TALENT MANAGEMENT IN THE

NONPROFIT SECTOR A discussion paper based on Verity’s First Quarter, 2013 Bridge2Success Executive Breakfast Forum

By Colleen Fleming, Forum Moderator and

Managing Director, Bridge2Success Verity International Limited

TALENT MANAGEMENT IN THE NONPROFIT SECTOR

An introduction

In today’s competitive marketplace, nonprofit organizations and their

boards look to attract and retain first class talent, and while the sector

faces a variety of challenges in managing this talent, it is also seeing

many successes.

On February 28, 2013, a group of senior nonprofit executives came

together to discuss the challenges, opportunities and successes

surrounding talent management in the nonprofit sector today.

One of the greatest challenges to talent management in the sector, as

recognized by the group, lies with the historical barriers towards

investing in staff. In many cases they admitted to feeling the pressure to

improve the performance of their respective organization, but that they

were also caught skirting around the constraints within the sector.

Throughout the session the executives sought to identify solutions and

tactics that they could adopt in support of their work.

This discussion paper is the second in a series we plan to release, which

will address issues that are currently keeping executives and influencers

of the nonprofit sector up at night. We hope that in reading this paper

that you will gain a better understanding of the challenges within the

sector and that you become better equipped in managing them.

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Contents

Talent Management in the Nonprofit Sector: An introduction 2

Historical Roots: The Lack of Talent Management Investment 3

Take Away Tips to Adopt 4

Implementation Tips 5

Summary 5

Bridge2Success 6

About Verity 7

Historical roots: The lack of Talent Management investment

The first topic of discussion was a reflection on the history of the lack of investment in

talent management in the sector. Participants sought to understand the underlying

drivers as a first step to managing change and influencing stakeholders in the direction

of supporting it.

"A strong and commendable historical ethos" of focusing spending on the short term

and on the mission of the organization was observed by Ene Underwood. The issue of

this ethos is one of the key historical underpinnings of the hesitancy to invest in staff

training over direct client services and is a matter to which all participants resoundingly

identified with. Compounding this is the fact that the culture has been even further

entrenched by tight budgets and the CRA ratios.

The public and many nonprofit boards of directors sometimes guide their decision

making by financial indicators suggested by CRA and/or emerging organizations that

provide comparative criteria particularly in the area of fundraising and administrative

activities. The intention of providing parameters is a worthy initiative but some critics

claim numeric guidelines are too simplistic to be meaningful in comparing

organizations with very different circumstances. Similarly, this approach also leads to

short term thinking.

Joanne Doyle captured the boards' sensitivity to public backlash by asking "How would

it look?” She further described the importance of continuing to push for understanding

regarding the balance between efficiency and impact. The executives and boards are

aware that the general public is time pressed and will frequently revert to the quick

ratios to guide their donations and will not take the time to read a fulsome business

case for Talent Management. Thus the sensitivity can dominate decision making and

needs to be balanced with a narrative about what impact the sector is having. Recent

media and public attention to what are viewed as "spending scandals" of publicly

funded and charitably funded nonprofits have further heightened the level of caution

regarding non-client spending.

Janet Yale noted that a public education campaign is also required to overturn the

"charity mentality" that dictates wages in the nonprofit sector. Historically nonprofits

were staffed by volunteers and funds were raised within the local community. That

model is steadily becoming a thing of the past as nonprofits are developing into

national or international organizations which compete for professional career

orientated staff and donors’ dollars.

Georgina Kossivas observed that there is a wide held belief that because nonprofit

enterprises "contribute to the public good" it would be unseemly to offer wages that

weren't significantly discounted.

The impact of low wages and the lack of talent management investment ultimately

leads to high turnover which in turn lowers productivity and increases risk within the

sector – none of which contribute to the mandate of the nonprofit enterprise.

Lee Giles emphasized that the key component of the business case for talent

management is the enterprise risk nonprofits face due to untrained staff and high staff

turnover.

Bridge2Success Executive

Breakfast Forum

February 28, 2013

Our Participants

Joanne Doyle, Senior Vice President, Community Impact, United Way Toronto

Lee Giles, Former Executive Director Sheena’s Place, and Altruvest Charitable & Board Match programs

Georgina Kossivas, Bursar and CFO University of St. Michael’s, University of Toronto

Ene Underwood, CEO Habitat for Humanity Toronto

Janet Yale, President and CEO The Arthritis Society

Hosts

Colleen Fleming, Forum Moderator Managing Director, Bridge2Success Verity International Limited

Jeff Welton Managing Director, Verity International Limited

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Some voluntary board members perpetuate the charity mentality because they are

not paid for their contribution to the enterprise. Of course volunteering on the board

is not a source of income nor is it a full time activity. The participants were not

advocating for equity to private sector wages but were advocating for talent

management investment for staff who were identified as integral to the long term

success of the enterprise. Participants want to recognize the trailblazers who have

already adopted a more progressive attitude with regards to investing in their people

as a means to achieve the business plans and lower risk and liability.

The take-away tips to adopt

Participants confirmed that due to resource limitations, nonprofit enterprises

typically do not employ fulltime human resources executives as part of their staff

compliment. However, the participants questioned who better to help support

the business case for talent management. As an outcome of the candid

discussion, one of the participants plans to include senior level human resources

skills as part of the skills matrix for the board on a go-forward basis.

The participants also looked forward to ensuring that their boards are fully

cognizant of the risks an undeveloped staff can create when working with a

sophisticated donor community which wants assurance that their money is well

spent. The rapidly changing regulatory environment and a sophisticated public

demanding transparency are also key reasons to invest in talent as it will lower

the enterprise risk.

By this point in the discussion the B2S Breakfast Forum group had much to

ponder and proceeded to turn their attention to the business processes required

to articulate an aligned Talent Management Strategy. It was agreed that ideally a

visionary strategic plan would be approved by the board and out of this

fundamental document the staff would produce a business plan.

The development of a three year strategic human resource plan would align the

people strategy to the strategic and business plans. One participant shared that

their strategic human resources plan graphs the talent of the organization on two

axis — current performance and potential performance. Jeff Welton helped the

group delve into this idea further by outlining a people plan he was familiar with

and which was based upon the 3C's; capacity, capability and culture.

Furthermore, another participant’s organization had adapted the Executive

Talent Management Framework developed by the Treasury Board of Canada

Secretariat with great success.

Many nonprofits have a scale issue and this forces them to go outside for talent.

In addition to the scale issue, in some settings there is a culture of fighting

against what is perceived as ‘outsider’ skills and people (e.g. marketing and

private sector candidates) entering the nonprofit sector and ushering in

disruption. Regardless, the participants agreed that new talent could serve as

‘stimulus for personal growth’ and help to renew and grow the current

workforce.

The group also wanted to adopt the self-empowering notion that each individual

in the sector is also accountable for their own career. Nonprofit employees need

to be aware of the personal benefit of networking and building their CV.

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Take-away #1

HR Skills need to be added to

the nonprofit sector.

Take-away #2

A three year human resources

plan is required in order to

adequately communicate with

stakeholders including the

board, and to measure

progress. It will require resolve

to make this happen as

research shows that even in

the private sector only 1/3 of

companies focus on the

development of leadership

skills within their

organizations.

Take-away #3

Nonprofit professionals must

take accountability for their

own careers.

Implementation tips

As the breakfast forum neared conclusion several excellent implementation tactics

were identified. Due to the constrained budgets, executives sought to form

partnerships with sponsors that would support the development of talent. Networking

and mentoring, especially outside the employees' enterprise, were also seen as a cost

effective means for developing skills. One enterprise was hosting an annual

educational symposium. It was also identified that the member organizations that

serve nonprofits such as Imagine Canada and AFP could play a key role in upgrading

talent. The colleges and universities are also addressing the talent shortage and

offering a wide array of learning options.

The group is aware that historically the nonprofit sector was staffed by volunteers and

over the course of time volunteers evolved into paid staff. An interest in the cause and

being a local resident were key criterion for staff because funds were raised locally and

often spent locally. Now that nonprofits may compete for funds globally and the

industry is mature new competencies are required in the staff. The introduction of the

new skill set provide new internal expectations for employee performance within

nonprofit enterprise. A key component of the Talent Management strategy is the clear

identification and articulation of the competencies the enterprise requires for success.

The point was also made that executives need to fairly terminate employees when

they are not ready or able to meet the new expectations. The budgets and the cause

are not well served with waste in the system and many nonprofits are unraveling

federated models which originated because of the historical grassroots. It was agreed

that real change means making some hard choices.

Janet commented that nonprofits need to work at pruning activities so that dollars and

resources can be more productively spent. She advocates undertaking a budget

exercise which matches the dollars spent with the impact achieved.

The group sought nonprofit benchmarks for financial investment in talent

management. The benchmarks the group was aware of ranged from two weeks a year

for senior executives in the private sector; ten days in large nonprofits or broader

public sector enterprise; to a couple of days in small enterprises; and with the dollar

spend being roughly $500 per person annually or an investment matching the cost of

living.

Joanne noted that the nonprofit culture of "fair= same" creates a hurdle for the

budgeting of productive talent management dollars. The practice of not differentiating

the investment in key employees leads to incremental improvement and protracts the

time lines to close skill gaps. The implementation tip is to ensure that performance

management is a critical component of the Talent Management Strategy.

In conclusion, introducing Talent Management into the culture and budgets of

nonprofits is a necessary step in the evolution of the sector if the sector is to continue

to serve Canada. The executives are astute enough that they will pace the change but

they will indeed lead the change.

Summary

"A two hour investment with my peers at the Bridge2Success Executive Breakfast Forum is a worthwhile investment. It provides a safe avenue to candidly discuss issues within the nonprofit sector and get honest and helpful feedback.”

Georgina Kossivas

Verity’s Bridge2Success Breakfast

Forum on Talent Management in

the nonprofit sector was a success

due to the knowledge and

experience of our participants, and

the practices of their respective

organizations. While there is no single solution on

how best to help facilitate change

within their organizations the ideas

they shared are applicable and

scalable for all nonprofit

organizations – large or small.

Colleen Fleming, Forum Moderator Managing Director, Bridge2Success

Verity International Limited

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Unique Needs

The nonprofit sector is growing.

At the same time, its

organizations are facing increased

scrutiny and transparency over

processes and efficiency and

fierce competition over funding

dollars and donations. Its own

best practice research has

identified that the combination of

private and nonprofit sector

experience – the Blended Skill Set

– is critical to support

sustainability.

Aligning the work and the sensitive relationship of the board and the CEO/ED, as well as managing the performance of a CEO or Executive Director (ED); and

Meeting the expectations of stakeholders for rigorous processes for selecting a new CEO/ED and managing the renewal of the board, e.g. Slate Selection process.

Bridge2Success (B2S) is Verity’s distinctive practice area dedicated to unique needs of

the nonprofit sector. From coaching executive-level “Bridgers” (leaders moving from

the public or private sectors to the nonprofit sector), to consulting to the boards that

hire them - our unique services make the relationship work and the organizations

stronger.

Bridge2Success is the link – seamlessly “bridging” the skills between private and

public sectors and the nonprofit sector, benefiting the individual, the organization

and the overall

Distinctive Services

Bridge2Success offers a specialized array of services that are a direct response to these

needs.

Board-level Consulting – From how to work with a new CEO/ED from the corporate environment, and to set him/her up for success, to how to get a board to operate together effectively.

Executive Coaching – Coaching for the new CEO/ED, with a focus on how to transition corporate, “For-Profit” skill sets to the nonprofit world, including building skills to support productive board relations.

Selection Consulting – Working with the board to establish and manage/oversee the process of selecting a new CEO/ED and/or members of the board.

Specialized People

Our advisors are carefully selected to bring a unique skill set to our customers and individual clients – knowledge, experience, as well as business and consulting acumen. They are all experienced leaders and board directors, with a keen understanding of the unique challenges Nonprofits face. And most importantly, they have the passion to make a difference.

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ABOUT VERITY

Unlocking the potential in people

Products can be copied. Customer service levels can be matched. Information technology quickly becomes obsolete.

It’s your people who drive competitive advantage and sustained performance.

Verity unlocks the potential in your people.

Consulting solutions for the people side of business

Verity International Limited is a boutique Canadian human resources consulting firm that focuses on the people side of business.

We have decades of experience working as a trusted advisor with a wide-range of organizations, individuals and executives.

“Our mission is to help leaders align their people to build sustainably successful organizations—known for excellence in performance, innovation and employee engagement.”

We clearly understand the balancing act of managing the complexities of human performance, while meeting the demands of all

stakeholders.

Our consulting and coaching solutions are unique and tailored to the specific situation. We believe in developing solutions that are

specialized and results oriented—solutions that unlock the human potential that drives organizational performance and individual

dreams. This is our core skill, our passion and the heart of our approach.

In operation for over 25 years, we have four distinct practice areas:

Bridge2Success

Talent & Organizational Consulting

Executive Advisory Services

Career Management & Transition

We operate in all major cities across Canada through our national Verity Filion partnership and in over 40 countries globally as a

founding member of BPI group.

For more information please visit us at www.verityintl.com.

7

200 King Street West, Suite 1301 Toronto, ON M5H 3T4

Tel: 416-862-8422 Fax: 416-862-2757

www.verityintl.com