Compensating
Beyond Cash: How to Get Creative
By Dana
Levy, Koya Consulting LLC
When organizations contact us to fill a top executive
or development position, often the first piece of information they
want to discuss is the salary. As far as they are concerned, this is
the magic number that will decide whether the organization can find
a highly qualified candidate. As human-resource consultants to
nonprofits and social enterprises, we try to guide the conversation
to more substantive issues such as the skills or experience required
to do the job. However, the executive will remained fixated on the
salary.
Salary matters, but it is only one piece of a larger compensation
issue. Recently, in a series of interviews for a new client, we
heard several applicants say that they would be willing to take a
pay decrease. One said he believed so strongly in the organization's
mission that he would be willing to take a pay cut to work there.
Another told me she was currently commuting three hours a day and
would trade her higher salary for more convenience. Still another
said that since she would be relocating to a less expensive part of
the country, she could be flexible on salary.
These talented candidates reveal a unique opportunity for social
enterprises: They can be creative in structuring compensation to
attract high-quality employees. These examples illustrate several
trends.
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Flexibility
Any number of candidates would gladly consider a flexible schedule in
exchange for a lower salary. Some options include four 10-hour days, the
option of working from home one day a week, or working a school-day
schedule, such as 7:30 to 2:30.
Work-Life Balance
Another way to attract exceptional candidates is to offer incentives
that appeal to the person's larger life goals. For some, it may be
tuition reimbursement or professional development for others, a
part-time role. Talented candidates at various stages of their careers
may be interested in a position that is pro-rated 20- to 30-hours per
week. This way, the organization can benefit from the expertise of
someone it couldn't afford as a full-time employee.
Reputation
Nonprofit organizations often neglect one of their most valuable assets
when making a salary offer: the value of their brand. In 2001, Habitat
for Humanity’s brand was valued at $2.1 billion, roughly the same
valuation as that given to Starbucks. That is a pretty valuable asset
and one that the organization can use not just to seek funding or
sponsorship, but also to seek talent.
While brand valuation has always
been considered important in the marketing sphere, it also has a role to
play in internal operations. Hiring talented people is easier if your
organization is well known and highly regarded, be it locally or
internationally. Offering candidates a chance to be a part of something
special can greatly impact the salary required to attract the best
people. At nonprofits especially, but also at mission-driven
for-profits, there is a desire to be affiliated with a mission.
Organizations often forget that they offer something desirable beyond
financial compensation: an opportunity to be a part of something larger
than themselves.
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In order to take advantage of these non-financial incentives,
organizations need to be mindful throughout the hiring process. When in
the final rounds of interviews with candidates, ask questions relating
to their particular needs or desires. That way you can decide which
options to include in the offer. Then, when it comes time to negotiate,
be aware of how you are pitching the final offer. Rather than leading
with a salary number, try making the offer as a total compensation
package that includes all pieces. Go over the benefits package,
highlighting what percent is paid by the organization, give the salary,
then tell the candidate that you want to go over the more flexible and
unusual benefits, such as telecommuting or flex-scheduling. By showing
the candidate the whole package rather than fixating on the salary, the
organization can highlight that compensation is more that just money.
This non-financial compensation can play an important role not just in
hiring but also in retention. Be aware that it may be valuable to hold
some benefits back as a non-monetary promotion at a later date.
One caveat: Nonprofit leaders need to be mindful of parity within the
organization: Existing employees should not feel that new hires are
given more benefits than they are.
So what does this mean to the average, fiscally tight organization? It
means that the best place to start is not always the bottom line.
Whether working with a search firm or not, it is important to start the
search process thinking about the qualities you most need and the myriad
ways you can attract the best candidates. When you think creatively, you
might find that you have more to offer than you think.
 Koya Consulting LLC focuses on finding and retaining excellent people in
the nonprofit sector. Dana Levy and Katie Bouton have diverse experience
in human resources, recruiting and organizational strategy. They can be
reached at dlevy@koyaconsulting.com or kbouton@koyaconsulting.com. Find
out more at www.koyaconsulting.com.
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