weeks’ paid leave for new employees!)
Since health insurance costs are increasing 15% or more per year and headcount restrictions make it difficult to hire more staff, non-profits must find ways to change their employee contract to increase both employee productivity and cost-sharing as a way to reduce the employer’s share of raising costs. Non-profits also must find a way to redistribute service-related benefits to programs that recognize and reward the top performers to avoid turnover of the best talent. That will be difficult in a culture that has always rewarded service over performance.
My days are filled with variety ? from dealing with managers who have performance issues to recruiting top talent for key positions in our chapters to developing a new performance evaluation system. I have learned it is critical to use a collaborative approach to all program and policy changes. My experience in marketing and business management has been very useful in helping our Home Office and chapter executive directors develop strategic human resource and business plans to achieve their aggressive business goals.
The best aspect of working for a non-profit is the feeling of having a noble purpose in my work. Our organization funds research into cures for blood cancers and helps patients with disease information, financial help and new drug trial participation.
Every 4 minutes another person in North America is diagnosed with a blood cancer and every 10 minutes another person dies. We have substantially improved the odds of survival, particularly for children, and newly-discovered blood therapies for blood cancers have been used to successfully treat other cancers.
20 years from now, I am looking forward to reflecting on my non-profit career and thinking that I played a small part in giving patients and their families hope. That is the best dividend I could possibly want.