Nonprofit boards rarely develop an in-depth strategy for assessing their organization’s human capital. Some will keep informal tabs on the CEO’s direct reports to prepare for the possibility of his/her sudden departure or is incapacitated. Others –smaller organizations with fewer than 20 employees—need only a basic plan for such an occurrence.
Need for Strategy: In my view, maintaining a viable talent strategy to assess staff and management personnel is a board responsibility, albeit one that is often ignored. The latter stems from the constant turnover of nonprofit members whose median term of service is 4-6 years—hardly a lifetime commitment. Like for-profit board members whose focus is on quarterly earning results, their nonprofit counterparts are likely more interested in resolving current problems than in building sufficient bench strength for the organization’s long-term sustainability.
Measurement of Results: Key to having a viable talent strategy is establishing metrics that indicate the success of the program. Following are examples of talent development impact metrics. *
• Number of designated successors for key position who are considered to be “ready now” and “ready in 2 to 3 years”
• Changes in employee turnover (including regretted and unregretted departures), vacancy rates and median recruitment time for key positions
• If a strategy is established, at what points should it be assessed?
Some of these types of metrics are subject to management interpretation, and may be out of the comfort zone of many nonprofit managers seeking to achieve demonstrable impact from their efforts. Many may see their development as a board mandated distraction. I have been associated with dozens of large and small nonprofits as a board member or consultant, and I can only think of one, with about 1400 employees, that has only recently developed a talent strategy. I have suggested the Talent Strategy issue as an audit committee member but can’t find support from my committee colleagues .
Board Responsibility: If nonprofit boards were financially liable if their organizations lacked a talent strategy, I am sure more would give the issue higher priority. However, overviewing staff talent, in my view, is a board process that needs board due care . Most experienced CEOs will agree it is often the human capital element that makes the difference between achieving impact needed by nonprofits. High performing talent drives all this effort, and in many areas, like IT, nonprofits must compete with business organizations for experts. But there is even growing competition among nonprofits. Example: Charitable human services nonprofits and hospitals have wage and benefits differentials making the employment of social workers difficult for the charitable group.
If your board has never discussed the necessity of developing a talent strategy to maintain, promote and hire in a sustainability format, it can do so by discussing the following questions:
• Why don’t we don’t have a talent strategy?
• How can a strategy assist with long-term sustainability?
• What would the board’s role in overviewing the strategy?
• What might be the benchmarks of the strategy?
• How should the nonprofit assess the impacts of the strategy?
• What staff levels, below the c-suite, might be included in the strategy?
• How can board members reach beyond C-Suite levels to seek information?
• How are gender, age, and minorities, etc. represented in the staff? The board also has to overview job specialties that are key for a sustainable operation?
• How does management assess the abilities of current leaders and potential leaders to focus on the human resource sustainability of the nonprofit? **
In my estimation, an open and robust discussion of these questions will convince most mature nonprofit boards that a talent strategy is needed.
**Ibid. Developed from ideas in the above publication and the author’s experiences.