Honor Your Employees

They may not realize it, but the pending FLSA overtime changes that are due to take effect on December 1 represent a huge opportunity for many nonprofits.    So just what is this up side to what everyone else sees as a negative or even a threat?

Time after time, I see nonprofits looking at something that is, first and foremost, a question of ethics, but responding as if it were only a question of finances.  And that is exactly what is happening here.  When folks read the new regulations, they saw dollar signs and asked, “How can we get around these regulations so we don’t have to spend more money?”  What they should have asked is, “What are these regulations suggesting about how we value and compensate our employees?  What are they saying about what we expect of our employees?”  This approach bypasses an opportunity.

The FLSA changes offer every nonprofit the push that they need to tackle the question that so few are ever willing to ask, for the simple fact that they know it will eventually lead to needing more dollars.  That question?  How will we build an ethical, desirable, employee-supportive workplace?  This is a question that should be massaged by the board and senior leadership.  Instead, senior leaders are working to figure out how they can get as much work for as little money and avoid having to up everyone’s salaries.

A friend’s sister, who works 60 hours a week making $29,000 a year with a title that starts with “director” was told that she was being converted to an hourly employee as of December 1.  Otherwise, she, and everyone else in a similar position, would have to be paid more under the new FLSA regs, and the organization couldn’t afford to do that.  And all because the organization was against paying its employees for the work they actually did, rather than paying them just for the work the organization can afford.  Talk about cutting off your nose to spite your face!

Come  December 1, the organization will get less work from its employee, losing the 20 more hours of work per week they were getting (the extra 20 hours) for the price of only 40 hours.  And the first things that are  going to happen is that the quality of service to clients is going to drop and the employee is going to look for a job where she is appreciated and paid for the job she does—and wants to do.

For too long, nonprofits have done a lousy job of walking the walk when it comes to honoring the fact that employees truly are an organization’s most valuable asset.  For too long, nonprofits have bought the malarkey that nonprofit employees happily sacrifice salary because mission is the most treasured reward.  And, for too long, nonprofit employees have bought that same erroneous thinking.  Mission and a truly livable wage were never meant to be in opposition, but rather in unison.   Sadly, along the way, that goal got lost.  And now, the FLSA is here to help us get back on track.

Now is the perfect opportunity to do that compensation review that has been on some, but not many, nonprofits’ radar.  Now is the time to honor employees instead of pulling the rugs out from under them.  Board members:  have that conversation, rooted in your core values, about what your organization’s desired work culture should like and what it will take to get there; how it uses both intrinsic and extrinsic rewards to motivate, support and value its employees and where changes (may) need to happen; how it demonstrates its valuation of employees as much as it values its clients.

The challenge of a mission-driven business is that of always balancing the bottom line with the ability to deliver on mission promises.  Within that is the challenge of balancing the ethical treatment of employees with the bottom line, where the bottom line isn’t the knee-jerk first concern.  And for reasons beyond my kin, this is the challenge that too many avoid, even when they are being given a golden opportunity to do so.  Turning everyone into hourly employees may allow a nonprofit to comply with the letter of the law, but at the cost of selling its soul.

To learn more about the upcoming  revisions to the FLSA regulations, read the Q&A prepared by the Ezold Law firm.