The attraction, selection, and retention of staff are among the most important processes managers in organizations undertake, especially in today's dynamic workforce conditions. Forecasts suggest that tomorrow's leaders are likely to have a dozen jobs or more over the course of a career, and effective organizations will need to align opportunities with dynamic career paths. The nature of work itself is rapidly changing, requiring more innovation, design, and data skills (Gillett, 2015). Millennials with these talents seek work with organizations with strong purpose and flexible work arrangements, and they are interested in working on important societal goals (Benko, Erickson, Hagel, and Wong, 2014). Forward-thinking nonprofit organizations hire staff whose talent set and education align with organizational roles, thus recruiting and keeping staff satisfied (Lee and Sabharwai, 2016). Yet designing these recruitment and retention processes requires expertise, time, and an eye toward future organizational needs, all of which can be difficult for nonprofit leaders to find given the pressures of the immediacy of running a nonprofit (Gregory and Howard, 2009). Straight out of the box human resource techniques, most of which were developed in for-profit businesses, can provide general guidance to leaders of nonprofits, but nonprofits benefit most from crafting a different kind of human resource system (Maier, Meyer, and Steinbereithner, 2016).

The purpose of this chapter is to help nonprofit executive directors and staff at all levels build a system of human resource practices that is both effective and realistic in the contexts of their own organizations. Toward this end, we have organized the chapter around two goals. Our first goal is to demonstrate the advantages of thinking systemically about the role that people play in organizations, showing how better human resource practice leads to better long-term outcomes. Not only is it possible to save time and effort in recruitment, selection, and staff retention programs, but building an effective human resource culture is key to long-term success. Our second goal is to provide an overview of the most critical human resource processes, demonstrating how they can be accomplished in settings without significant formal human resource structures and staff in place. We also discuss important legislation related to various aspects of finding and keeping the right people that enable each nonprofit to reach its own unique objectives. Although it is not possible to be comprehensive in every aspect of human resource management—volumes have been written on this subject—this chapter provides the essential knowledge necessary to find staff prospects, interview and evaluate applicants, retain and keep staff motivated, and manage the circumstances under which staff will ultimately leave the organization. The next chapter in this Handbook, prepared by Nancy Day, provides complementary information about the design and management of compensation and benefits programs.

Staff and leaders might wonder what is different about our approach to nonprofit human resources. In fact, one might simply pick up a current practitioner article on the “top ten tips for recruitment,” for example, and conclude that the answers are stated there. The difference lies in our deliberate recognition that nonprofit organizations are values-driven, and so must be their approach to human resources (Ridder and McCandless, 2010). Yet there is no universal style of nonprofit human resource management because of the variety of contexts, structures, and conditions in which social sector organizations operate. Further, there are no simple rules: contingency approaches that argue a simple set of “if…then” recommendations (for example, if an organization is in a rural area, then it must have a local recruitment strategy) are not sufficient. Outcome measures like return on investment can be useful, but they are not sufficient unless systems are considered holistically and in context. Instead, we propose that “configurational” (Toh, Morgeson, and Campion, 2008) approaches are best because they recognize that there are unique synergies gained through human resource systems and that these synergies differ depending on the context in which they exist. Executives who capitalize on the relationships among human resource approaches, the organization's environment, the mission and goals of the organization, and knowledge management principles are the ones who are successful in building momentum toward the organization's desired state, especially when the organization considers its mission in the context of other similar organizations (Koch, Galaskiewicz, and Pierson, 2015). To aid in this endeavor, throughout this chapter, we remind executives of the key questions that should be asked regarding elements of the human resource system in their organizations.

Why Emphasize Recruitment and Retention?

Given the humanistic missions of most nonprofit organizations, it is paradoxical that nonprofit leaders need to be reminded of the importance of the people in the organizations. Yet across organizations and time, multiple constituencies demand attention from nonprofit leaders. Nonprofit mission statements typically do focus on people, but people who are external to the organizations—the clients—rather than internal staff. The attention paid to internal staff issues is scant in many nonprofit settings.

The primary goal of nonprofits is typically to ensure that the organization delivers on mission. Most staff are attracted to nonprofits because they are motivated by their organization's mission. Thus, compared to their for-profit counterparts, nonprofits have an extremely powerful advantage in all aspects of their human resource systems. Studying the nonprofit workforce, Paul Light (2004, p. 7) has suggested that “the nonprofit sector survives because it has a self-exploiting workforce: wind it up and it will do more with less until it just runs out.” A 2006 American Humanics report underscored Light's findings that nonprofit employees are comparatively highly motivated, hard working, and deeply committed (Halpern, 2006), and a 2012 study by Park and Word confirmed that nonprofit employees were highly intrinsically motivated compared with both for-profit and public-sector employees. Even in treacherous economic times, the motivations of nonprofit staff are precisely what enable their organizations to thrive, if they avoid the pitfalls of adopting for-profit approaches without first considering their suitability for nonprofits (Beck, Lengnick-Hall, and Lengnick-Hall, 2008).

We emphasize here that the nature of nonprofits makes them ideally suited to maximize their outcomes through the people of the organizations. This focus on people results in additional organizational capacity, effective succession planning, engaged and motivated staff, and improved client service delivery. These are not just effectiveness outcomes; they are also the keys to the time, money, and information organizations need to survive and thrive. They also lead to reputation effects that attract staff and funders through positive profiles featured in outlets such as The Nonprofit Times' annual roundup of “Best Places to Work” (for 2015, see Hrywna) and awards given by entities like The New York Times with its Nonprofit Excellence Awards (www.npccny.org/info/awards.htm).

Successful nonprofit organizations recognize that organizational success lies in the creative engagement of the human resources of the organization. They regard human resources not as a staff function outside the organization's operation, but rather as the central conduit through which organizations succeed. They capitalize on the power of mission to attract and motivate staff. They recognize the critical nature of staff synergies in selecting new staff members. They leverage technology, where appropriate, to reduce recruitment costs and administer standardized human resource functions. They encourage diversity on many dimensions, and they enact cultures that are constituted by diverse groups working well together. They design motivation and retention systems that recognize both the intrinsic motivators that brought staff to the organization (such as mission focus or client focus) as well as the extrinsic motivators (such as pay, health care, or retirement) that are necessary for staff financial and physical health. They retain and develop talented staff whenever possible, and they manage terminations in humane and positive ways when layoffs are unavoidable.

Human Resources Is a System, Not a Set of Tasks

Our approach is a systems approach to human resources that considers the unique complement of the configuration of human resource practices. The activities of human resources cannot be thought about independent of one another, and effective leaders develop an overarching set of integrated human resource goals to guide their day-to-day decision making. Effective nonprofit managers avoid staffing decisions that come about as part of an immediate crisis, for example, needing to hire quickly to scale up and deliver on outcomes expected from additional funded projects or reacting to the sudden departure of a crucial staff person who needs to be replaced immediately. Instead, effective nonprofit organizations keep an eye on their future, anticipating stages where the mission will be broadened and additional talent will be needed, conducting succession planning to identify needs to develop internal staff before there is a crisis, and monitoring the external environment to determine what new funding sources will be coming its way.

Avoiding immediate crises can circumvent unintended long-term outcomes. For example, government contractors who consistently add and delete staff based on variable levels of program funding can inadvertently create a climate of insecurity and distrust. Organizations that vary staff levels can develop a reputation as an unstable employer, thus discouraging qualified and committed applicants to apply when new staff are needed. Individual human resource decisions, seemingly isolated, can cause reverberations inside and outside the organization, many of which may be unintended and unwanted.

Not only are human resource functions interconnected, but in the aggregate they also represent the experienced culture of the organization. The organization's human resource goals are very important because they define the day-to-day quality of work life enjoyed by staff. Because of their centrality, informed executives engage all staff in imagining their ideal collective human resource culture. In this way, they begin at the desired end. First they figure out, collectively in their organization, where they want to go. Then they do a needs assessment of their current culture of human resources, assess their planning needs, engage staff at all levels in designing human resource processes, and later evaluate their progress toward the desired end. All along the way, effective nonprofits keep in mind where they are trying to go as they take the small steps that will get them there.

Some examples will illustrate the point. Affirmative businesses (alternatively called social firms or supported employment), incorporated as or created by nonprofits, with goals of providing jobs and job training for mentally, physically, or economically disadvantaged individuals, often center human resources in their sustainability and growth plans (Bond, Drake, and Becker, 2012; Warner and Mandiberg, 2006). For vocational or training organizations serving the mentally ill or the homeless, for example, the line between clients and staff can be amorphous, and best practices suggest an integrated approach that emphasizes job design, career pathing, motivational compensation, and respect for individual choice. Organizations from New York's Housing Works Bookstore to Seattle's Boomtown Café find they can do good by doing well if they stand by all of their people.

If You Build It, They Will Come (and Stay)

There are two key concepts to keep in mind while imagining the end state of an effective nonprofit human resource system: fit and embeddedness. These two concepts make clear that, whereas successful executives design human resource systems, these systems are continually re-created by everyone associated with the organization. Therefore, in successful nonprofits, all staff are continually rebuilding their human resource culture. There is no true end result: human resource culture is a never-ending exercise in coevolution.

In two decades of studies on person-organization fit and person-job fit (Hoffman, Bynum, Piccolo, and Sutton, 2011), a consistent finding is that staff are attracted to organizations with which they perceive an alignment between the goals of the organization and their own values and objectives. This is one explanation as to why recruiting by internal referral is so successful: individuals who know insiders are much more likely to understand what the organization is about and accurately assess whether or not they would like to work there. Thus, self-selection on the part of prospective and current staff plays a huge role in shaping the ultimate human resource culture. This notion of perceived fit has been shown to apply to the person and the job, the person and the work group, and the person and the organization as a whole (Resnick, Baltes, and Shantz, 2007).

Nonprofit executives should keep in mind that these perceived fit processes are going on in all aspects of the human resource system (attracting, recruiting, selecting, retaining, and staff turnover). Perceived fit has been shown to be developed throughout the recruitment process, thus the ways in which nonprofits recruit staff is essential in attracting the right candidates (Swider, Zimmerman, and Barrick, 2015). One productive task is to engage all staff in a dialogue around what constitutes fit in their organization. Effective nonprofits work to make explicit what the fit dimensions are, beginning by examining the mission statement. A second task is to investigate perceptions of your organization held by those in similar and different organizations. Knowing how the culture of the organization is perceived by outsiders will provide key information about who might be attracted to the organization and who might be approaching staff to recruit them away. Once these dimensions are clearer, the human resource strategy of the organization can recognize the power and limitations of the notion of fit. Whether an organization makes it explicit or not, perceived fit (or lack thereof) is always an element of the human resource system success.

One important clarification needs emphasis here. Fit is not a synonym for homogeneity. Successful organizations tend to seek and engage diverse viewpoints. In fact, one might have as an element of the mission an explicit goal of nourishing a culture of diversity. In this case, fit means attracting staff who share the value of honoring difference, not attracting similar staff. Successful nonprofits shape their human resource systems around a broad and diverse set of views, using their historical, community, and mission contexts to define their diversity goals.

The second key element of an effective nonprofit human resource system is the notion of embeddedness. This refers to the extent to which the staff and their families are engaged in the organization and its community. Embeddedness is a broader concept than organization satisfaction and commitment, which have been argued to account for less than 5 percent of actual turnover. Drawing on Kurt Lewin's field theory (1951), research on embeddedness suggests that staff who are more embedded in their organizations are less likely to leave voluntarily. There are three dimensions to embeddedness: the extent to which individuals have links to other people, the extent to which their job and community fit with other aspects of their lives, and the perception of what would be lost if the individual left his or her job (Mitchell, Holtom, Lee, Sablynski, and Erez, 2001).

For successful nonprofits, embeddedness is a powerful concept. Nonprofit organizations can increase their human and social capital by remembering what embeds staff into their organizations (Holtom, Mitchell, and Lee, 2006). Not only is it desirable that staff share a passion for the organization's mission, but they must also be motivated by the way in which their role facilitates reaching part of that mission. Further, the more extensive the networks of relationships they and their families have within the organization and the community, the more likely they are to stay with the organization. Finally, the understanding of what would be lost if they left the organization (“sacrifice,” in embeddedness terms) helps leaders guide human resource systems closer to the ideal state that staff would imagine. Here a good exercise for executive directors would be to encourage open dialogue around human resource systems, eliciting from staff a shared understanding of the really unique elements of the nonprofit and the community it serves. Note that discussion of human resources includes all aspect of work, including the design of jobs themselves.

In addition to shared values, it is also important to recognize individual needs of staff, which will differ from person to person and family to family, and vary considerably by generation (Johnson and Ng, 2015; Kunreuther, 2003; McGinnis, 2011). The quality of the relationship that staff members have with leaders is a key factor in their intention to stay with the organization. Informal dialogue, or more formalized 360-degree performance appraisals systems, in which staff give constructive feedback to the executive staff (and vice versa), can help keep positive communication open across levels. Staff families matter, too. Offering cafeteria style benefits, allowing staff to choose from an array of human resource benefits what best fits their family needs, is one example of engaging with the “whole person.” Flexible work schedules might also help in this area. At a minimum, open dialogue between staff and managers must be encouraged to keep shared lines of communication open.

First Things First: Make It Legal

It is always wise to begin any discussion of the processes involved in human resource systems with a discussion of the existing law related to these human resource processes. Many nonprofit managers are unfamiliar with current legislative statutes, and the consequences of decisions that violate the law can be dire, particularly for smaller organizations without the resources to engage in lawsuits or absorb fines.

Despite a very rocky beginning at the dawn of the new Republic, The United States now has a century-long tradition of creating policy to protect workers. Starting around the turn of the 20th Century with the growth of the modern union movement, and following the 1912 shirtwaist workers' strike, the U.S. Congress created the Department of Labor (“The Labor History Timeline” of the AFL-CIO, www.aflcio.org/About/Our-History/Labor-History-Timeline). Employment law emerged in fits and starts from the Progressive Era, through the New Deal and ramped up during the civil rights movement of the 1960s around race and equity, and through advances in workplace safety in the 1970s. Employment law continues to evolve to try to keep pace with today's work issues, including expanded access to health care, religious exemptions, and the rights of transgender employees, family-friendly policies, and procedures to reduce terrorism. We shall review the essential laws that all nonprofit professionals must know, whether “human resources” is part of their job title or not.

It is important to note that nonprofits are typically held accountable for actions taken by their staff, vendors, clients, and contractors. In general, actions that managers knew about, as well as those the courts deem they should have known about, are the responsibility of the nonprofit's leadership, not the individual who committed the discriminatory action. The best defense against discrimination charges is the existence of clear policy that spells out the nature of discriminatory actions and a system through which all staff are educated about fair employment practice.

There are a variety of legislative frameworks around the world, made up of varying combinations of national, regional, and local legislation. Knowing how these levels of legislation interact in one's own country is important. For instance, the Canada Labor Code covers only 6 percent of the nation's employees, so most employment legal issues are determined by laws defined by the various provinces and territories (Labour Program, 2016: www.labour.gc.ca/eng/regulated.shtml). In the United States, by contrast, federal regulations apply to all organizations with staff above a certain size (which varies, depending on the particular law). There are also state and local laws that provide more stringent standards than the federal legislation, and each nonprofit must familiarize itself with the laws of its own state and the states in which it operates. Due to space limitations, we review only U.S. federal law here. State and local laws vary considerably, and nonprofit managers may want to keep abreast of ever-changing legal requirements both nationally and locally by following coverage in the Chronicle of Philanthropy, Nonprofit Times, Nonprofit Quarterly's Online NPQ Newswire, and the newsletters and/or websites of state or local nonprofit associations.

This section provides a general overview of the U.S. federal legislative framework, with particular emphasis on discrimination law. Using this chapter as a starting place, you may find that a user-friendly legal guide to U.S. federal employment law (such as Guerin and DelPo, 2013) can help clarify key questions. However, general legal knowledge is not to be substituted for appropriate legal advice from qualified counsel. It is always necessary to consult an attorney for specific applications to your organization.

Putting It All Together: The Processes of Human Resources

This section of the chapter reviews effective approaches to recruiting and retaining motivated nonprofit staff. We begin by reinforcing the idea of beginning with the desired end state, and we recall the concepts of fit and embeddedness. We discuss how recruitment and selection affect the culture of any nonprofit. We address legal pitfalls. Finally, we raise awareness about what elements of the organization's context must be taken into consideration.

Retention Through Motivation

Once the organization has selected the right staff and the right complement of staff to achieve organizational goals, the next (ongoing) steps involve motivating and retaining (good) people. For-profit organizations and traditional business schools have spent the better part of a century trying to understand and enact the elusive motivation of staff that brings organizational effectiveness. The good news, as we noted at the beginning of this chapter, is that motivation of staff is one area where nonprofit organizations seem to have the inherent advantage. Indeed evidence shows that mission attachment of nonprofit workers enhances their satisfaction and increases their intention to stay, especially for younger and part-time workers (Brown and Yoshioka, 2003).

Study after study has demonstrated that nonprofit employees are more engaged, more motivated, and sometimes even more satisfied in and by their work than employees in other sectors (for example, De Cooman, De Gieter, Pepermans, and Jegers, 2009). Yet turning that motivation into productivity and guarding against burnout remain confounding issues for nonprofit leaders. Developing work-life balance policies, like flexible scheduling and family leaves, is key to retaining nonprofit staff (Pitt-Catsouphes, Swanberg, Bond, and Galinsky, 2004), especially for nonprofits with more than one hundred staff members. And retaining experienced workers when pay and benefits are not competitive can be difficult. Furthermore, assuming that all nonprofits have the motivation advantage is misleading. Small nonprofits motivate employees toward goal achievement differently from larger nonprofits, and great variability in motivational techniques and organizational cultures exist across (and within) nonprofit subsectors. Indeed, motivating employees in large urban hospital systems may take a very different organizational culture and set of tools than motivating employees in a small rural community development corporation.

There are any number of theories that purport to explain how organizational actors are motivated. These include needs theories that emphasize how organizational life can help satisfy individual desires (Maslow, 1943) and process approaches like equity (Adams, 1963) and expectancy theories (Vroom, 1964), which emphasize the cognitive analyses and choices that individuals make in deciding how much exertion of effort is worth their while. These concepts have then been differentially applied by the generic management literature to construct techniques and programs aimed at increasing employee motivation and concomitant productivity. In the for-profit world, management “flavors of the month” have included the recognition of individual differences in designing motivation programs, managing by objectives (using goal setting to spur effort), basing rewards on performance, and enhancing opportunities for participation in decision making. Many of these theories and applications start with the assumption that human resources need to be aligned with organizational goals, and motivation techniques exist to do just that. (Compensation strategies and designs are discussed in depth in Chapter Twenty-Three.)

These theories and applications are variably useful to nonprofit leaders as suggested by the review work of Schepers, De Gieter, Pepermans, Du Bois, Caers, and Jegers (2005). Indeed, these authors underscore our point that nonprofit employees might be differentially motivated from for-profit employees at the same time that nonprofit employees in different subsectors may also be uniquely motivated. Robert C. Clark (2006) of the Harvard Law School is quietly shopping around his potential answer to the riddle of nonprofit motivation—a strong moral system that sustains and enhances nonprofit participation through internalized values and norms and the threat of sanctions including social disapproval and guilt.

In the end, though, it might be most helpful to reconceptualize motivation in nonprofits as part of the larger human resource system embedded within the organization's culture, always with an eye toward the power of the mission. In nonprofit (and in particular service) organizations, human resources are not so much aligned with the organization as they are the organization. Further, it is often the case that nonprofits do not have to align employee goals with organizational goals because the selection process and the draw of the mission have already done that.

For nonprofits, then, activity around motivation might best be spent nourishing an organizational culture that values all constituencies, respecting each participant's contribution to fulfillment of mission. While such motivation may be complemented by compensation and benefit programs, it is also enacted by the management of organizational symbols, rites and rituals, and affirmative events and recognition. Progressive nonprofit cultures motivate employees through fair and humane compensation and benefits but also affirm people's value and commitment to the organization's mission in an ongoing fashion.

Discharge, Layoffs, and Voluntary Turnover

Although we hope, and textbooks infer, that organizations can motivate people to stay goal-focused and loyal, we know that organizational turnover is a fact of life. Getting a handle on voluntary turnover seems especially important to nonprofit organizations that are, indeed, defined by their human resources. Costs of voluntary turnover, even in organizations not so dependent on labor, can be staggering, if not debilitating. Immediately, turnover means starting the recruiting, selecting, and even training processes all over and incurring their concomitant costs. There is also the disruption to the organization's processes, culture, and other constituents when old faces disappear.

Traditional advice to managers suggests a correlation between job satisfaction and voluntary turnover. However, many of the causes of turnover are varied and often not directly under the control of the organization. These include, most conspicuously, labor market conditions and alternative job (and life) opportunities. Recent literature has sought to explore how even these external factors might be addressed by organizational leaders eager to retain their most valued and valuable employees. A wave of literature in the for-profit sector cited earlier posits that “job embeddedness” is an even better predictor of staying the organizational course than job satisfaction, organizational commitment, job alternatives, and job search (see Mitchell, Holtom, Lee, Sablynski, and Erez, 2001). As noted earlier, these researchers define job embeddedness as a multifaceted construct that includes three core components: links between individuals and co-workers, perceptions of fit with both organization and community, and the sense of sacrifice if the position were to be relinquished.

This line of thinking takes organizational leaders out of the realm of the “at-work-only” context and suggests that leaders need to take a more holistic approach to employees' well-being. Encouraging employees' links to co-workers, boards, and clients might elevate employees' feelings of embeddedness, as would encouraging employees' connections to community activity. In many ways, these suggestions may be second-nature to leaders of community-based organizations, but their value to organizational human resources has not been so acutely supported in the past. We suggest that in the nonprofit context, job embeddedness often morphs into organizational embeddedness, which is often overlaid with a sense of community embeddedness. If organizational leaders ignore the reality of embeddedness within a job, an organization, or a community, they do so at their own peril. Conversely, finding organizationally sanctioned ways to encourage cross-linkages and social networks, as well as community involvement, will likely result in more embedded and then committed staffers and may go a long way toward supporting organization and community missions.

Particularly in economic downturns, some organizations inevitably find it necessary to lay off staff involuntarily. Inconsistent funding streams, failure to obtain grants or grant renewals, or a general downturn in demand can all lead to these difficult decisions that challenge the very fabric of a nonprofit's culture. Our general advice for downsizing (as it is bloodlessly called) is to avoid it when possible and, when it is unavoidable, to enact it mindfully. This includes careful performance-based identification of those to be eliminated, sufficient advance warning, adequate explanation of rationale, and assistance in outplacement. Perhaps paradoxically, handling these issues with a personal touch is important. Although an executive's instincts may be to avoid face-to-face conversations with those being terminated or to delegate this responsibility to staff, handling these issues openly, honestly, and directly is the best approach. Legal considerations are also important. Many downsizings target high-paid workers as a cost-cutting measure, resulting in class action lawsuits for discrimination based on age. Finally, managers also must not forget the remaining staff. Research suggests that those who retain their jobs are often haunted by stress, fatigue, and guilt.

Make or Buy? Outsourcing Human Resources

One contemporary trend is toward the outsourcing of human resource functions. For small nonprofits in particular, the attraction of delegating human resource functions to external experts may be strong: often there is little internal capacity to perform what are viewed as specialized tasks. Indeed, the outsourcing of recruitment, applicant screening, relocation services, payroll, and benefits is common in some subsectors.

Nonetheless, each organization must decide which human resource functions are core to its approach. For many organizations, this makes deciding to outsource payroll and benefits delivery (but not design) a clear choice: external vendors often have software and specialized expertise in delivering these services, and the cost can be advantageous. However, for human resource functions more central to the organization's mission, such as attracting and selecting staff, it often makes sense to keep these functions in-house. Although there can be economic benefits of scale when outsourcing recruitment and selection in small organizations, these reduced costs can sometimes also translate into loss of control of attraction of staff who fit the organization's culture. Outsourcing human resource functions that play critical roles in identifying and retaining staff who share the organization's mission are often best left inside.

One notable exception is the idea of collaborating across organizations to provide health care and retirement benefits. For small nonprofits in particular, purchasing power for health care packages and investment power for retirement are in short supply. Joining a benefits collaborative, or creating one, can dramatically decrease the cost of such services per individual employee.

When a decision to outsource is made, it is imperative to follow up with thorough management of the outsourced contracts as well as evaluation of the efficacy of those relationships after a short period. In addition to considering administrative costs, organizations are well advised to measure staff satisfaction with outsourced services.

One last outsourcing trend worth noting here is the growing industry of “rent an ED” (executive director) for nonprofits in transition. In the last decade a whole field has developed to supply transitioning nonprofits with interim executive leaders (IELs). Consulting and headhunting firms train displaced and aspiring EDs to become IELs to serve nonprofits that have been left leaderless. As talk of a coming crisis in nonprofit leadership (brought about by the en masse retirements of Baby Boomer EDs) has proliferated, so have firms, both for-profit and nonprofit, that specialize in outsourcing the ED function, at least temporarily.

Summary: Effective Human Resource Practice

If the more humanistic aspects of this chapter have been insufficient to jump-start a reluctant nonprofit human resource leader, consider this: research suggests that human costs (payroll, benefits, training, and so on) in labor-intensive nonprofit organizations can account for more than 75 percent of total costs, compared to under 15 percent in capital-intensive organizations (Macpherson, 2001). Obviously, inattention to the major resource of an organization is a recipe for trouble. And this chapter has recommended anything but inattention.

We began with the suggestion that human resources—which we define broadly as “the organization”—is usefully construed as a systems dynamic. Successful nonprofit leaders work with staff to define organizational goals around human resources as well as mission fulfillment. The parts are interconnected—breakdowns in human resource leadership (a disintegration of organizational culture, a spate of voluntary departures, and so on) will likely lead to disrupted service delivery, which can tarnish reputation, diminish the ability to acquire funds, and cause harm in myriad other ways. A smooth-running organization will devote executive-level attention to planning around human resources.

We recognize that one size does not fit all; enabling dialogue around human resource goals is highly dependent on an organization's size and life cycle (not to mention cultural and industry or subsector norms). We argue that value-creating and value-diffusing nonprofits and their component parts are well advised to engage the whole of their labor force in the human resource process at all stages of the organization's growth. Executives in different contexts will necessarily face different human resource decisions and must ask context-relevant questions. To illustrate how some of these contextual elements might play out, a sampling of how size and life cycle of the organization influence what human resource questions should be asked is presented in Table 22.2. These questions might be periodically reviewed to take stock of how well the organization is doing in developing and maintaining their human resource approach.

Certainly, some subsectors (and within subsector, particular organizations) of the nonprofit universe are marred by less than stellar labor records, and so we underscore the importance of rethinking the organization from the standpoint of those who make it work. All nonprofit leaders can be guided by the basic questions raised by this chapter, and the answers, of course, will vary: What motivates employees? What embeds them in their jobs, organizations, and communities? What laws model best practices, even when size or subsector exempt an organization? What staffing plans best support an organization's human resource goals? What recruitment and selection processes are most likely to result in an augmentation of the most laudable components of the organization's unique culture? And finally, what are all of our goals for the people of the organization?

Since the process of answering the questions is likely to be as important as the actual answers, it is through the continuous re-creation of human resource goals that an effective nonprofit human resource culture is designed.

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