Best practices to negotiate salary in the nonprofit sector
Best practices to negotiate salary in the nonprofit sector
Negotiating salary in any sector, whether public or private, can be a nerve racking process. However, the nonprofit sector can present a unique challenge as many times, organizations have a dedicated budget for specific positions. Add on the effects of the COVID-19 pandemic, where many organizations had to close their doors and furlough their staff members, negotiating salary can be difficult.
With the pandemic ongoing, what should employees expect from salary negotions? How should a nonprofit employee approach such a conversation? What happens when the negotiation does not result in an approved raise? Experts agreed that employees should approach the conversation with a game plan created through thorough research, but also acknowledged that sometimes it may be best to take on other opportunities willing to pay you your worth.
NYN Media spoke with Cassie Scarano, managing director at Koya Partners, Beverly Neufeld, president and founder of PowHer NY and David Lewis, CEO of Operations Inc. for this story.
How should nonprofit workers negotiate their salaries when many organizations have strict budgets?
Cassie Scarano: Raises are awarded for three reasons: annual cost of living adjustments (these are not specific to a particular person but should be the same percentage across every employee), performance-based and associated with a promotion. I will focus here on performance-based raises, which nonprofit employees can certainly negotiate, but it is important to be realistic. The most important advice I have for employees trying to negotiate salary is to demonstrate your value (make sure you are exceeding the expectations for your role and taking on stretch assignments), do your homework (what are people doing this same job/providing a similar level of value to their organizations being paid?) and understand the larger context of your organization’s financial health and compensation philosophy.
Beverly Neufeld: Well a non-profit, especially the smaller ones, really sometimes can't afford the same salaries that someone's colleagues might have if they're working in corporations. I think that being realistic about what nonprofits can and do pay is essential. I think the one thing you want to avoid is being underpaid relative to your co-workers. So maybe you’re paid less than someone in another industry but you want to make sure that you're paid relative to your co-workers as well as you know people who do work in the nonprofit that are doing work that is similar to you. So, I think there's a lot of ways to find out what you should be negotiating. What's the realistic negotiation range? And I think it's that information that you need to have before you go in for a negotiation.
David Lewis: In every job, there is some level of negotiation opportunity out there, especially during this historical and revolutionary time that we're living through right now where employees clearly are in the driver's seat and have a lot of choice. It's not unheard of or inappropriate in my view to try and use that new found leverage to find opportunities, the challenge with anybody in the non-profit sector is that sometimes, the answer is going to be no, sometimes the answer, especially in non-profit is going to be somewhat guilt-ridden because organizations are looking to commit the largest percentage possible of every dollar to their particular causes. On the nonprofit side, it's totally commonplace for someone who's coming forward and asking for a raise to be told, “We're trying as best as we can to serve the community. We've had to cut a number of programs. There are people that we want to help that we are unable to help. And we really just don't have the financial means right now.” A lot of times you will see that be the response. Now having said that, others might say, “I'll see what I can do. I'll see if I can get any more budget for you. I'll see what it's going to take to be able to give you a little bit more if it's at all possible.”
What are some challenges employees should anticipate when negotiating salary?
Scarano: Nonprofits often have limited budgets, cyclical cash flow, and variable annual revenue, as well as equity considerations when it comes to salaries. It is important to understand the broader context in which your organization is operating to understand what is within your supervisor’s control and what is not. This is where flexibility and creativity can come in. Perhaps your organization can’t provide a raise until a certain time in the future when restricted money becomes unrestricted, when an additional grant is received, or when the next fiscal year starts. Assuming your performance is exceeding expectations and your supervisor agrees, work together to come to an agreement that works for both you and your organization.
Neufeld: The largest challenge is getting the information that you need. What is the realistic salary range for the job? Some people are uncomfortable asking their coworkers about their salaries and they feel actually in danger, but in New York State, you are protected to talk about your salaries with other employees. You can't have equal pay unless you can figure out what other people make. I think that one of the challenges concerning negotiating salaries right now in the nonprofit world is that there has been a lot of uncertainty for nonprofits during the pandemic during these past few years and they themselves are maybe financially strapped or uncertain so that does make negotiating more difficult in a way right now. It might even be changing the nonprofit because of lack of funds. So, I think it does pose a challenge but you also have an incredible opportunity right now to get increases in salary or move on to other places that can pay you a fair wage because losing well-trained and effective staff members is really expensive and detrimental. So nonprofits certainly try to meet your salary needs. It's to the advantage of both the employee and the employer actually.
Lewis: I think the biggest challenge to start is asking, “When does that conversation occur?”
You have to read the room. Is your supervisor somebody who you feel you can have an open conversation with and have this discussion with? Do you feel or have evidence to support the idea that they're going to be empathetic? Is my hiring manager also a decision maker? Are they the ones that would make this call or not?
How does a worker begin the conversation with their hiring manager?
Scarano: The conversation should always start with job performance and building a case for how valuable your contributions are. Once it is agreed that you are contributing at a high level, then you can bring up the potential for a raise. Ideally, your supervisor is in agreement and it is a matter of negotiating how much of an adjustment and when it will happen. In a nonprofit environment, being demanding typically isn’t an effective strategy, so working together with your supervisor and demonstrating some flexibility can help get to the desired outcome.
Neufeld: Well, the first thing that you really need to do is to do your homework. That way, you're going in from a point of strength, and your homework means figuring out what your nonprofit salaries are and the range it is in, in the work that you do. You also need to go in and know what you’ve done for the organization and your value. So I think being prepared with that kind of information, sitting down with a hiring manager and saying that you'd like to talk about the work that you've been doing is a very valuable conversation. People should realize that it is valuable to have a sort of a status check conversation between the employee and employer. You need to go in with your backup for why you're asking for a salary raise. We also need to go into that conversation knowing what you need because you have to figure out what the bottom lines are for the salary increase that you need. And you all should also think about what are some other benefits you want if you can’t get an increase. What are some of the benefits that nonprofits can offer that larger companies can’t? Could they offer flexible hours? Remote work? More time off? Sometimes they can do a training advancement, so think about it as a package, not just about a number.
What should be the next step if a salary negotiation does not result in a raise?
Scarano: Any salary negotiation should be based on performance. If you don’t get a raise, make sure you know what the expectations are and what you need to demonstrate in order to be able to get a raise. This should be an ongoing conversation with your supervisor as they help you develop as a professional. If your performance is consistently exceeding expectations but you are not offered a raise or a promotion, it is time to look for other opportunities.
Lewis: The employee has to have that thought about that before they have that conversation and think through what happens. If this doesn't go the way I want it to, which way do I go? What is it that you're hoping to get out of this? This is a wild west kind of moment out there in the job market, people are coming into their bosses offices all around the country with salaries that are being presented to them that are 20 to 30% higher than what they're making right now. And the reason for that is because of some new laws that have been implemented in a multitude of states around the country that no longer allow for the employer to ask about salary history, which was being used as a gauge for what kind of offer you were getting.
You have to go into all of this with a sort of chess mentality. A good chess player is never worried about the move they just made. It's about the four or five moves they're anticipating and that they're going to make based on what their opponent is going to make.
Neufeld: Well, I think you need to evaluate why you did not get the raise. Is there something about your work product or qualifications that you should address? That's so important for you to do for your career. You also have to ask: did you make the best case? Did you have the information you needed to show your value to the company? But if the organization is unwilling or unable to give you the raise or the benefits that you need, then now is a great time to think about change. We are in the middle of a great resignation. There's a lot of opportunity in jobs that are available, but also I think employers are realizing just how important it is to retain good talent. There's a more of an understanding from the employer side that you need to be more open and transparent on salary setting and that is to the advantage of employers to do that because they create trust and loyalty. Employees feel that they are respected. If you don't feel that's the situation you are in right now, look around for another opportunity that will give you that feeling that you are a valued member of the team. One way to judge that is if an employer makes their hiring practices transparent. It's the first step that you have in the company. Do they list their salary ranges in New York City? That's going to be required.
But also, women and people of color particularly are disadvantaged when they have to negotiate. So organizations have come together to change the field so that you don't have to negotiate without information of the salary range. That's why it's so very important that we make it a common practice for an employer to be transparent about salary. That way, you know the parameters of the conversation, you have the information to negotiate wisely and everyone is on what we call an equal playing field. It's so important to change the practices of hiring and pay so that it's not up to one individual to fight the system that sometimes is unfair to women and people of color. Rather, we change the system so it's fair for anyone. That's how you change, make systemic changes that really create that equity that will reach a company and create a fair community and society. Pay equity is the goal that we try to achieve for everyone.