August 21, 2023

Talent Management Considerations for Nonprofits

By Laura White, PHR, SHRM-SCP, HR Director, Managed Human Resources Services

Talent Management Considerations for Nonprofits Nonprofit & Social Sector

Over the past couple of years, many nonprofits have experienced challenges attracting and retaining talent.

In a variety of nonprofit surveys conducted earlier this year, nonprofit leadership identified talent acquisition, performance management, and talent-focused technology as their top three priorities for 2023. For comparison, 2022 priorities focused on culture, learning and development, and performance management.

To help manage the priorities and ongoing challenges of talent acquisition, performance management, and talent-focused technology, we offer below four approaches that nonprofit organizations can take to strengthen their talent management efforts:

1. Retention – Focus on strategies to keep great talent

While recruiting and hiring new talent often becomes the focus for nonprofits, retention should not be overlooked. Given that it is difficult to find and attract experienced staff, once the organization does hire these highly talented performers, the focus should immediately turn to retaining them. Recent benchmarking data from the Society for Human Resources Management (SHRM) estimates the average cost to recruit an employee is $4,700. This amount does not include the average expense of benefits or “soft costs,” such as leaders’ and managers’ time invested in the hiring process or the costs to train new employees. In addition, turnover hurts productivity because it disrupts the flow of work. This can lead to emotional costs in the form of stress to remaining staff members, which could also cause them to consider leaving.

Focusing on areas such as fostering leadership and development and creating a positive, inclusive culture can greatly impact retention at an organization.

2. Competitive Pay & Branding

A solid compensation structure is a crucial element in retention and recruiting for nonprofits. The organization should be aware of industry competitive pay for their positions. We recommend benchmarking positions every three to four years, using internal staff or an outside consultant for a formal compensation benchmarking study.

Nonprofits should also ensure that their “brand” is a priority. What is the reputation of the organization, and what is the culture? Monitoring the organization’s reputation online can be very helpful to ensure that the nonprofit is showing up on social media as a place where people want to be. Being aware of how your employees experience your organization’s culture is an important step when actively investing in your culture.

Employees may be attracted to an organization’s mission, but an authentic culture and a positive work environment will keep them there.

3. Growth Opportunities and Feeling Valued

Outside of a competitive benefits package and competitive pay, employees place high importance on work-life balance, flexibility, and opportunities to learn and grow in their careers. Emphasizing employees’ career paths will help ensure employees have meaningful opportunities at your organization without seeking growth outside your organization. In addition, continuous performance feedback and open and honest communication with their managers make employees feel valued.

4. Technology – Investing in systems that support the staff

At the beginning of the pandemic, organizations had to pivot their resources to support remote work. This meant making adjustments, as well as investments, for communication and collaboration. As many nonprofits continue to operate in the hybrid space, with some remaining completely remote, continued investment in the technology to support these fully remote and hybrid work arrangements is essential. One way to do this is to automate HR systems and processes. Not only will this increase efficiency, but employees will appreciate the transparency and self-service features these systems offer.

In addition to investing in technology to make remote work and collaboration run smoothly, equally as important for nonprofits to focus on is how they can help employees and work teams build trust when people are not physically together as often. Such efforts can go a long way to helping retain valuable employees.

While nonprofits cannot predict future hiring trends, they can take concrete steps to strengthen their talent management efforts. Focusing those efforts equally on retention and recruiting will better position them to weather future hiring trends and become an employer of choice.