One of the things we talk to businesses that use our nonprofit audit services is the necessity of planning ahead for an executive search. Although your company might not be concerned about the immediate loss of your executive, knowing how you will find the next one in advance is advantageous. That’s because it normally takes many months to find a new executive, even if the perfect candidate is someone your organization already knows well. It’s best to be prepared..
Before you begin, it’s important to have several board members designated to serve on the search team. Even when your nonprofit isn’t anticipating a vacancy, standing search committees can keep track of how much other organizations are paying their executives. They also can familiarize themselves with current talent, and identify potential candidates if and when a vacancy occurs. Of course, a key decision your team should make is whether or not an executive search firm should be hired when there’s a vacancy. Several factors need to be considered, such as how much complexity and difficulty are involved in the job description. However, committees should still look for potential talent before outsourcing recruiting efforts. Sometimes, the best candidate is actually already affiliated with your organization, including as an employee, board member, or even volunteer.
Keep track of the basics
Make sure that your executive search committee can spring into action as necessary by ensuring that current and comprehensive job descriptions are available for key positions. These descriptions should indicate applicant criteria, including knowledge, skills, abilities and even attitudes. Furthermore, be sure to integrate your corporate values and strategic goals into these job descriptions so potential applicants are aware of them. Make sure that your executive search committee reevaluates these job descriptions on occasion, so that they reflect current needs. One situation where rewriting a job description might be necessary is when your organization moves in a new direction. This can change what you should be looking for in a future executive. Another consideration for your committee is how to conduct interviews of top candidates. Who will participate? Will you interview as a group or one-on-one? Have some questions ready that will help you determine if a candidate fits institutional needs and culture.
Thinking carefully about compensation
Unless you have a current vacancy, you probably aren’t ready to talk about a specific salary. However, it is important that the entire team have the same philosophy when it comes to determining compensation. The IRS requires nonprofits to pay “reasonable” compensation, though the definition of “reasonable” is often debated. Factors to consider when deciding on the number include:
- The size and organizational structure of your nonprofit
- Types of services provided, geographic location, and financial resources,
- Qualifications of the successful candidate, and
- How competitive a compensation package is when compared to those of similar organizations.
One major consideration is whether you want to compensate potential executives similarly to other organizations of your type, or be competitive with for-profit counterparts. Another variable is if your organization wants to pay just a fixed salary, or have a variable component like bonuses or incentives.
Thinking ahead works
Because executives are critical to your organization, you should be sure and plan for searches before they’re needed. Thinking through your plan, and writing it down, ensures you’ll be ready to search effectively when the time comes. At Ernst Wintter and Associates, LLP, we are experts at helping nonprofit organizations perform their best. Call us if you have any questions.