Tuesday, March 19, 2013

Why Are Nonprofits So Mediocre At Hiring?

Last week had lengthy discussion with a nonprofit manager we'll call 'Cheri' concerning underperformng staff members.   As I dug deeper my thoughts turned from how to improve performance towards a more basic question: "Why did you hire them in the first place?".
I'm a big fan of GoDaddy's CEO Bob Parson's thoughts on the subject of hiring. I also adhere to the words of Ken Schiller to Hire Slow, Fire Fast.   In digging deeper with this leader, I found that in practice she was hiring fast, firing slow.  When a position would open up, the pressure to get all clients covered pressured her to get a warm body in place.  However, the personnel policies are so layered with documentation and appeal processes that it could take 6 months to terminate an outright insubordinate employee, let alone one who was just underperformng. 
  • Slow It Down.  Take your time.  I recently saw an organization post a job announcement for a deputy program manager.  Post date was February 10.  Application Deadline March 1st.  Start date April 1.    Let's see how that works out for them.
  • Bring Other Staff Members Into The Process.   Cultural fit matters. Having others from your staff involved in the screening educates the candidate about the culture of the organization as well as allow the current staff their perspective if the candidate could work with you.  One of the problem staff in Cheri's organization is a woman who came with impeccable credentials and sterling references.  However, in her previous job she basically worked alone.  In Cheri's organization she is part of a team, which quickly revealed her haughty manner and poor interpersonal skills.
  • Pay For Quality:  You get what you pay for.  If you find someone you want, be prepared to offer an above market salary.  If you don't, it's more likely that a high performer will eventually be lured away to another employer. I'm monitoring an organization recent hire of a new Executive Director, the hire left a powerful, high profile gig to follow his spouse to town.  I'm guessing his salary is 25-30% of what he made in New York City.  On the job for 1 month I suspect he's continuing to shop his resume. 
  • Check References In Depth.  Far too often the reference check is a perfunctory exercise.  Let me show you how to take it deeper.
Defective hiring processes are a major problem in nonprofits.   One bad hire can cause disruptions in the organization as well as eat up resources.   A good rule of thumb is that the cost of replacing an employee equals 30% of the salary for the position.  Thus a bad hire eats up big chunks of dough.  You can't afford the hit to the bottom line, nor the headaches which come from bad hires.