Jon Sammons, Director of Leaderstat Premier

It’s no secret that people like to be highly valued and treated fairly. However, these simple desires can quickly become complicated issues for senior living industry employers when it comes to setting proper salary and compensation. This is especially true for nonprofit organizations’ executive staff compensation. 

Stirring the complicated mix is the fact that the amount of one’s salary is usually a taboo subject, by most measures executive staff salaries vary wildly, and finding solid information about adequate salary ranges is difficult. Many senior living organizations struggle to set salaries in the ‘sweet spot’ of being neither too low to attract top talent, nor too high to attract unwanted attention from the IRS, or worse, the media. Professional compensation consulting can result in significant benefits for the organization, such as:

  • Happy staff, happy residents: The disgruntled feeling behind our childhood cries of “no fair!” is no less prevalent as adults, but typically shows itself in the form of lackluster performance and a less-than-sunny disposition. Happiness tends to trickle down from the top, and nowhere is this more important than in the senior living industry. 
  • Compensation consultants design achievement-based recognition and reward programs that link a company’s business strategy and goals to all the elements of the reward system. In other words, they make sure employees are being compensated and rewarded appropriately compared to other, similar organizations AND relative to others in the same company.
  • Staying competitive in the marketplace: High turnover is an organization killer. Compensation certainly isn’t the only reason employees leave, but it is high on most lists. Senior living facilities that consistently lose employees to competitors of similar size in similar markets would significantly benefit in the short and long-term from comprehensive compensation analysis. An employee that knows his/her compensation compares favorably with similar positions in other organizations, and proportionally well within his/her own, is much less likely to have a wandering eye.
  • Recruiting the top talent: This is an old-fashioned no-brainer, but still always a challenge in the NPO world, as budgets are tight, and donors must be assured their money is not being wasted in an exorbitant offer to land a big fish. An outside compensation consultant can provide evidence to boards, or any other outside scrutiny, that an offer is within reason, while allowing the organization to determine how big an offer can be made within budget, and within the context of top-to-bottom compensation throughout the organization.
  • Greater workforce success: The National Council of Nonprofits has guidelines to help create a compensation plan, but acknowledges that it can be difficult to find the appropriate data for comparing salaries and the process of determining the appropriate amount of salary and benefits for each position can be time consuming. Professional compensation analysts have the resources and experience to quickly assess the strengths and weaknesses of the current compensation structure, and specialize in the “apples to apples” research needed to accurately identify appropriate salary ranges. They develop solutions that ease the workload in managing ongoing salary administration processes and survey data management, avoiding the overburdening of staff; saving time and money long-term.
  • Compliance: While the IRS does not officially regulate executive salaries, it can, and does, levy fines for compensation that it deems too high. However, some protection from these fines (and accusations from the press) can be had through the IRS process of Rebuttal Presumption. To qualify, a board or compensation committee must approve the compensation plan, show that they obtained and relied upon appropriate data, and document the basis for its determination. Senior living compensation consultants can help get this process started, and provide the necessary data for documentation.

Jon Sammons is the director of LeaderStat Premier. He can be reached at [email protected]