Study Reveals Non-profit Pay On the Rise

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The average salary adjustment for senior executives of non-profit organizations increased by 4.6% from 2005 to 2006 according to a new study released today by Total Compensation Solutions.

This is one of the primary tactics that non-profits can use to effectively compete for staff in an increasingly competitive market place

The average salary adjustment for senior executives of non-profit organizations increased by 4.6% from 2005 to 2006 according to a new study released today by Total Compensation Solutions (TCS) a human resources consulting firm. This is a significant change in the salary adjustments of non-profit organizations and it may indicate that non-profits are reacting to the increased competition for highly qualified employees in the U.S. labor force.

The 2006/2007 Not-for-Profit Compensation Survey, conducted by TCS, compiles data on 69 unique positions found in over 380 non-profit organizations located throughout the U.S. TCS also observes a significant change in the way non-profit organizations pay their employees. In particular, non-profits are concerned about relating pay to individual performance and best practices in the market. This may be a response to increased Federal and state regulation of the industry.    

The study reports average pay levels for executives in “mission critical” and “support” departments among non-profit organizations. To view the results of the study click on the attached table.

The study concludes that non-profit organizations are compelled to pay base salaries and total cash compensation that are roughly equivalent to pay in for profit companies. “This is one of the primary tactics that non-profits can use to effectively compete for staff in an increasingly competitive market place” according to Paul Gavejian, Managing Director of TCS.

The study also reports that many non-profit organizations have adopted formal bonus plans for their senior executives. These plans use a variety of performance measures. However, executive bonuses are most often linked with operating budget variances and effectiveness of development activities. “This gives non-profits a means of rewarding executives for achieving specific strategic and tactical performance objectives” according to Gavejian, “and it helps them retain executives who might otherwise be attracted to big pay packages in the for profit world.”

Another retention device used by non-profits is a generous benefits program. Employees of non-profits typically get better health insurance benefits and wellness programs as part of their total rewards. “The for profit sector is still wrestling with significant cost increases in health benefits and continues to pass these costs on to their employees in contrast to non-profits” according to Gavejian.

Copies of the survey are available from TCS (http://www.Total-comp.com). If you have questions regarding this report, please call TCS offices at (914) 730-7300 or email questions.

Total Compensation Solutions is a human resources consulting firm dedicated to assisting clients in achieving their strategic compensation objectives. The firm uses market data to identify best practices in a variety of topical areas including: board compensation; executive, middle management and staff compensation; performance management; organization structure; health and welfare; and retirement benefits. With client interaction, TCS gathers and reports information on compensation, personnel practices and benefits and applies the most effective, market-driven solution to each organization’s unique set of circumstances. From offices in Armonk, NY and Los Angeles, CA, TCS is able to link with clients via traditional and online media. For more information about TCS, visit http://www.total-comp.com or contact us at:

Total Compensation Solutions-East

200 Business Park Drive

Suite 102

Armonk, NY 10504

Phone: (914) 730 – 7300

Fax: (914) 730 – 7303

Total Compensation Solutions-West

2156 Alcyona Drive

Suite 100

Los Angeles, CA 90068

Phone: (323) 461 – 3566

Fax: (323) 461 – 5590

Questions:

Tom Bailey – 914-730-7300

http://www.total-comp.com

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