Loss of Human Assets

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In the nonprofit world, the most valuable assets any organization has are often its people. The loss of a key employee, particularly one in a position of leadership such as a manager or executive director, can be just as devastating as a flooded office or a canceled grant. Even under the best circumstances, losing an important leader throws an organization into a period of instability that may make it difficult to function normally.

Focus on retaining employees by paying careful attention to organizational culture.

Minimizing the impact of losing key human resources starts with taking steps to ensure that they are not lost. Consider the following strategies:

  • Hire employees with a strong personal commitment to the mission of your organization. The first step here is making sure the mission is clearly and powerfully stated on any hiring materials.
  • Provide ample training. Don’t send new employees up a creek without teaching them how to properly paddle.
  • Provide fair, competitive compensation.
  • Reward employees for working extra hours by providing overtime compensation or time-in-lieu to reduce burn-out.
  • Check with employees regularly to monitor their job satisfaction.
  • Create pathways for promotions and new opportunities.
  • Keep workloads manageable –  allocate tasks carefully.
  • Allow for flex during less busy times to build good will to extra time and effort during surge periods.
  • Align what staff are good at and what they enjoy with what they do as much as possible.  Build on people’s strengths rather than focusing on their weaknesses.
  • Create a culture of collaboration and relationship building; people are less apt to leave organizations where they have developed close personal ties.
  • Recognize and reward individual contributions.
  • Set up policies that take care of people. For example, implement flexible core hours so people can tend to important responsibilities outside of work; create a strategy to be able to offer paid maternity leave; develop job-share roles to accommodate talented staff who need to reduce working hours for personal reasons.
  • Create an inclusive environment.  Pay attention to the make up of your board and management – are they all from a similar cultural background? Are all employees aware of what the organization will do to accommodate disabilities? Are training and promotions seen as fair? May employees take off their own religious holildays and work on Christmas in return?

Retaining executive directors and other high-level leaders presents a different set of challenges. The average tenure of nonprofit executive directors is surprisingly short. Inspiring leaders are often core to the ability of the organization to fundraise and attract top talent and organizations that have had this kind of leader can face crisis when this type of leader leaves.  In retaining high-level directors and managers, consider the following:

  • Has the organization gone through a high-stress or crisis period? Executive directors often leave after surviving a crisis to prevent burn-out and get a fresh start.  The board should take measures to take care of the executive director during and after these times of crisis.
  • Are the leaders getting bored? Look for signs of passion waning and stay in tune with the current passions of talented leaders.  Is there anyway to re-inspire and re-engage talented leaders? Speak openly about this and explore ways to shift responsibilities or incorporate some of the leader’s new ideas into the work.  Good leaders aren’t easy to replace. 
  • Keeping open conversations about the aspirations of leaders of the organization will ensure that you are not surprised when that leader decides it is time to move on. 
  • Abrupt terminations due to inappropriate or illegal activities happen. The impact of sudden departures can be minimized through careful planning.

Minimize the effects of a lost employee by having a succession plan.

The loss of someone who plays such a key role can make it very difficult for an organization to maintain even basic operations, never mind muster the resources and clear thinking needed to plan for an orderly succession. An organized transition can sustain morale and ensure the continuity of services. 

To ensure an organized transition, even in the case of an abrupt departure, ensure a succession plan is part of your crisis management plan. A succession plan is a set of activities, policies and instructions for making the search for replacement leaders as smooth as possible. The plan should include:

  • Develop working relationships with consultants, volunteers, and temp agencies who can help you “fill the gap” while the search for a permanent replacement is underway
  • Develop procedures for handling the contacts, projects, and files of departing staff members so that nothing gets lost in the shuffle
  • A pre-set, developed policy that lays out the expected approach for searching for and hiring an executive director
  • Ensure that at least one person within the organization, or a board member or retired director, continues to shadow the executive director and understands that s/he is the designated interim leader in the case of an abrupt departure
  • Groom talented staff for leadership positions – consider creating a management development program, however small or informal
  • Have an emergency fund available or know what you would need to cut to cover the cost of finding a replacement, including fees for search agencies and listings, travel expenses, severance pay, and the additional salary required for an interim leader

Take time to find the right replacement for key leadership positions.

It can be easy to worry about how the significant responsibilities that person has shouldered will be handled until a good replacement can be found. It is important, however, that the replacement search be orderly and not rushed. To ensure a careful, deliberate process, include the following elements in your response:

  • Have the board and key leaders consider how else the organization is changing or may need to change. Given where the organization is, and where it is headed, what sort of new leadership is required?
  • Create a transition committee. This group will be responsible for making sure that the organization continues to function while the leader is being replaced. They will also manage the replacement search.
  • Determine whether to designate an interim leader considering the following factors:

  • What needs to get done during the transition period that would normally be the departing leader's responsibility? How else might this work get done?
  • What responsibilities can board members and other leaders take on temporarily? 
  • What additional staffing can the organization afford?
  • If a staff member is promoted in the interim, will they be able to transition back to their old position smoothly? How would you fill the gaps left by this person leaving his or her current position?
  • If the departure of a key player was financially motivated, be sure to work with board members and key donors so that they understand the need for more funding, or reorganization of funding, to increase leadership salaries to competitive levels. This should be done as soon as possible so that a higher salary can be used in the search process to attract better candidates.
  • The committee may also want to consider hiring a consultant to assist in the transition process. Consultants can give advice on how best to conduct the replacement search, how duties should be shared in the meantime, how to pick the best interim leader, and more. Consultant fees can be high, but a consultant may choose to donate his or her time or offer a discounted rate to a nonprofit.
Click to open interactivity Replacing a leader can be a difficult endeavor.

Replacing a leader can be a difficult endeavor.

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