For Today s Discussion

Transcription

1 Managing Compensation Systems and Staff Incentives During Capital Campaigns Amy Bronson, Executive Director of Recruitment & Professional Training Boston University Webinar January 16, 2014 For Today s Discussion High Cost of Turnover Importance of Staff Engagement Proactive Retention Strategies Compensation Systems Your Role as a Manager Strategic Staff Assessment Conditions for success 1

2 Love Em or Lose Em Would I ever leave this company? Look, I'm all about loyalty. In fact, I feel like part of what I'm being paid for here is my loyalty. But if there were somewhere else that valued loyalty more highly, I'm going wherever they value loyalty the most. The Facts In 2007, researchers at Eduventures interviewed more than 600 advancement officers from 30 institutions. Forty percent said they would leave their current institution for greater career opportunities; 49 percent of the highest-performing group of advancement officers said the same thing. Studies on turnover in the fund-raising field generally mention familiar reasons: unrealistic expectations, limited resources, poor culture of philanthropy, inadequate compensation plans, and absence of career path and succession planning. 2

3 Impact of Turnover Donors are thrown off their game by high staff turnover. Giving is extremely emotional and personal, and good fundraisers develop genuine relationships with their donors. It feels like abandonment when they leave. We can t build revenue from major donors because we can t seem to hold onto our gifts officer long enough to see progress. I m at my wit s end. * Penelope Burk, Donor Centered Leadership; 29, 48 Impact of Turnover How donors reacted after losing an effective capital gifts officer: 77% Had no impact on their giving 12% Made smaller gift 7% Took longer to make gift 4% Stopped giving altogether * Penelope Burk, Donor Centered Leadership, 29 3

4 Costs of Turnover Number of Staff Replaced and Cost of Staff Turnover at $49,554/staff Year 1 Year 2 Year 3 Year 4 16 Month Tenure -Number of staff replaced total cost of staff replacement 0 $ 198,216 $ 198,216 $ 198, Month Tenure -Number of staff replaced total cost of staff replacement 0 0 $ 198,216 0 Cumulative Cost of Staff Replacements by end of 4th Year -16 Month tenures 0 $198,216 $396, 432 $594, Month tenures 0 $0 $ 198,216 $ 198,216 * Penelope Burk, Donor Centered Leadership, 28 Impact on Turnover by Generation Length of Stay in Last Three Positions by Age Group Average Length of Stay Respondents' Age Under Most Recent Position 1.6 years 3.5 years 4.2 years 6.5 years Second Most Recent Position 1.8 years 3.0 years 4.0 years 5.8 years Third Most Recent Position 1.0 years 2.9 years 2.4 years 4.3 years * Penelope Burk, Donor Centered Leadership, 37 4

5 How important is compensation, overall? Quick Poll: What is the most important reason loyal fundraisers stay in their position? Please rank in order of importance (1, 2, or 3). Positive workplace environment Financial Advantages Career Advancement Opportunities The Data The Top Three Reasons Loyal Fundraisers Stay: 98% Career Advancement Opportunities 84% Financial Advantages 70% Positive workplace environment * Penelope Burk, Donor Centered Leadership, 37 5

6 More Facts Why Fundraisers plan to leave their current position: 74% Career/Financial advancement 70% Difficulties with position 60% Conflict/differences with other people in the organization 36% Achieved all that I could 34% Work-life conflict 32% Intention to leave the fundraising industry * Penelope Burk, Donor Centered Leadership, 48 The High Cost of Turnover How do we make the case that we need to spend more now on staffing and programs? Can we measure ROI? 6

7 Predictive Modeling Experiment $200,000 in staffing and program costs yields $1.6 million in additional fundraising. it is entirely rational to spend more now to promote and retain a talented major gift officer than to suppose that this officer can be replaced without a loss of fundraising revenue. *Darrow Zeidenstein, Effective Measures, Chapter 2 Keeping Your Staff Engaged Strategic Staff Planning & Assessment Staff Engagement Retention: Career Progression Growth and Well Being Recruitment, Onboarding, Training & Development 7

8 What Matters # All Universities Highly Competitive/ Desirable Competitive/ Desirable Less Competitive/ Less Desirable Not Offered/ Not Applicable 1. Institution's Reputation 80% 20% 0% 0% 2. Retirement Benefits 52% 48% 0% 0% 3. Salary 50% 50% 0% 0% 4. Tuition Benefits 32% 44% 20% 0% 5. Career Advancement Opportunities 24% 68% 8% 0% 6. Health and Welfare Benefits 24% 68% 8% 0% Work/Life Accomodations (e.g., telecommuting, 7. flexible hours, etc.) 16% 76% 8% 0% 8. Discretionary Awards 4% 20% 36% 40% 9. Annual Bonus/Incentive 0% 16% 16% 68% 10. Sign-On Bonus 0% 32% 20% 48% * Pearl Meyer and Partners, Development Staff Compensation Survey, 28 Retention for the A Team Competitive compensation A seat at the table (impact on decisions) An excellent boss Executive coaches/mentors Flexible work schedules that support work/life balance Collegiality, fun, supportive and healthy culture Resources and tools needed to do their job Clear goals and rewards Community building/time to perform volunteer work Virtual/remote work options or work from home 8

9 Retention For All On-boarding Professional development Leadership training Consistent performance coaching Internal job posting/promotion programs Career planning Succession planning/career progression Job specific training and development Recognition and incentive programs Competitive Compensation Proactive Retention A strategic approach to ensuring you grow and retain the best talent Requires collaboration and commitment Requires investment in time, staff and other resources Requires assessment: do your homework 9

10 Retention Toolkit Books: Shine: Using Brain Science to Get the best from your People Edward M. Hallowell, MD, Harvard Business Review Press 2011 Harvard Business Review Guide to Giving Effective Feedback Harvard Business Review, 2012 Retention Toolkits 10

11 Why is it so hard to find good people? Compensation is not competitive Cultural Issues (unhealthy culture, bad managers) Campaign Cycle (end of Campaign, attrition) Lack of qualified talent in my area Little or no upward mobility at my institution Lack of time or talent to commit to effective search Too much competition in my region The Talent War More at stake Competition is fierce Lots of players in the game The game is more intense It s expensive And there are casualties 11

12 What are your hiring challenges? Quick Poll: What are your hiring challenges? Choose up to three: Compensation is not competitive Cultural Issues (unhealthy culture, bad managers) Campaign Cycle (end of Campaign, attrition) Lack of qualified talent in my area Little or no upward mobility at my institution Lack of time or talent to commit to effective search Too much competition in my region Compensation How important is compensation overall? Where are you in the market? What positions are a challenge? Current Trends 12

13 How Important is Compensation Overall? The Top Three Reasons Loyal Fundraisers Stay: 98% Career Advancement Opportunities 84% Financial Advantages 70% Positive workplace environment Career Progression Good managers have a plan for staff Cultivate and steward staff as you would donors Hire people you can grow Know Thy Staff If you can t grow your staff, someone else will 13

14 Developmental Hierarchies Developmental Hierarchies are incremental career ladders that utilize a clearly defined road map for high performers to grow within your organization. They are specific and transparent plans that outline what goals need to be met, in a specific time frame, in order to advance to the next level They meet both the employee s need for career progression as well as your business needs Your Role as a Manager the existence of these developmental hierarchies in and of themselves does not account for success. Managers need to be trained to understand the importance of their role in the developmental process, and employees need transparency around the criteria required to get to the next step. *Brenda Speight Ricard, Effective Measures, Chapter 5 14

15 Developmental Career Paths Rewards strong performance Develops your talent pool Saves you cost of turnover & training Positions you as employer of choice Tied to strategic succession planning Healthier culture Cost of Internal v. External Hire Cost and Risk Implications of Replacing a Successful Director of Development: Internal Promotion versus External Hire Activity Internal Promotion External Search Direct and indirect cost of hiring $0 $30,000 to $75,000 Time position is vacant between old staff leaving and new replacement starting 0 days Up to 90 days Time required for orientation to the organization and the new job 0 days Up to 90 days Lower productivity during initial period on the job Up to 60 days Up to 180 days Other staff leave due to uncertainty or to follow the departing Director Likelihood minimized The risk exists New Director takes departing in a different, and ultimately, less successul direction Unlikely Possible * Penelope Burk, Donor Centered Leadership, 99 15

16 Developmental Fundraising Positions at BU with Corresponding Requirements Unit Number of Positions Developmental Levels Minimum Qualification School Based (15 Schools) 35 Leadership Gifts 12 Annual Fund Leadership Gifts 5 1. Assistant Dean 2. Director of Development 3. Sr. Leadership Gift Officer 4. Leadership Gift Officer 5. Sr. Development Officer 6. Development Officer 7. Sr. Development Associate 8. Development Associate 1. Director 2. Associate Director 3. Regional Director 4. Sr. Leadership Gift Officer 5. Leadership Gift Officer 1. Director 2. Associate Director 3. Assistant Director 4. AFLG Officer 5. Development Associate 8-10 years 7+ years 5-7 years 3-5 years 3+ year 1-3 years 1 year Entry level 7+ years 5-7 years 3-5 years 3+ years 1-3 years 5+ years 3-5 years 1-3 years 1 year Entry level BU Career Paths Partnership with staff, managers & STM team Partner with HR and Compensation teams Market culture of internal promotions Parameters (in position 1 year, etc.) Tied to strategic succession planning Hold managers accountable 16

17 Boston University, Development & Alumni Relations Recruitment and Training Website Boston University, Development & Alumni Relations Recruitment and Training Website 17

18 Boston University, Development & Alumni Relations Recruitment and Training Website Strategic Staff Asessment Hire people you can grow Good managers have a plan for staff Know Thy Staff If you can t grow your staff, someone else will Who is in charge of talent? Determine your outcomes Realities of your resources Do you have conditions for success? 18

19 Identify High Achievers They are driven by something deeper They think on their feet They jump in on a problem without being asked. They speak up when others won t They know when to challenge and when to back off They recognize the contributions of others They know when to handle sensitive issues in private Talent Analysis and Succession Planning Name Title Years in Profession Years in Mission Position Critical High Performer High Consistent Potential Performer Other Succession Plan Rating: Ready Now (A) Ready in 1-3 Years (B) Watch List (C) Succession Risk: Low, Med, High 19

20 Compensation Assessment Where are you in the market? Market analysis or salary benchmarking Talk to peers/network Call a recruiter Look at your resources Alternative forms of compensation Staff survey Hard to Fill Positions Frontline fundraisers (major gifts) Senior management Corporate & Foundation Relations Planned Giving People who really want to be on the road Closers with a track record Solid management experience 20

21 Trends in Compensation Upfront bonuses More perks like housing/car/mobile phone Retention bonuses Bonuses tied to goals Flexible schedules/telecommute Sabbaticals or leaves Clear career path plans Positive Work Environment or Happy Staff Do you know what motivates your staff? Do you have a plan to meet their needs? Are you an employer of choice? Be prepared to be flexible Ask, Ask, Ask 21

22 Have Fun at Work Have Fun at Work 22

23 Have Fun at Work Love Em or Lose Em Culture Surveys Celebrate Staff Milestones A great boss Learning & Development Programs Recognition Programs Deal with poor performers Staff Affinity Groups Snacks, parties, fun, collegiality 23

24 Conditions for Success Buy in from the top Core values and structure align Culture of internal promotions Know your competitive advantages & incentives Strategic alignment Make the case for resources Recap High Cost of Turnover Importance of Staff Engagement Proactive Retention Strategies Compensation Systems Your Role as a Manager Strategic Staff Assessment Conditions for success 24

25 QUESTIONS? Contact Information Amy Bronson Executive Director, Recruitment & Professional Training Boston University

26 Resources Donor Centered Leadership: What it takes to build a high performance fundraising team Penelope Burk Publisher: Cygnus Applied Research Inc, 2013 Effective Measures: The Return on Investing in Talent Management Edited by Jon Derek Croteau, Ed.D. Publisher: CASE, 2012 Love Em or Lose Em: Getting Good People to Stay 26 Engagement Strategies for Busy Managers Beverly Kay and Sharon Jordan-Evans Berrett-Koehler Publishers, Inc., 3 rd Ed. Managing Time and Energy: A Team Sport Karen E. Osborne, President, The Osborne Group, Inc. Multi Media File Publisher: CASE, 2008 Published: 2008 The People First Approach: A Guide to Recruiting, Developing and Retaining the Right People Jon Derek Croteau, Ed.D. Publisher: CASE,