 And today I'm thrilled for our guests. So let's get started. My class is right on time. So Lisa McEwen, welcome. Lisa is the managing director, total rewards with non-profit HR. We are so glad to have you today to talk to us about compensation and what you make matter. So thank you for joining us. Thank you for having me. I'd love to talk about this, love to talk about it. Well, we can't wait to hear what you have to say because we've been so excited about this for such a long time. And so we have a lot to delve into. First, we want to thank our presenting sponsors. Without you, we would not be here having this amazing discussion, talking about all things as it pertains to the nonprofit sector. I'm Julia Patrick, CEO of the American Nonprofit Academy, joined here this morning by the nonprofit nerd herself, Jared Ransom, the CEO of the Raven Group. OK, so this is the big discussion that everyone's afraid to have, compensation. Lisa, kick it off with what is a compensation philosophy? So a compensation philosophy is one of those guiding principle documents that I think are as equally as important as, say, a strategic plan could be to your organization. And I always refer to them when I work with our nonprofit partners as the outward expression of the organization's inward approach to compensation. And I think they're so important because it really outlines for your staff as an organization, how you're making compensation decisions. What makes up your compensation? Is it benefits? Is it salaries? Is it bonuses? Is it benefit perks, rewards and recognition? What's your DEI approach? So how do you make sure that you're paying stuff equitably? So it really lays down the foundation of how the organization cares and feels about compensation. OK, Jared. I've got to ask you a question. Because you are the nonprofit nerd and you've done a lot of interim work, have you ever seen or worked with an organization that actually had this and had this written down? No, I have not. I will be honest, I have not. But I love when there is a written out plan so that, as you said, Lisa, it really does address and identify what are the opportunities and how are we being equitable in our compensation philosophy. I am more familiar with seeing this space, honestly, when it comes to city, government, any kind of work like that that says we're hiring at this class maybe is the title or you know. And then it'll say between the ranges of this and this and here are the requirements that you need. So that's kind of what I'm looking at for similarity. But I have not seen it with any nonprofit I've worked with. And I can tell you why you probably don't see it that often is because you don't start with a compensation philosophy. You start with, are your job descriptions well written? Are they well-defined, reasonably well-defined? Have you looked at the competitive marketplace? Have you looked at salaries in your market area? Do you have a compensation structure? Do you have any practices in place? So the compensation philosophy is not the starting point. So you might not be seeing it if organizations really haven't done the work to think through what is our compensation philosophy. So it's not the starting point. I would say it's the middle of the process or near the end of the process. So if you don't have those things in place within an organization, it's not surprising that they don't have a comp philosophy in place too. Amazing. So let's dig into compensation and benefits. I mean, this is such a scary topic, especially for women, especially in the nonprofit sector, where I think a lot of times the sense of it is that you have to suffer for your craft and that you really shouldn't be asking for the for-profit market rate. There's all of these myths that we buy into. So talk to us a little bit about that compensation and benefits part of this. Yeah. I mean, in the nonprofit space, oftentimes, benefits are one of the factors, your benefits program. It is one of those very important pieces that an organization is spending their budget on to really attract and retain, because salaries can't always compete with the nonprofit, excuse me, with the profit space. But benefits generally tend to be richer or at least equally as rich as perhaps some of the for-profit spaces, because that's what can get staff into the organization. So retirement plans, good health insurance, flexible leave programs, and PTO programs, these are all part of that total rewards equation that engages your staff, and oftentimes can keep them there. So thinking through what those benefit programs are for your organization and making sure they're staying competitive and meeting all the needs of the different generations that are in the workforce now, but also that you're thinking about health equity. Health equity are your staff. Are they able to access the plans? And do they understand them? Do they know how to use them? So all of these things actually definitely go into the total rewards benefit piece that really your employees are expecting now. Absolutely. I'm so happy to draw all of that up, because it is so much more than compensation. It really is the entire package of benefits. I will witness to you that when I was early in my career, I did not think about the benefits. They didn't really weigh in on my decisions. I just thought, oh, no big deal. This is what I will be paid. And that's the dollar amount, if you will, that I looked at. And I didn't consider the package with the benefits included. And now that is definitely something that when I talk to my younger self or when I coach individuals regardless of age is let's consider the entire package. Yeah, and having different generations in the workforce, those who are single, those starting their families, those caring for elders and everything in between and expanding sort of the definition of family and accommodating that in the different programs and the different benefits that your organization needs, your leave programs. So I think, yes, health insurance, dental vision, life insurance, retirement. Those are like the five core pieces, but it goes so far beyond that now. So far beyond that. I love that you brought up the generational aspect of your workforce. Fascinating, because we talk a lot about that just between Jarrett and I because of, we have a 20 year age difference, which really, pardon me. I'm older. I'm the older one. She's so old that we have to speak a little slower. But you know, Jarrett and I do talk about that and we've spoken about that in many ways throughout the course of the nonprofit show because the way the generations respond to things, it's extremely different. And I think sometimes we don't really look at that. And along that, I think it's really interesting to understand what the workforce marketplace is because of those generational differences. People are looking for different things. Oh, definitely. You know, one of the biggest ways that we see this, you know, become, you know, operationalizing within organizations is they're much more vocal. So the younger generations are much more vocal about what their salary is. They want professional development. They want career development. It's expected now within organizations. Another, you know, big change in this nonprofit space is salaries are becoming more transparent. So sharing salaries, posting salaries on your job descriptions, more access to data on the internet. Even though we might not necessarily like that certain data that other people are posting, you know, not really trusted third party surveys, you know, they're still taking that data and using that to come to the organization. Like I should be making more or, you know, why can't we have this particular benefit? You know, and then there are, you know, those who might be of the older generations dealing with different issues, they want, you know, they value more flexibility. They want more, you know, different hours. They, you know, so different things mean different, you know, points in different parts of people's lives and the age that they are. But I often think that what's pushing forward primarily is more transparency. I deserve this, I have this right and I want to be developed and I need to understand what are you going to do for me? Not necessarily what is the, you know, what are you, what am I going to do for the organization? It's more 50-50, it's a two-way street now. You said talk to us about the salaries being posted on the job descriptions. Why is that important? I think because, you know, in many states now, you know, you used to be able to ask, you know, what's your current salary? You can't really ask that any longer and even in states where maybe they don't have laws around that yet, you still don't necessarily want to ask that because there's now this sense of asking what somebody's salary is, you know, if they could be, you know, excuse me, gender, you know, female or a person of color, they could be coming from a place where their salary is historically or through legacy already low. So organizations to really inform and push forward, particularly when equity is such a strong mission and such a concern for a lot of organizations, you know, posting the salary, one allows someone looking for that job to decide, you know, I don't, this salary is not going to work for me and they sort of are eliminated by it. But it also allows an organization to prove that they're doing their due diligence. They're looking at salaries, they have a structure, they're keeping them updated. And it says a lot about an organization that's comfortable about being transparent around what they're going to pay because they're also not sharing it just with the person who's interviewing, but their staff are able to see it as well. It's public. So it's public. And that means if it's public that an organization has likely done the foundational work to enable themselves to post that. And it says a lot of good things about the organization. I'm so glad you addressed that. Thank you so much. It went way beyond what I have heard is it's an equity issue. And so I actually stopped sharing or recommending postings that did not have that, right? That did not have the pay salary in the job description or I would make a comment or reach out to the person directly to say, might you consider like posting that publicly? I would love to share it, you know, if I had this. And it doesn't mean an organization has to post the full range, the full minimum to, it's really what's the hiring range given the position. So it doesn't reveal the whole range. Just sort of what's the hiring? What's the entry point for this position? So. Now, another thing that you talked about and you mentioned it's just, it's not about that dollar amount, but it's rewards and recognitions. And explain to that, explain to us what that means and how we kind of quantify it. Yeah, I think for a lot of, you know, staff that work in nonprofits, I mean, folks work for nonprofit, I've spent my career working in the nonprofit in the international NGO space. And I did it because I valued the missions that I was working with. So many times, you know, employees and staff that are working for nonprofits, they are there for the mission. They're not there because of, you know, the salary or necessarily even the benefits. But while you're there, there needs to be, you know, everybody needs to have a living wage and good benefits and all of that. But rewards and recognition goes beyond to things like, I'm seeing more nonprofits actually implement wellness plans and wellness activities and wellness sort of contests. I'm also seeing things like spot bonuses where they're not a lot of dollar value to do that, but it's allowing organizations to recognize and allowing staff to nominate their other employees or other staff members as well for spot bonuses. And we're also seeing the rise of, I call them convenience benefits, but they are becoming very, very common. And I think a lot of it is allowing employees to be engaged and do their work and feel productive, but also offer benefits that help make their lives a little easier, like auto and home insurance through your paycheck, you know, paycheck deductions. It doesn't cost the organization anything, sort of a pass-through benefit, but what a convenience, you know, for the staff members or emergency daycare or elder care, if you'd have children or you're caring for elderly parents. So a lot of these things are working their way into the mainstream, where it was really almost seen as a benefit or a perk for those who might've been more higher up in the organization. Wow, I love that. You know, and I keep thinking about the very first question that we posed to you is, you know, the concept of philosophy. And wow, this really does kind of shift your mindset. Jared, you always talk about retention. You know, what are we gonna do, not just to attract people, but to keep our people? And that seems to me like this is one of those pieces. Yeah, I've been involved with way too many organizations that one of their top challenges is their turnover rate, right? And so identifying why? Why are we losing, you know, the talent? First of all, are we hiring the right talent? You know, and then what are we, what methods or what practices do we have in place to compensate appropriately, provide benefits appropriately, reward and retain this rockstar talent to not only reduce our turnover rate, but really to like deepen our programs and our overall community reach because you're really building that person holistically. So it is something I talk about. Again, I am not human resources. I've played that role on TV, but that is not like what I was trained to do professionally. But when I come in and serve as an interim executive director, I'm often making HR decisions, you know, in concert with others. So it has been a point of topic that continues. Yeah, and I mean, just to add to that really briefly, you know, with the organizations that we're partnering with, oftentimes they might come to us because they're losing staff. And we'll often ask the questions around do your staff understand how the organization makes decisions around salary? Because when someone doesn't understand how is my performance increased determined, how do I make more money at this organization? How do I grow? When that work's not done by an organization and there's not a lot of trust or transparency around it, I think some staff will think, well, I think I can do better somewhere else only because the organization's not talking enough about it, not building trust around it, not being proactive about it. Okay, so then this leads me to the next question or I should say maybe topic. And that is compensation communication. Is that what you're talking about? That is exactly what I am talking about. And did you go ahead? No, so it's not just like when you're out in the marketplace looking for somebody it's a mindset with where you're actually working that with your whole team. Exactly, when I was in house HR and I was for many years, I was responsible for communicating out about our compensation decisions, whether it was to the board, the leadership team or to staff. And if an organization is not thinking about being really mindfully thinking about how they communicate about compensation. Yes, one way to communicate is post your ranges within your job descriptions and that's great for external folks to see, but internally the way you communicate about compensation decisions, your philosophy for example, or is there an understanding that everybody is being treated equitably when someone is promoted or around merit performance increases or even spot bonuses or even end of the year financial bonuses. So if there's not something in place and you're not being honest about and transparent about how decisions are made or what you're sharing, are you sharing your compensation structure? Are you sharing where the jobs fall within each job grade at minimal or even the range? So really thinking through how you're talking about communication, if you haven't done it, it can be difficult to change the culture just to do that because you might not have the trust around it, but you can start at any time, but you have to be mindful about what you say and do you have the foundation in place to then be able to talk about compensation? The practices, the policies, a structure, when's the last time you looked at your salaries competitively? So there's a lot about this related to compensation and it really matters. It really does. I have a question, Lisa, and we warned you, like we have no scripts, so these are just curious questions. This might seem like a curve ball. If an organization does not have the structure in place, if they're not communicating what might someone do to even like put this on the table and bring it up in discussion? Like how do you take light of this? Yeah, I think oftentimes, and what I'm seeing is that employees themselves are driving it because they are either, they're frustrated because they think they can do better at another organization because they don't know if they're being paid competitively, if the organization is looking at it. So oftentimes, employees might drive it. I think anyone who's in a leadership role, if an organization doesn't have an HR person sitting there, if they're a smaller nonprofit, oftentimes it can be sometimes even driven by the board because sometimes if an organization is really small, there's a lot of communication between the nonprofit employees and the board, they might hear things and they might actually, that's actually a few of our projects have come through because the board has insisted they are hearing things, employees are unhappy or there's high turnover. Sometimes it's the executive director. I think no matter where it comes from, I think, and sometimes the CFO, I think no matter where it comes from, I think it's important to take a leap to it minimally. Just take your job descriptions, look at your salaries to the external market, to some survey sources, look to see what those positions should be paid and then benchmark your staff salaries to it. At least have a sense of, are you close to the market and where are you? But I think any one of those groups, oftentimes can drive this push. Thank you so much, because I can feel that some of our viewers are thinking the same thing of like, I don't think we talk about this and how do we talk about this and who's the right person to bring it up. A little bit during our pre-life, so we were talking before we opened our digital doors as we call it, I was talking about a compensation report. Can you tell us like where are these compensation reports or how we can access them, what they provide? Like I'm assuming at least that that's a great resource for us to have when we do communicate compensation. Yeah, absolutely. And so the first thing I would say is, I'll share some of the ones that we use, but I also think it's really important for organizations to participate as well, because the more nonprofits that participate, the better data we will have, but we use some of the society for human resource management groups, they have different chapters and they have great surveys, PRM, nonprofit management survey, association ASAE has a survey, a benefit and a salary survey. All of these actually do, society for human resource management, PRM, blue water or nonprofit times is another one that we like to use. We also purchase access to different databases like the Economic Resource Institute. So there's several. Barser, Towers Watson. Yeah, those are expensive though. For a small organization, I think the Society for Human Resource Management, ASAE, PRM, blue water, those are more affordable for nonprofits. They're anywhere from like three to $500. It's even if you don't participate, it's better if you do. Some of the others like Mercer, Towers Watson, they tend to be a little bit more expensive, but also very good and have nonprofit data as well. So, you know, we don't have much time left with you, which is a shame because I have a bajillion questions, but one of my questions that has really struck me as we've been chatting is if you could give us an idea for a size of an organization when we should start really focusing in on some of these structures, because now the majority of our nonprofits in America have under 10 people. And so what does that look like? I mean, it's like a growing pain, but yet it should almost be fundamental and we should be starting this way. I mean, we, you know, at nonprofit HR, our rule of thumb is you should have at least 20 unique job descriptions. However, that doesn't mean that if you have less than that, you can't just benchmark each job individually. Create an average for that job and then you'll know the cost for that particular job. You know, as you start to get to maybe 10 or so unique roles, you can start to almost group them together a little bit. You might only have three levels. You might only have maybe associate professional, but as you start to, you know, add more jobs, you can start grouping together, but just because you have less than 10, and if you have less than 10, those are likely, everyone has a unique job. You can send multiple like hybrid jobs are doing three and four jobs at the same time. You can certainly use these data sources that I shared and at least understand for each unique job, what it pays and create an average for it. But as you start to approach 20 unique jobs, you're approaching the size that you can start to actually put a structure together where you have an average for each level. Okay, good. Thank you for answering that. And then this is kind of like one of those wrap it up. It's, is it a hopeful question? That is as a nonprofit HR professional, do you see that people are wanting to come into our sector? I mean, we are seeing such a bleed off of talent from, you know, exhaustion, compassion fatigue, aging out, retirement. Are we seeing people wanting to come back into our sector? Yes, absolutely. And I find it very positive. And, you know, we work with well over a hundred plus nonprofits and then, you know, the, my total rewards practice area and my team, we're working with about 30 nonprofits. The reason they come to us is they're growing. They don't have structures in place. I think what draws people to nonprofits is there, is there, they're sort of the value proposition that a nonprofit offers to be able to do the work that's close to your heart that you value as a human being. And there's so many missions that people care about. I think people are still coming to nonprofits. And I also think nonprofits are starting to get more competitive, you know, and realize we do need structures in place. And we need to look at our benefits and have a philosophy and we need to be more transparent about our practices. So I do think, and I feel very positive about that. Yeah. This has been just so, such a great conversation. Thank you so much. Nonprofit HR is lucky to have you, Lisa. And we are lucky to have nonprofit HR as a presenting sponsor of the show. So thank you, Lisa McEwen. It was really nice to be with you. Wonderful. Emily told you we were fun. And you were. She wasn't wrong. Well, thanks again. You know, we really appreciate having nonprofit HR on the show as a presenting sponsor. I want to say you're the third conversation we've had with the team. And every single one has just been filled with amazing, insightful wisdom and experience. So we appreciate you joining us today, Lisa. Yeah, wonderful. And happy to come back if you have more questions. Thank you. We have more questions always. I think that's like one of the curses of Jared and I. It's like a curse and a blessing because we're always like, what about this? What about that? Hey, everybody, I'm Julia Patrick. Again, I've been joined today by the nonprofit nerd herself, Jared Ransom, CEO of the Raven Group. We've been delighted to have you here. And again, we want to mention all of our sponsors who allow us to be here day in and day out. Coming up on the 300th episode of the nonprofit show is remarkable. And almost, Jared, wouldn't you say, I mean, no joke, every single show, we learn something. I mean, I'm speaking for myself. I get like a new thought. I literally have gone through so many notebooks, probably five of just the nonprofit show guest. And we keep talking about creating a download so that everyone could take notes on. I know I'm putting you, I'm throwing you under the bus because this is something we talk about often. But having a download where we can just take notes specific to the nonprofit show because every guest has just brought so much, as I said, about Lisa, wisdom and experience that is applicable, relevant, and so needed. And changing. And that's the thing. I mean, every day we're getting new information, new things that we need to know about. Wow. Hey, speaking of that, after this show, Jared, we're going to be taping our trailer, our teaser for our new show, Fundraising Events TV with Jason Champion. And so I'm really excited to be talking more about that throughout the month. So many of our nonprofits rely upon events-based fundraising or fund development. And so we really want to have a program that just is dedicated to that. That's going to launch in June, which will be very, very exciting. June is right around the corner. I know, sister. I'm like, what the heck? I'm launching June, like two weeks from now. I know. Don't say that. Now you're giving me heartburn, sister. Hey, everybody, thank you so much for joining this episode of The Nonprofit Show. We have another exciting week coming ahead. And as we like to remind everyone at the end of every show, stay well so you can do well. We'll see you back here tomorrow. Thanks, Lisa. Thank you.