How to Hire Top Talent When You Can't Pay Top Dollar
Large corporations spend millions of dollars each year to recruit and retain top talent. Businesses looking to fill a key executive position typically use professional recruiters—conducting extensive searches and often poaching directly from competitors. Many nonprofits, meanwhile, will settle for posting job descriptions on social sector job boards, or spreading the word through their personal networks.
In the last four years, our in house-team of five professional recruiters has helped dozens of mission-based organizations fill more than 100 executive positions. We've seen how many decision makers assume that their financial constraints mean that they can't compete with for-profit businesses for talent. This mindset needlessly limits the quality of their teams, and thus, their ability to have an impact. Indeed, many mission-driven executives who believe they can't afford to compete for talent may be underestimating the real costs of churn and filling positions with the wrong person.
By thinking flexibly about the package one can offer an employee—what we call the employee value proposition—nonprofits and social businesses can widen their pool of attractive candidates. Below are some tips. While they are not entirely new, they are still surprisingly under-utilized.
Innovate the Offer
The lower salaries many nonprofits and social businesses offer can be an obstacle in attracting the right candidate but that doesn't mean they need to limit their search to those for whom salary isn't an issue. Instead, think carefully about what other assets you may be able to put on the table.
For example, if you're a public health start-up and your headquarters are in New York, you may not be able to compete for medical professionals and researchers with nearby pharmaceutical companies. But perhaps there's an equally ideal candidate in North Carolina. Geographic flexibility (and the use of technology to bridge physical distance) could give you an edge in talent markets where skilled candidates might be easier to attract. We've also seen nonprofits in smaller job markets compete in larger geographies by employing such flexibility. Consider this recent job post for a Development Director from the One Acre Fund; the organization is based in Minnesota but they advertise for candidates in "any east coast city." Further, they position themselves to attract talented and ambitious candidates by noting promotion potential to Chief Development Officer.
You can also be creative about other forms of financial remuneration. One of our investees recently sought to hire a CFO whose market value was around $225,000—but they could only offer $120,000 in salary. The organization was considering squeezing out an additional $10,000 to offer to try to broaden their applicant pool. Guessing that this additional money would make little difference to someone already considering giving up half their salary, we advised the organization to instead think about compensation in other ways. For example, perhaps the new CFO could sit on a board of a for-profit company in an aligned industry. This would give the CFO additional remuneration while broadening his personal network and deepening the organization's ties to an aligned company. Similarly, we ourselves frequently consider allowing an executive to bring along her long-standing personal assistant when they join our team, rather than hiring a new one when they come on board. Such a gesture can go a long way towards making someone feel confident in accepting your offer without necessarily costing the company more.
Reconsider your Mission Screen
Another way that non-profits and social businesses unconsciously narrow their candidate pool is by applying a blunt mission screen. In several cases, we've seen organizations turn away highly qualified candidates because they don't have a demonstrated track record working on a specific social issue. Yes, it's important to ensure anyone you hire grows to be dedicated to your social mission. But there are good reasons that someone who cares deeply about your work may have spent the last few years as a business consultant—perhaps they had student debt to pay off or dependent parents after which to care. If your candidate has the right skill set, look for places where his or her values align with your organizations, don't just focus on their last job. Indeed, an executive's willingness to take a significant pay cut is an indicator that she deeply values your organization's social mission.
Be Willing to Wait
We've frequently worked with organizations that are not excited by any of the finalists of a recruitment process but pick one for the sake of moving forward. We believe that the right person is worth the wait. When recruiting for the head of our India office, we waited nearly two years to find an executive with the right business and investing profile. Jayant Sinha's track record of building one of the largest impact investing firms in the country showed us that this patience paid off. We also regularly (and with significant success) go back and court candidates to whom we made past offers since their decision to decline might have been based on timing, not on fit or interest in our organization. The right candidate will rarely come to you; persistence dramatically increases your competitive edge.
Conversely, if you rush to fill a vacancy and realize you've made a hiring mistake, we advise taking action swiftly and in a manner aligned with your organization's values. The hiring mistake will be clear to other employees and may affect morale and foster mediocrity. Too many organizations try to shuffle a person around from one team to another, instead of designing a dignified exit.
In the past decade, more and more professional "bridgers" from the for-profit world have sought jobs in mission-driven businesses and nonprofits (see this excellent research and analysis by the Bridgespan Group). But nonprofits haven't changed their approach to recruiting and retaining their top talent. In these times of weak job markets and economic uncertainty, the opportunity is tremendous—and the potential talent pool of seasoned executives it continues to grow. A little creativity, flexibility, and gumption may be what your organization needs to compete for the right people.