Nonprofits face a unique talent challenge, filling fewer senior roles internally compared to businesses. A recent survey reveals that only 30-40% of nonprofits promote from within, while 64% of businesses do. Yet, according to Nonprofit HR, a substantial turnover is anticipated, with 45% of nonprofit employees intending to seek new opportunities in the next five years, posing a potential talent exodus.
To address this, nonprofits must proactively invest in succession planning, focusing on key HR processes and benchmarks:
1. Invest in Leadership Capacity
Identify and develop internal talent through targeted training and mentorship, reducing reliance on external hires and fostering continuous development.
2. Evaluate Management Compensation
Regularly review compensation structures to remain competitive, as salaries for nonprofit leaders have surged up to 30%, reflecting the fierce competition for skilled professionals.
3. Explore New Talent Tools
Leverage innovative tools such as data analytics and AI to gain insights into employee capabilities, potential skill gaps, and succession readiness.
Staffing Competition and Implications
As discussed in “Large Numbers of Nonprofit Leaders Are Stepping Down — and the Competition to Find New Ones Is ‘Fierce, in the Chronicles of Philanthropy, intensified turnover at the top has heightened staffing competition. This leads to a significant increase in nonprofit leaders’ salaries. Health and human-services groups, in particular, are facing fierce competition for executive talent.
“More than 30 of the 142 health and human-services groups in the Columbus, Ohio, area have lost their leaders or will soon, says Michael Corey, executive director at the Human Service Chamber of Franklin County.”
“All this churn has pushed salaries for nonprofit leaders up as much as 30 percent over the last two years. As salaries keep increasing, the competition between nonprofits is fierce,” says Gayle Brandel, CEO of PNP Staffing Group, a nonprofit executive search firm.
The Value of Succession Planning
Proactive succession planning delivers tangible benefits for nonprofits.
Ensure Long-Term Sustainability
Safeguard the organization’s mission and impact on the community by identifying and preparing future leaders.
Identify Future Leaders
Nurture a pipeline of talent by identifying individuals with leadership potential.
Understand Talent Pool Depth
Gain insights into the depth and limits of the talent pool to make informed decisions.
Identify Vulnerabilities and Risks
Anticipate and address potential vulnerabilities and risks within the organization.
Effectively Manage Key Personnel Changes
Facilitate smooth transitions during key personnel changes, ensuring continuity.
Identify Skill Gaps and Managing Development
Identify and address skill gaps through targeted development plans.
Motivate Individuals by Stretching their Abilities
Provide stretch opportunities to motivate individuals and prepare them for future leadership roles.
Succession planning is not just strategic; it is imperative for nonprofit sustainability. By investing in leadership capacity, evaluating compensation, and leveraging new talent tools, nonprofits can navigate staffing challenges, ensuring continuity, and driving long-term community impact.
To get started with succession planning, please contact us.