Talent Practices Beyond Annual Salary Planning Part 2: How

May 8, 2024

Welcome back. If you haven’t already, please read part one of our series (link to that) that we published yesterday. As stated in part one, leaders are burdened with deciding what their payroll budget should be in their annual budget planning process. In actuality, they are burdened with what to do about attraction and retention of employees. Some of the landscape we discussed in part one included pay transparency, competition sentiment, low unemployment, and a talent shortage. In this second part of our series, we will give our recommendations around compensation practices and talent practices.

Compensation practices

A great starting point is to evaluate your pay ranges, especially for hot jobs, high-impact jobs, and high-volume jobs. Your ranges should be consistent with the market and aligned with your pay philosophy. Additionally, you want to take a hard look at internal equity. A best practice is to make all decisions regarding hiring, promotions, and general pay increases with an eye on internal equity. But in the hustle and bustle of business, not every decision we make fits neatly into the category of “perfectly equitable.” Considering the trend towards pay transparency, as evidenced by the eight states with current or pending legislation addressing that, you will want to get your house in order. Very likely, your staff will soon know how they compare to the published job pay range. Conversations will occur. And that is only half of it. Employees in nonprofits know they could be paid better elsewhere, but soon they will know how much better. 

Other areas to review are your pay philosophy, policies, and practices. As a non-profit, you can’t pay the highest in the market. But maybe how you pay could be more in line with your for-profit peers. Perhaps put a premium on hot jobs. In the last article, we  discussed that there will be a 70M shortage of tech workers in the next few years? 

Consider results-based rewarding outside of base pay. Studies have shown that employees feel a dopamine hit when they find out about their pay increase. That effect fades as they grow accustomed to the increase. One-time bonuses to reward exceptional performance will have the same one-time effect on the recipient as a pay increase. Bonuses for employee referral, sign-on, retention, exceptional performance, and project work are all options that should be considered that won’t impact your salary line. 

Talent practices

Unlike the Fortune 500, most non-profit organizations lack endless upward career mobility for employees. One way to give them growth is to offer lateral career opportunities. In cases where that isn’t an option, you can offer stretch projects outside of their current position. 

Without a doubt you need to lock down your employee value proposition (EVP). You are a mission-oriented company, but that can’t be the only reason people work there. Employees give you work, and in return you reciprocate with  a total rewards package(base pay, benefits, bonuses), paid time off, work flexibility, training & development, company mission, non-monetary recognition, workplace culture, overall employee experience, etc. Note there are a lot more things on that list than just base pay. This is your EVP. 

Get to know what your EVP is and what this is not. Lean into it and shout it from the rooftops. If your pay is low but your paid time off is high, let everyone know the latter. If your culture doesn’t allow for as much remote work as your competitors, but your employee development is top notch, highlight the development. This may sound like common sense, but not every leader really knows why people stay at your company. A way to find out is to ask your employees via engagement surveys, or better, focus groups. Your EVP will not be attractive to everyone. But once they join, they will stay longer than somebody who is misaligned. We are not making recommendations on what your EVP should be. EVPs are like your culture (or how you get work done) – it is what it is. You can change it over time but for now you are who you are, and you should lean into the positive aspects if you want to attract and retain the right people. Once you know what your EVP is, make sure that your employee experience is consistent with that. You might hear from employees that your managers are very accessible but nowhere in the recruitment and onboarding process is that the case. If you say your company is a certain way, you need to be consistent throughout your employee lifecycle. 

Good luck this year with your recruitment and retention. Think broadly and creatively and remember that you don’t necessarily have to pay more salary to improve your recruitment and retention of great talent. 

About the Authors

Michael F. Maciekowich is a National Director for Astron Solutions. His areas of expertise include the development, design, and implementation of executive, physician, and employee base pay, short and long term incentive programs, sales incentive programs and performance management systems in all industries. Michael has over forty years of consulting and industry compensation experience. Michael received bachelor’s degrees in political science and philosophy and a master’s degree in industrial relations from the Loyola University of Chicago. michaelm@astronsolutions.com 917-714-0317

Brady Young is the founder of Thrive Coaching and Consulting which provides fractional HR leadership to mid-sized businesses and talent consulting and coaching services to businesses of all sizes. Thrive focuses on the nonprofit and life sciences sectors. Contact brady@thrivecoachingconsulting.com for more information. 

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