Adapting Leading Talent Management Practices to the Nonprofit Sector Challenges, ideas and opportunities as highlighted at the National Human Services Assembly in March 2010.

For more information on how Accenture can help you achieve high performance, please contact:

Deborah SnyderSenior DirectorTalent and Organization Performance Practicedeborah.b.snyder@accenture.com

Martin RodgersExecutive DirectorNonprofit Groupmartin.w.rodgers@accenture.com

About National Human Services AssemblyThe National Human Services Assembly is an association of the nation’s leading national non-profits in the fields of human services and community development. NHSA peer networks like the Human Resources Council provides member executives with parallel responsibilities at different national nonprofit human service organizations to share knowledge and expertise about their work in this sector.

About Accenture NonprofitBeyond our commitment to our clients is our dedication to improving the way the world works and lives. To learn more about how Accenture can help your nonprofit organization connect its vision to its practice to improve outcomes and lives, contact nonprofitgroup@accenture.com or visit www.accenture.com/nonprofit.

About AccentureAccenture is a global management consulting, technology services and outsourcing company, with more than 181,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.58 billion for the fiscal year ended Aug. 31, 2009. Its home page is www.accenture.com.

Copyright © 2010 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Current Challenges

The Human Resources (HR) leaders who participated in the discussion wanted to know how to motivate, develop and retain their people as the country starts to emerge from the economic downturn. In the same way that for-profit companies responded to the recession, many nonprofits also implemented hiring freezes, decreased salaries, reduced benefits and eliminated training. From previous downturns and extensive research we know that employees understand short-term cost cutting measures but have high expectations for the future. With hiring across sectors starting to rebound, the HR leaders at the discussion wanted to hear specific actions to retain employees at nonprofit organizations across all levels of the workforce, from clerical and entry level to senior professionals. The specific actions discussed included:

Tying talent management to the •organization’s overall mission and objectives

Creating and implementing a rigorous •performance management process to reward and retain high performers

Recognizing talent in material and •non-material ways

These are tangible steps that nonprofit organizations can take within their budgets. Importantly, these steps, when implemented effectively, underscore the reason people choose to work for nonprofits in the first place—the compelling sense of mission and purpose. A successful nonprofit talent management strategy rewards high performers for enabling the organization’s mission.

Key Recommendations

The format of the discussion offered an opportunity for HR leaders to share ideas and experiences across a variety of organizations. A key theme that emerged from the dialogue is how leading practices from the private and government sector can be adapted to nonprofit organizations,

and vice versa. We focused on three key recommendations:

1. Link talent management efforts to the organization’s goals and objectives

During the interactive forum, employee diversity was used as an illustrative example of the importance of linking talent management efforts to the organization’s broader goals and objectives. Employee diversity is an area where nonprofit organizations were often out in front of for-profits. The nonprofit sector led the way in raising consciousness and awareness that employee diversity matters. Yet in many organizations efforts designed to promote employee diversity are still not achieving the intended outcomes. Some organizations set targets and design recruiting strategies but see little progress.

Organizations that are successfully increasing employee diversity have clarified the link in business terms. Depending upon the organization, the business case may illustrate that

Leading organizations recognize that today’s challenges require innovative solutions and bold approaches. And more specifically, Human Resources leaders are interested in concepts and practices that they can implement in a cost-effective way. Accenture’s research reveals that high performance organizations are characterized by leading talent management practices. Thus, in March 2010 Accenture joined with the National Human Services Assembly to facilitate a discussion around leading talent management practices with leaders from 25 national nonprofit organizations.

This paper presents the highlights of these conversations, synthesizes key trends and talent practices and focuses on the themes of strategic alignment to goals and metrics, structured performance management, successful talent management strategies, the value of diversity and talent development across the sector.

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donations will increase, new revenue streams will become available, there will be lower employee attrition which in turn means lower training costs, etc. Similarly, employee training is another example of a talent management approach that benefits from linkages to the organization’s goals and objectives. Leaders who are committed to training tend to see the long-term benefits of investing in their employees’ skills.

The examples of employee diversity and training are used to illustrate the broader point that successful talent management programs are viewed within the organization as business imperatives with benefits that clearly outweigh the organizational costs. Leaders get behind efforts that clearly state the problem that is going to be solved; propose an action plan; estimate the improvements that will be gained; clarify interim and long-term goals; and document what and how will be measured.

2. Create a structured performance management process that aligns individual efforts to organizational goals

Employee motivation was a key discussion point during the interactive forum. All employers find that they must address a range of performance-related challenges. High-performing employees expect challenging work and commensurate rewards. Other employees need training and mentoring to climb up the learning curve. Still others require feedback and/or interventions because they are not performing well. In the nonprofit sector, these issues can be particularly challenging because resources tend to be scarce and leaders are stretched thin.

A key mechanism that organizations use to address these challenges is implementing a structured performance management process. Building on the previous recommendation, the first step in employee performance management is to cascade organizational goals down to each employee. Set measurable goals for the overall organization. Translate these into division, department and/or team goals and then individual objectives. In this way an employee will have a clear line of sight into what he/she contributes to achieve the organization’s mission.

When cascading goals, it is important to ensure there is a consistent link to the organization’s core values. For example, at Accenture each person’s objectives are set within the context of the company’s leadership areas: value creator, business operator, and people developer. An individual must have at least one objective in each area. In this way Accenture ensures that every person is contributing to the overall organizational goals. This also prevents a “someone else will do it” mentality. As a “knowledge-worker” organization it is vitally important to Accenture that everybody recognizes that developing others is part of their job and setting objectives which cascade by leadership area is one of the ways that we achieve this.

Objective setting is a first and important step in a structured performance management process. Equally important, is measuring the outcomes. An effective process measures both “what” and “how”.What did the employee contribute? How did the employee achieve these contributions? Many organizations

measure the “what” without the “how”. By also focusing on “how,” organizations can evaluate whether their core values and principles are being upheld. An employee who met his/her objectives but did so in a way inconsistent with the organization’s values, should not be rated as a high performer.

From research and experience, HR professionals recognize that organizations should focus their efforts on retaining high performing talent, and a key success factor in achieving this is to treat employees differently based on performance. A structured performance management process provides a mechanism for rewarding employees based on their contributions to the organization.

3. Recognize high performers

High performing organizations recognize that successful talent management strategies include both big ticket and low-cost programs. Recognition programs are a tool that can often be implemented with minimal cost and in a short timeframe. During the dialogue HR leaders discussed several examples of successful, low-cost programs that employees say they value, including:

Public acknowledgement•

Recognition programs such •as framed certificates

Selection for an internal leadership •development program

Mentoring from or job •shadowing a senior leader

Attending an event or conference •on behalf of the organization

Assignment to a special •project or taskforce

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Ultimately diversity not a just a nice issue; when structured and implemented appropriately it can be an important tool in strengthening the organization’s financial position—both the top and bottom line. Diversity is part of how organizations define best people, and is part of the talent equation.

The following are key lessons that organizations have learned as they diversify their workforce:

1. Understanding why your organization is implementing a diversity program matters. The purpose will shape the scope, rate of adoption and staying power of your program.

•Organizationsthataresuccessfulintheir diversity efforts recognize that it leads to increased profitability and productivity. These organizations know that their customers/clients/partners want to see diversity in their organization (i.e. walk the walk).

•Thedefinitionofdiversityisnotuniversal. Diversity efforts focused on ethnicity and/or gender yield certain results. An expanded definition drives different programs and different results—e.g. age/generation, religion, single/married, traditional career/encore career, full time/part time, and on-site/telecommuting.

2. The road to diversity is not a straight path. As an organization, diversity is about a journey and an on-going commitment. The organization needs to be ready for diversity.For Accenture, trial and error occurred as the focus on diversity progressed. The components of the program continue to evolve based on current needs and desired goals.

Aspects of a comprehensive and evolving diversity program can include governance structures, recruiting, coaching, counseling, networking, mentoring, training, work/life programs, supplier diversity, and employee affinity groups.

3. Successful efforts design diversity into your business and operating model; diversity needs to be an integral part of who you are as an organization.

•Leadershipplaysakeyroleindrivingdiversity, and needs to show their support, both personally and on behalf of the organization.

•Diversityhastobemappedtoyouroperating model. How are you promoting diversity across all the different elements of your workforce?

•Designprinciplesinclude:

— Led by the business and supported by HR

— Top down and bottom up—It is everyone’s responsibility

— National/local/department/project level— Roll out talent/diversity programs to ensure you engage people day-to-day and organization-wide

— Formal and informal— Create both structured and self-directed opportunities for discussions of talent management and diversity, e.g conferences, forums, events, etc.

4. Diversity should be part of your organization’s DNA. Rather than have a separate program, it should be engrained in the culture. Diversity numbers, measurements, goals and data matter. Without data you cannot

measure progress, and without measurement you cannot adjust. Accenture has diversity scorecards starting at the project level on up to senior leadership levels. Examples of metrics include whether people of color are in succession plans, how many women vs. men get promoted, etc.

5. As a focus on diversity and inclusion increases, the focus and respect for individuals grow. Accenture created an effort to look at the role of women leaders on a global basis and created a curriculum that has now rolled out to the entire organization.

6. Inclusion is key. An organization can embed diversity into its business goals, make it part of the fabric, etc, but it needs to have an environment that embraces the inclusion aspect of the strategy. An organization can have a diverse workforce but not leverage it; diverse talent is often lost due to lack of opportunity and visibility. Ensure that your diverse talent (gender, ethnicity, diversity of thought, religion) is engaged in important decision-making and strategic activities in the organization on a continual basis.

Focus on diversityA successful nonprofit talent management strategy rewards high performers for enabling the organization's mission.

Flexible work arrangements are another tool that can be used by an organization as a form of recognition for high performers. An employee who has written a proposal and secured a major grant, for example, could be permitted to work from home on Fridays for the next month as a reward. However, the forum participants recognized and discussed that flexibility is a tool that if used appropriately can be applied broadly. We know from research and experience that flexibility is one of the most valued items by employees. And those organizations who are able to clearly cascade their goals down to individual employees find that they can then provide employees with flexibility while still holding them accountable for meeting their objectives.

Another low-cost and critical component of a successful talent management program is frequent, transparent communication from an organization’s leadership. Employees expect their leaders to communicate the organization’s specific goals, how employees are being measured,

Compared to for-profit companies and government entities, nonprofits are often smaller, leaner organizations and may offer limited opportunities for career advancement. This can make talent development a challenging issue because the nonprofit will invest in their employees who may then leave for career growth and take their acquired skills elsewhere.

At the interactive forum, the HR leaders discussed a new lens for considering development efforts—developing the talent of nonprofit employees can be seen as a contribution to the nonprofit sector as a whole. Often, HR professionals and leaders worry about losing individuals to other organizations; however movement both within and out of the sector can be a win. For-profit and government leaders have transferable skills that they can

and what opportunities await high performers. In general, communications are a low-cost but high impact way to motivate employees, and nonprofits, in particular, can benefit by increasing the frequency and transparency of leadership messages.

Summary

Accenture thanks the National Human Services Assembly for convening this gathering and all the leaders who participated in the discussion. The session provided a valuable occasion to understand the current landscape and see how organizations are approaching talent management challenges. These challenges create the opportunity for nonprofits to be innovative and strategic as well as cost-effective and flexible when designing employee programs, growing a diverse workforce and developing talent. HR leaders in nonprofit organizations can adapt leading talent practices from both the private and government sector to their organizations in order to achieve and sustain high performance.

share with a nonprofit and provide significant results. Also, in order to build top, well-rounded nonprofit leaders, most need to move and progress by working at several nonprofits in order to develop the right balance of skills, knowledge, and experience. Consider your organization’s talent development efforts and as the question…Are your employees developing skills that benefit the nonprofit sector as a whole?

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The bigger picture: Develop talent across the sector