Tips For Non-profit Organizations Hiring New Executives & Staff

Negotiating the specifics of a salary is difficult enough for Fortune 500 companies. Unfortunately, it can be more challenging when you are running a nonprofit. There are quite a few additional variables in play. For example, the goal of most non-profits is to put as much funding as possible towards a specific cause, but at the same time, significant funding is needed to compensate quality employees. Where is the line drawn between the two? One of our specialties at the Recruiterie is helping nonprofits hire new employees.

You’ll find that many of the obstacles you face are the same as with any large company. That’s often because the candidates themselves use the same negotiating tactics as they would with a for-profit business. Negotiate in a way that is beneficial for the cause of your company, and that protects your company’s image, but without sacrificing the quality work needed to achieve your goal.

Understanding Their Market Value

Non-profit recruiter explaining benefits to new employeeEvery item that can be paid for has an underlying market value, whether it is known or not. When you shop for a car, you are steadily blasted with advertisements stating the vehicle’s market value. Determining the market value of a working human being is a bit more difficult. Luckily, most employees have taken the time to ascertain their market value before applying for a position.

Does that mean their assessment of their market value is correct? Not at all. But it does mean that they think that’s what they are worth. Therefore, whether it is correct or not, it’s going to be an essential factor to them during negotiations. As an employer, you’ll need to calculate your market value for each potential candidate. Ideally, your estimate of their value will correspond with the employee’s appraisal.  If you have a recruiting firm help you with hiring, they should be able to help you determine a market value as well as a good strategy for negotiating the salary.

There are three fundamental factors to consider when estimating a candidate’s market value. The first is the standard salary for workers in their position. The second is how much value they could add to your nonprofit. And the third is determined by your business. It includes employer related factors like the size of your non-profit, the salary provided to other existing employees, and the current success of the organization.

The market value of an employee is a great place to begin negotiations if it is within the target salary range of your non-profit. And don’t hesitate to make an offer even if your target salary range is below their market value. Many candidates are willing to take salaries below that value for any number of reasons.

Competing With Benefits

Many non-profits utilize large benefit packages to compete with for-profit companies in similar industries. There is a common myth that says nonprofits offer small wages with big benefits. That is not what you want to offer potential candidates. However, you can use significant benefits to make up for smaller salary gaps.

A non-profit can offer all of the same benefits that a standard for-profit company can. Some of the most common benefit packages include sick pay, medical insurance, retirement plans, vacation pay, and dental insurance.

One of the few benefits only available to private companies is stock options because not-for-profits own no shares. Your nonprofit may still offer something very similar to a traditional stock option benefit. For example, some non-profits offer their employees shares in mutual funds as a benefit. It’s a bit tricky to handle but is a great way to encourage candidates during negotiations.

Keep in mind that non-profits are still capable of offering many of the same incentives as for-profit companies. This includes payment incentives like annual bonuses. At the same time, such bonuses are closely watched by the IRS, as are employee salaries, so make each decision with care.

Handling The Counter Offer

One hurdle that is shared by non-profits and for-profits alike is the counter offer. At some point or another, you will offer the candidate a salary. They will then either accept, walk away, or propose a counteroffer. Many choose the counter offer route because they believe it’s a great way to add that extra dollar to their salary. And in many ways it is.

Woman candidate for a non-profit organizationPerhaps the best way to avoid counter offer struggles is to avoid low balling initially. Many candidates enter negotiations with the assumption that companies will low ball salary offers. That means their immediate response is to counter offer with a ten percent increase. If you avoid low balling, then you can rest assured that the final salary will be much closer to your original offer. It also saves time for everyone.

Always request information to support an increased counter offer. They may be worth the increase, but only if they have the data to support that claim. If they can’t justify the request, then they are likely to retreat when you request the information.

Salary negotiations for non-profits aren’t that different from your standard business. You’ll need to estimate the market value of candidates, offer benefits to cover salary gaps, and then firmly handle counter offers. If you follow those steps, then you’ll be able to hire qualified employees and still have enough funding to support your cause.  As mentioned above, a top recruiting agency can help with negotiations as well as finding the right candidate for your non-profit organization.


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