Stronger organizations. More vibrant communities.
Developing fair and equitable pay in organizations is an ethical practice that contributes to a healthier, more productive workforce, better operations, and more consistent budgeting.
You can find practical tips in Installments 1-5 of this series on the right sidebar.
Now that you (the board, leadership staff and a few program managers) have reviewed the existing pay scale and wage comparability study – and talked about the desired changes that would bring about more equitable compensation for employees – you’re ready for the next steps.
Feasibility
Prioritize increasing revenue over cutting expenses – an austerity mindset has a very different psychological impact on employees.
Pooling department resources to raise more money together is also more likely to be sustained.
This process may lead back to the discussion outlined in Installment 5, and you may want to reduce some desired wages if the impact on the organization’s finances is too much all at once. First, try to increase the lowest-paid employees’ compensation to a living wage for your geographic area.
New Operating Budgets
Creating a new revenue plan is a collaborative effort between the CEO (or Executive Director), CFO (or Finance Director) and department managers, with the fiscal manager leading.
A new expense budget should include projected increases for updated salaries, increased hourly wages, overtime consideration related to classification changes, payroll taxes and fringe benefit costs – with enough detail in notes that laypeople can understand the context behind changes to various categories of expenses.
It’s usually helpful to develop a few versions of an operating budget – conservative, grounded, ambitious. This supports better planning and decision-making, and helps ensure pay increases are made in a fiscally responsible manner.
A fringe benefit cost analysis is important if a total compensation study is undertaken, and/or the benefits package will be changing enough in the coming year to affect annual budgeting.
General Notes
Payroll is the most expensive budgetary line item for most organizations, typically ranging from 40-80% of annual expenses.
Deficit budgets are not always bad. When investments are made over 1-2 years to correct a structural deficit or enhance an organization’s staffing and capacity to deliver services, it can be viewed positively by donors and funders alike.
We recommend mid-year reviews of operating budgets for all nonprofits. Revise the budget for board approval when changes are substantial.
Check back next week for the last post in this series. I’ll have tips on implementing these changes successfully, and offer additional resources from other experts.
Thanks for reading!
You made some nice points there. I looked on the internet for the subject and found most people will agree with your website.
Wow, amazing weblog structure! How lengthy have you been blogging for?
you made blogging look easy. The full glance of your website is wonderful, let alone the content!
My family always say that I am wasting my time here at web,
except I know I am getting knowledge all the time by reading such fastidious articles.
Hello to every one, since I am truly keen of reading this
webpage’s post to be updated regularly. It contains good stuff.
Do you mind if I quote a few of your articles as long as
I provide credit and sources back to your blog? My website is in the exact same area of interest as yours and my users would truly benefit from a lot
of the information you present here. Please let me know if this alright with you.
Many thanks!
Hello,
Thank you for visiting, and for asking.
You may link back to my website and blog posts.
You are free to share my ideas and content as long as you’re giving me credit for them.
If you take the ideas and further adapt them, they become your own.
Take care,
Andi
What’s up, everything is going nicely here and ofcourse every one
is sharing facts, that’s actually excellent, keep up writing.
I coᥙld not resist commenting. Exceptionally well written!
Thank you!
Hello There. I found your weblog using msn. That is a really well written article.
I’ll be sure to bookmark it and come back to read more of your helpful information. Thank you for the post.
I will certainly comeback.
What’s up to all, it’s actually a fastidious for me to visit this website, it includes valuable Information.
I am in fact grateful to the owner of this web page
who has shared this enormous article at at this time.
Wow, this paragraph is pleasant, my sister is analyzing these
things, thus I am going to let know her.
You are so cool! I do not believe I have read through anything
like that before. So good to find someone with genuine thoughts on this topic.
Seriously.. many thanks for starting this up. This site
is one thing that is required on the internet, someone with some originality!
Awesome! Its really amazing article, I have
got much clear idea concerning from this piece of writing.
I like it when folks come together and share opinions.
Great blog, continue the good work!
Wow that was odd. I just wrote an incredibly long comment but after I clicked
submit my comment didn’t show up. Grrrr… well I’m not writing all that over again.
Anyways, just wanted to say superb blog!