By Mark Oppenheim
Salary survey data should come with use instructions and disclaimers, because they set incorrectly low expectations on compensation required to retain and recruit accomplished nonprofit executives. Here’s why.
Salary surveys are used when considering what it will take to attract a new person or retain a particularly valuable professional. The data is a snapshot of all who occupy a particular title at the point when data was solicited, but not all of this data is of equal relevance.
Most people included in salary surveys have suffered salary compression, and these numbers are lower than market competitive rates required to get people to move. If you want to get the people listed to move, then it stands to reason you will have to pay them more… probably 20% to 25% more after any cost of living adjustment. Most people listed in the salary survey will be employed by organizations of a different scale or with different circumstances than yours, and such data is therefore of dubious applicability. Most people are people you wouldn’t want to hire for one reason or another anyway, because they do not possess qualities you value.
If we could eliminate from salary survey data, everyone working for an org of a different scale and circumstance; then adjust all datapoints reflecting salary compression; then eliminate everyone who you wouldn’t recruit anyway… only then do you have a starting point on comp level. Compared to all data included in a salary survey, such data would likely consist entirely of outliers.
But these outliers are your real compensation comparables for retaining and recruiting new talent.
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Mark Oppenheim is a nonprofit wonk who runs nonprofit search and media organizations.
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