Have you ever imagined what would happen to the organization you serve if you or another vital team member needed to step away tomorrow?
For many organizations, that question is not hypothetical.
In late 2021, 500,000 jobs were waiting to be filled in the nonprofit sector. Despite the current wave of resignations and hiring challenges (currently referred to as “The Great Resignation”), decision-makers continue to fail to prioritize succession planning.
What is succession planning?
Succession planning is the process of identifying the critical positions within your organization and developing action plans for individuals to assume those positions.
Consider the following realities:
- “More than one-third of U.S. nonprofits are in jeopardy of closing within two years because of the financial harm inflicted by the viral pandemic,” according to a study by Candid and the Center for Disaster Philanthropy.
- Considering the financial risks facing the nonprofit sector, members of an organization’s development (a.k.a. fundraising) staff are more critical than ever. However, according to NonProfitPRO, the average tenure of nonprofit development staff is approximately 18 months.
These two statistics should greatly inform the succession planning strategies of every organization seeking sustainability and success.
Succession planning covers a wide range of potential leadership scenarios, such as expected and unexpected:
- Short-term absences
- Long-term absences
- Permanent absences
Succession planning entails much more than drafting and approving a document that outlines steps the organization will take during leadership transitions.
5 Ways to Commit to Leadership Excellence
Successful succession planning requires organizations to demonstrate their commitment to leadership excellence in the following five ways:
1. IDENTIFY critical positions within the organization
Which team members (board, staff, or volunteers) fulfill roles that significantly impact daily operating, revenue streams, and direct services?
Once the initial list of high-impact leaders has been prioritized, it is crucial to connect with the individuals filling each position to complete an assessment and customized action plan.
A few of the many questions to consider include:
- Do we expect an absence in the coming 3-18 months? (If so, for how long?)
- Is your job description current and relevant? (If not, revise)
- Which top five functions of your role should we prioritize in the event of an absence?
- What skills are needed to complete the primary functions of the role?
- What important details should we know to ensure consistent, quality leadership for your role?
2. RETAIN quality team members
While nonprofit may be an organization’s tax-exempt status, it certainly should not be its operating model. A leadership retention plan is essential for continuity of services and good stewardship of resources.
In a 2021 survey conducted by Nonprofit HR, “54 % of organizations reported that they do not have a formal recruitment strategy and 71% do not have a formal recruitment budget.”
According to industry studies, employers can prevent three out of every four employee resignations.
Proactive leaders will:
- Connect with team members
- Conduct regular job satisfaction assessments
- Ensure team members feel valued
- Implement strategies to foster personal development within a positive work culture.
3. DEVELOP professional skills of team members
Lack of personal development and advancement opportunities directly contribute to turnover. Offering targeted professional development opportunities increases job satisfaction, improves performance outcomes, and creates an emerging group of leaders who can advance within the organization as positions open.
4. BUDGET for retention and recruitment
Organizations should include “retention and recruitment” line items in the annual operating budget to ensure continuity of leadership.
“Employee turnover costs can equal up to one-third of the employee’s annual salary.” Essential costs associated with filling a vacant position include but are not limited to: recruitment fees, onboarding costs, loss of productivity, opportunity costs, and cultural costs.
5. IMPLEMENT systems to share vital information and knowledge
Three simple ways to streamline communication include:
- Assign company email addresses based on the position, not the person. Community members and team members can continue to address questions to interim or new leaders without having to update contact information as frequently.
- Utilize a file-sharing system to store both historical and current files.
- Streamline communications using team management software.
While the duration of “The Great Resignation” is uncertain, nonprofits have long faced the challenges of staff turnover due to often lower salaries, lack of career development, and excessive workloads. Succession planning is particularly critical to the long-term success of nonprofit organizations. Following these five strategies for committing to leadership excellence can help your organization proactively identify critical positions and potential vacancies, recruit more effectively, and retain quality employees—the most efficient and effective way to build a dedicated team.
"This blog is an original work of the attributed author and is shared with permission via Foundant Technologies' website for informative purposes only as part of our educational content in the philanthropic sector. The views, thoughts, and opinions expressed in this text belong solely to the author and do not necessarily reflect Foundant's stance on this topic. If you have questions or comments, please reach out to our team."