Hiring Professional Fundraisers

 Please note that this posting was originally written on August 6, 2006 for my previous blog, Non-Profit Concerns.

General rule of thumb number 2: You never want Mike Wallace to show up at your door with a camera crew. Yes, I know he’s retired but just because someone is changing – or hoping to change – his employment status does not change the rule. Which leads me to general rule of thumb number 1: You never want to receive a letter, call or visit from Eliot Spitzer that indicates that there may be a problem with your policies and procedures. One of the Attorney General’s pet peeves is non-profits that don’t have ethical standards when it comes to their fundraising.

Just look at his website – http://www.oag.ny.us – and click on “Charities” under “Ensuring the Integrity of Public Institutions.” It’s first on the list. And the list is not in alphabetical order. “Charities” comes before “Broker-Dealers, Advisers, Investors and Securities,” “Franchise and Business Opportunities,” “Lawyer’s Page,” “Opinions of the Attorney General,” “Real Estate,” and “Telecommunications & Energy.” The man takes charities seriously. And you should take him seriously as well.

If you have not reviewed the website, review it! Scroll down and before you spend money on fundraisers, spend time reading the reports under “Pennies for Charities.” Here’s how it works:

You are a charity. You have thousands of donors. For sake of argument, 5% have not made a donation this year. The campaign is coming to an end. You do not want to lose them so you hire a fundraising telemarketing firm to solicit them. They have 500 donors to contact. They do an excellent job and reach 400, obtaining contributions from 350. Well done. Congratulations! Problem is that you are paying them either a flat fee per call, or a flat fee per donation received, or a flat fee per hour and mathematically that means that since these are probably relatively small gifts, the telemarketer keeps the lion’s share. Here’s what the AG reported in 2005:

“A total of $170.6 million was raised on behalf of 440 charities in 2004 by the 555 telemarketing campaigns covered in this report. The $170.6 million includes funds raised in New York and other states during telemarketing campaigns on behalf of charitable organizations registered to solicit contributions in New York. Charities retained $63.5 million, or 37.24 percent, of the funds raised by telemarketers registered to solicit contributions in New York in 2004. While some charities received more, many received less that 37.24 percent, and some received nothing at all. The remainder – $107.1 million – was paid to fundraisers for fees and/or used to cover the costs of conducting the campaigns.”

From the perspective of the charity the situation is like this. We raise millions. The telemarketing campaign is only a small percentage of funds received. We don’t want to lose these donors. So while we may actually only be bringing in a few pennies on the dollar, as part of the overall campaign, this is insignificant. Our overall fundraising costs are still well below the 35% that the Better Business Bureau says is the maximum that a charity should spend on its fundraising efforts. In fact, this is not really fundraising; it’s more like PR.

As far as it goes, the charity is correct. So how do you make certain there is no issue with the AG. Have the telemarketer say the following: Good evening Mrs. Smith. I’m calling on behalf of the XYZ Fund. We want to thank you for your past support. Last year you were kind enough to donate $15.00. Can we put you down for an $18.00 donation this year, with $15.00 going to pay my expenses as a telemarketer and $3.00 going to the Fund?

Full disclosure is what is required. Read the report. The African Wildlife Foundation received –40.20% of the money it raised from one of its campaigns. (In other words, it cost them $1.40 to raise $1.00!) On the other hand, the Association of Graduates of the US Military Academy received 93.70% of their telemarketing efforts. (They paid six cents for every dollar raised!) If your campaign is closer to Africa than West Point, don’t do it. After all, is it really worth it if donors find out what you actually did with their money?

This does not mean that you should not engage professional fundraising services if you cannot afford to have your own development office, or if you need to supplement their activities. Just make certain that whomever you hire is properly registered with the Charities Bureau of the Attorney General’s office. There are four types of professional fundraisers:

A “Professional Fund Raiser” (PFR) is someone who is contracted to plan or run a fundraising campaign, solicit potential donors, or advertise goods or services for the benefit of a charity. A “Professional Solicitor” (PS) is employed by a PFR to solicit donations. A “Fund Raising Counsel” (FRC) is contracted to plan or run a fundraising campaign but does not solicit funds and does not have any access to funds received. Finally, there is the “Commercial Co-Venturer” (CCV) which is defined as, “Any person who for profit is regularly and primarily engaged in trade or commerce other than in connection with the raising of funds or any other thing of value for a charitable organization and who advertises that the purchase or use of goods, services, entertainment, or any other thing of value will benefit a charitable organization.” While a PS, FRC and CCV must be registered with the Charities Bureau, a PFR must also be bonded. It is the responsibility of the charity to make certain that any professional fundraiser hired is registered, and the responsibility of the professional fundraiser to file copies of any contracts/reports with the Bureau.

The exact requirements can be found in form CHAR009 (www.oag.state.ny.us/charities/ forms/char009.pdf). Simply stated, a charity that requires someone to advise them on its fundraising activities, write grants, plan special events, etc., only requires a Fund Raising Counsel. If, however, the charity needs someone to actually ask for donations, collect monies and issue receipts, it would then have to hire a Professional Fund Raiser.

Paid staff, volunteers and board members are not required to be registered or bonded if involved with fundraising activities. The best telemarketers are in fact those same volunteers and board members because they are motivated by passion, while some telemarketers are apparently only motivated by profit.

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Recruiting and Retaining Top Professionals: The Art of Differentiation

Please note that this posting was originally written on December 25, 2006 for my previous blog Non-Profit Concerns.

(The following was prepared for presentation at the 2006 Solomon Schechter Day School Association Biennial Conference, December 11, 2006, Boca Raton, Florida.)

Good afternoon.

This afternoon we are going to answer two interconnected questions: First, why should you hire a specific candidate for any position at your school? And, second, why should a candidate want to work for you?

The way we answer those questions will lead you to a way to differentiate yourself from the competition. And just to make it clear, the nice people sitting around you, your colleagues from other schools, they’re you’re competition! Throughout my presentation I will be suggesting a reading list. One book that you should read – although the title says it all – is Jack Trout’s Differentiate or Die: Survival in Our Era of Killer Competition.

I’ll just quote two sentences from the jacket cover. “For marketers, differentiating products today is more challenging than at any time in history – yet it remains at the heart of successful marketing. More importantly, it remains the key to a company’s survival.” Make no doubt about it; your schools are companies. And remember, your students’ first example of how a company/organization runs, is your school!

For sake of argument, we’ll be talking about hiring a new principal. But everything that I will say during our time together is equally applicable to anyone else from the custodian all the way down to the head of school, principal or executive director.

Before we begin I just want to remind you of one thing that you all know. An interview is a two-way street. The crucial component from the perspective of the candidate is the way you conduct the interview, which includes how that candidate is received and treated. The way you reach your decision about hiring her, will tell her how she will be expected to make decisions at your school.

Do you procrastinate? Do you keep her informed as the process proceeds? Do you need an excessive number of people to interview her? Everything you do begs the question, Is this how all decisions are made? That can be a positive or a negative question. If it’s negative, you won’t get a star to work for you.

Additionally, before you even begin the hiring process, ask yourself this question: Why are you hiring anyone for the position? Are you trying to fill a chair? Are you looking for someone who will continue where her predecessor left off? Or are you going to use the opportunity to hire someone who has no loyalty to your history and will move you to a new level without carrying the burden of your past?

In his book Only the Paranoid Survive. Andrew Grove, chairman of the Board of Intel, identifies this as “a key point.” He writes, “The replacement of corporate heads is far more motivated by the need to bring in someone who is not invested in the past than to get somebody who is a better manager or a better leader in other ways.” Take his advice. He knows of what he speaks. Don’t just look for a new model of what you had. View all hirings as opportunities for fundamental change. That does not mean that the past was bad. All it means is that the future will require something different. Just as the technology you use must be constantly updated, so too must your management philosophy and approach.

Let’s get started.

First question: Why should you hire a specific candidate to be principal of your school?

You tell me. What are you looking for? What are the top two or three concerns about which you ask a perspective candidate?

· Advanced academic/administrative credentials
· Experience administering educational institution
· Familiarity with level of instruction and current trends in education
· Staff development
· Curriculum development
· Human Resources
· Teaching experience
· Administrative experience
· Statistics: size of school, teacher/student ratio, graduation rate, percentage of students going on to ivy league colleges
· Fundraising experience
· Budget control/cost cutting
· Expected/desired compensation package

If those are your key concerns around your questioning, then you have a guaranteed formula for mediocrity. All of those issues are secondary. What I am now going to present are the main issues that you must address if you want to differentiate yourself from the crowd. And remember, your questions are half of what will differentiate you; the other half are your answers to the candidates questions.

Without exception, every successful company owes its success to the fact that it holds all of its employees accountable. GE is a success because GE’s executives are accountable for their decisions. Enron was a failure – to put it mildly – because its executives were accountable to no one.

All employees need three things to be successful – responsibilities, authority to carry out those responsibilities, and most importantly, accountability, to their supervisors, to their peers, to themselves and to their stakeholders.

If you have not done so yet, read Gary Neilson and Bruce Pasternack’s book, Results: Keep What’s Good, Fix What’s Wrong and Unlock Great Performance. While they mainly use examples from the corporate world, one of their case studies is of the Special Olympics, which, they emphasize, is an excellent organization that just needed some improvements.

What was improvement number one? What they refer to as “decision rights,” meaning who has the responsibility and authority for what decisions, were, and I quote, “Unclear, both in terms of accountability and process. People did not understand what they were accountable for and how they were being measured.”

Following their reorganization, Special Olympics instituted, and again I quote, “a rigorous performance measurement system that reinforces accountability and control at all levels.”

The same, of course, is true in the corporate world when reorganizations are called for. Caterpillar had the second highest shareholder return among companies on the Dow Jones Industrial Index in 2003. The Financial Times named it the 27th most respected company in the world. And in 2005, Forbes magazine listed it as the best-managed industrial corporation in America. So what did Caterpillar do after it survived losing a billion dollars in the first half of the 1980s and once again became profitable? It reorganized. And what was the first step in that reorganization? To quote from Neilson and Pasternack, “It moved accountability dramatically downward in their organization by reorganizing Caterpillar into ‘accountable’ business units that would have P&L statements and be judged on divisional profitability.” The results? From a $2.4 billion loss in 1992, to $2 billion in profits in 2004. From $10.2 billion in revenues in 1992, to $30.3 billion in 2004.

Of course, that’s on the company-wide level. What about the individual toward the bottom of the organizational chart? Jim Despain headed Caterpillar’s manufacturing operations in East Peoria. He recalled the following incident after the reorganization:

“When people feel accountable, they do wonderful things, if they really are accountable. I’ll never forget, it was down in the fabrication buildings where all the really tough guys hang out, the welders.

“One of the more cooperative people down there was given some responsibility to look at saving money in the weld-repair area. We had this little red lens that you put on the eye of the welding robot so the robot can follow the weld route. And we burned those up pretty quickly, because the fire was hitting them with pellets all the time. These lenses were costing us sixty-two dollars apiece, and he found a way to make them in our own tool room here for six cents. Sixty-two dollars to six cents. And there were many other things the same way.”

The bottom line for Despain’s division was that it became profitable in 1995, for the first time since 1990, when the reorganization went into effect. The number of employees dropped from 4,500 to 2,000. As he remembered, “We never invested a dime in more technology, never did any outsourcing. We just changed the way people worked together. They were putting their own creativity into the opportunities they were provided. They forgot about themselves and started looking at the bigger picture.”

Accountability works!

So the first question for your candidate is, How do you hold staff accountable? What do you do when an employee refuses to be held accountable? How do you reward accountability? How do you hold yourself accountable? To whom do you feel you are accountable?

Accountability is first. Mission is second.

Read Jim Collins’s books, Built to Last: Successful Habits of Visionary Companies and Good to Great: Why Some Companies Make the Leap…And Others Don’t. Also read Bill George’s autobiography (he’s the former chairman and CEO of Medtronic), Authentic Leadership: Rediscovering The Secrets to Creating Lasting Value.

I’m going to spoil the ending for you. The key is that all decisions are based on the companies’ mission statements. If a company lives by its mission statement it can make the tough decisions, survive, and grow to greatness.

Remember in 1982 when you couldn’t buy Tylenol? Johnson & Johnson’s mission is to place the priority of the health of its customers above all else. So what to do when containers of Tylenol are poisoned in Chicago and the next day your stock price plunges 20% and you lose $2 billion in company value? Launch a nation-wide advertising campaign pointing out that the cyanide did not come from your plants, that it was an isolated incident of an individual madman, and that the product is safe. Of course that is not what mission-driven Johnson & Johnson did. They pulled Tylenol from the shelves and took a $240 million hit! As their credo states, “We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.” That’s why their CEO was praised, not condemned, for the decision.

Ever hear of river blindness? Scientists at Merck found the cure for the disease that was decimating the lives of Africans. On average it costs $200 million and takes 12 years to develop a drug. In this case just to market Mectizan, as the cure was named, was expected to cost $2 million in its first year for distribution alone. It was estimated that the annual bill for producing and distributing the drug would be $20 million. The $3 price tag per pill was too high for anyone with the disease to pay. No government or international organization was willing to pick up the tab. What to do? Quote: “The mission of Merck & Co., Inc., is to provide society with superior products and services.” Merck gives the drug away for free. Every year it takes a multi-million dollar hit so that thousands of Africans can see. Again, the decision was praised by shareholders.

Of course cynics will say that Johnson & Johnson had no choice but to pull Tylenol from the shelves because no one would buy the product. And Merck may be losing millions on Mectizan but it gains untold millions from good press and good will. But having a moral foundation to one’s decisions is good business.

To quote Bill George, the purpose of his book is “to show all leaders… that there is a better way to lead than we have seen in the past decade – by pursuing your mission, living by your values, and getting superior results for all stakeholders.”

George describes Medtronic as “a mission-driven company.” The mission statement that the company’s founder, Earl Bakken, wrote was “to restore people to fuller lives.” The full mission statement is literally plastered throughout the company, and a regular topic of discussion among employees.

Bakken wrote the mission statement in 1962. Five years earlier the company had created the first pacemaker. On the verge of bankruptcy the company’s board of directors urged Bakken to write the company’s mission statement. “It gave the company a clear purpose and focus. Within three months the company turned profitable and has been so ever since.”

According to George, “the best-kept secret in business is that mission-driven companies create far more shareholder value than do financially driven firms.” (During his tenure at Medtronic, George “created $60 billion in shareholder value!”)

So what is the second question you ask your candidate? How does the mission statement of your present employer impact your decision making? Ask what the mission statement is. If she doesn’t know it, don’t hire her! Is this someone who just talks the talk or does she also walk the talk?

So we have accountability and we have adherence to a mission statement.

Here’s another book for you to read. In Search of Excellence: Lessons from America’s Best Run Companies, by Thomas Peters.

And I’ll spoil the ending for you again:

“The excellent companies seem to have developed cultures that have incorporated the values and practices of the great leaders and thus those shared values can be seen to survive for decades after the passing of the original guru. … it appears that the real role of the chief executive is to manage the values of the organization.”

Values-centric decision making is the only effective type of decision making. Case in point, the Four Seasons. Neilson and Pasternack quote the chain’s Regional Vice President, Stan Bromley, as follows:

“We advise all staff to make sure that every decision they make squares with our goals, beliefs and values … and they honor that obligation, because they feel they are respected. If we were seen as only caring about profits and prestige, rather than our customers and employees, they would not believe in our values, and we would be communications across a trust gap.”

And for the record, he was not talking just about managers. He was talking about housekeepers, bus boys, and bell hops as much as anyone else. And that’s why the Four Seasons is the Four Seasons and not Motel 6 (which, I hasten to add, I have frequented far more often than a Four Seasons!).

If you have a position that needs to be filled and you are looking for someone to fill that position, make certain that you have clear guidelines for what to do in case your school goes out of business, because it will. Never hire for today. Always hire for the future. That means the individual must leave a legacy. To do so she must be respected. To be respected she must have values.

Never forget, in every candidate you are looking to hire, you are looking for a leader. There is only one definition of a leader; all others are just a description of the attributes of leadership. I think I am quoting Peter Drucker, “A leader is someone with followers.” And not followers by coercion; but followers by conviction. And the only way someone earns followers, is by displaying admirable personal qualities. In other words, he has to have values.

So the third question for the candidate is, What are your values? How do they impact your decision making? Give us an example of a decision that you made which was not necessarily in your self-interest but was in the best interest of your school.
Accountability. Mission Statement. Values.

Hand-in-had with values goes ethics. And this leads to the issue of transparency. Accordingly, this is the one place in the interview where you have to volunteer sensitive information. And, when it comes time for the candidate to ask questions, you have to be forthcoming. (And, not to get ahead of myself, a key to your decision about whether or not to hire someone should be based in part on the questions that the candidate asks!)

Who are your stakeholders? How do you share information with them? Are staff, students, parents and donors invited to board meetings? If so, why? If not, why not? Do you issue an annual report? Do you invite dialogue with your stakeholders? How transparent are you?

Now it’s the candidate’s turn. Question number 4: How transparent is your decision making? Do you share the rationale behind your decisions with stakeholders? Which decisions? Which stakeholders? Why or why not? Do you invite dialogue throughout the decision making process? Or do you guide the so-called decision makers to the decision that you wanted all along? How do you implement decisions? What level of credibility do you have when you make a decision? And if this sounds like accountability, it is!

And thus from accountability, to mission statement, to values and ethics we arrive at transparency and return back to our start, accountability.

But let’s stay with transparency for a little while longer.

When someone has a success it is critical that it be shared with others. It’s called “best practices.” It’s important to explore with a candidate how she relates to best practices.

The other side of the best practices coin is failure. We all do it! Bill Cahill, the head of human resources at FedEx goes so far as to say that “success is when you learn from your failures.”

How much failure do you encourage? Do you let your staff try new things? Do you celebrate the attempt, regardless of the results? Do you see failure as a learning experience? At IBM a manager was given $10 million to start a new program. After a year the attempt was a total failure. He went to his boss and offered his resignation. His boss refused to accept it on the grounds that they had just spent $10 million educating him!

So our fifth question is, What is your experience with best practices and failures? Does one department share amongst itself? Does it share with some other departments? Does it share with the entire staff? And does the school share with other schools? When it comes to failures, how do you encourage risk taking? When do you pull the plug on a failed project?

Accountability. Mission Statement. Values. Ethics. Transparency. Best Practices.

Of course, the most important best practice is the one concerned with the industry of which we are all apart: customer service. If you don’t treat your customers well, you will be out of business.

Former GE CEO Jack Welch made many things famous, not least of which is the quality assurance program knows as Six Sigma. In the September 2005 issue of Fast Company, Martin Kihn explained it in the following terms:

“Sigma is the Greek symbol used to denote deviations from the mean. And so Six Sigma is essentially a set of procedures and tools designed to measure and analyze ‘defects’ in a process and help determine what’s causing them. The goal – the ‘six sigma’ part – is 3.4 defects per million, or 99.997% perfection.” (Don’t ask me to explain the math!)

Ever wonder how the Japanese took over TV, stereo, electronics and automobile production from us? In the US manufacturers were willing to accept 5% rejects per million. In other words, for every 1 million anything that was “Made in America,” 50,000 would be no good. The Japanese lowered that number to 200 and gained industrial leadership. As Jay Levinson notes in Guerilla Marketing, “Every error that could possibly be construed as a mistake was noticed by people actually hired by industry to count mistakes. In the category of mistakes included shoddy workmanship, tardiness, breaks that lasted too long, minor flaws in detail work, low morale, and anything at all that impeded production.”

Yes, this is relevant to you. You also produce a product: students. Your students are your widgets. So how many errors does your organization make? How can you implement a Six Sigma program at your agency?

How often do you send out a mailer that is improperly folded? How many of your employees arrive at work late (begin the day eating breakfast) and leave as the clock strikes five? How often do staff go out shopping on their lunch hour and return, purchases and food in hand, and then take an additional 20 minutes to actually eat lunch? How many typos are there in your publications? How proud are your staff of where they work? How much bureaucracy do you have which stifles creativity?

J. Edgar Hoover had a rule that phones had to be answered by the third ring. If I call your offices, how long is it going to take for the phone to be answered – dare I dream? – by a real person?

How long does it take for a receipt to be sent to a donor? How long does it take for a stock donation letter to arrive?

The key to customer service is recognizing who your clients are. And in a way, the key is not forgetting that your clients are really your bosses.

When working at a nursing home, a colleague and I (she was the admissions director and I was the director of development), made a presentation at the Greater New York Hospital Association. In passing she mentioned something about working closely with hospital discharge planners and I said something about having stories about the home appear regularly in the local newspapers. They were just passing remarks of seemingly no great importance.

After the formal presentation was over, she was asked how long it took her to respond to a request from a hospital discharge planner for a bed. She said about 10 minutes. I was asked how often stories about the home appeared in the newspapers. On average it was 15 times a month.

Our colleagues were shocked. And so were we because we did not think these were special results. One discharge planner said that he was happy if he got a response for a request for a bed at a nursing home within two days. One community relations director said that her boss was thrilled if she got them into the paper once a month. They wanted to know the secret:

There is a saying in the Talmud, “Know before whom you stand.” In other words, know who your clients are.

The nursing home where we worked was a good nursing home. It had been before the new admissions director arrived, and was after she arrived. But her predecessor could only keep the occupancy rate a few points above 90%. The new director had us at 99%. Same nurses, same certified nurse assistants, same doctors, same therapists, same housekeepers, same maintenance staff, same food, same everything. What was the difference? Her predecessor felt that her clients were the potential residents and family members. The new director saw the discharge planners as her clients. Instead of going to the hospitals to interview patients, family members, doctors and nurses, she stayed at her desk to answer the phone when the discharge planners called.

As for press coverage, colleagues at other facilities told me that their bosses had them sending out long press releases going into great detail about this, that, or the other thing that was happening at their facilities. For them, their bosses were their clients. Not for me. I explained to the boss that we had little control over what actually happens to our press releases. The longer they were, the more editing would be needed and the more mistakes would be made at the newspaper. So all I would do is send out a 3 to 4 paragraph press release with a photo. Basically, they were fillers – photos with long captions. That is what my clients, the newspaper editors, wanted. And what my boss really wanted was to see the home recognized in the press.

Remember, if you are an employee, your clients are not necessarily your supervisors and board members. They are only the ones who hire and fire you! Your real clients are the persons who allow you to succeed at your work. They may be donors. They may be hospital discharge planners. They may be newspaper editors. They may be politicians. They may be organization members. They may be vendors. And, of course, they most definitely are your parents and students. A client is anyone who utilizes your services and they are the ones whose cooperation you need. Whoever they are, if you keep your clients happy, your bosses will also be happy. And the secret to doing that is quality assurance.

So the next question for your by now exhausted candidate is, What do you do to assure the quality of your services? How do you minimize errors? How do you deal with a disgruntled stakeholder?

Accountability. Mission Statement. Values. Ethics. Transparency. Best Practices. Quality Assurance.

Finally, it is a fact, not a truism, that the most important resource of any organization is its human resources, its staff. The candidate should be a personal example of professional development. So here the final question is easy:

What is the difference between your job description today and when you first got the position? If it has not changed, don’t hire him! And, What do you do to assure the professional development of staff? This does not just mean traditional staff development: holding seminars and the like. And this is something that schools are uniquely qualified to exploit: mentoring.

When was the last time you assigned a student to mentor a teacher or administrator at your school? Companies do it all the time. Junior staffers mentor senior staffers. If memory serves, Jack Welch had an intern teach him how to use the Internet. He learnt about the Web and, while talking with her, about her perspectives of GE. She received an education that money truly could not buy: seeing the view (literally, but more importantly, figuratively) from the head office.

The two most important jobs of a CEO are succession and hiring the right people. As Jim Collins puts it, if you don’t have the right people on the bus, you will not get where you’re going. And if, as CEO you do not identify and train – and see to it that everyone else does as well – your successor, then what is going to happen when you leave? Will the place fall apart? It happens everyday.

So a final, final question for your now comatose candidate is, How do you go about hiring the best people and keeping them? Do you interview, or at least meet, all candidates for all positions? If not, which ones don’t you? Are there any new hires that you do not interview? When you leave your job is there anyone who can take over? Did you train her? If there is no one, why not?

Now we come to our second issue. Why should the candidate want to work for you?
What’s your sales pitch?

Why should anyone want to work for you?

1. Your Board is committed to the future of the school and the success of all hires, first and foremost the principal.
2. Admissions are rising steadily over the past decade and are projected to continue.
3. You have a state-of-the-art facility.
4. Your teachers come from the finest institutions.
5. You have the largest library for a private school in the county.
6. Your students have the highest average GPA of any other school in the state.
7. Your students win numerous awards in local, regional, state and national competitions.
8. More of your students are accepted to ivy league universities than any other private school in the state.
9. Your teachers are paid a highly competitive salary and have a benefits package second to none, including paid sabbatical leave.

If you want the best you have to appeal to them on a different level. The following four-part justification for why anyone should want to work for you will differentiate you from your competition:

First, what is your employee turnover rate? If it’s low, that means you have good professional and lay leadership. Your best ambassadors are your staff. If they stay that tells the prospective employee everything he needs to know.

Second, show that you have the right people in the right jobs. Granted, this is a logical extension from the previous point. However, emphasize it. Show how all departments work as teams. Give concrete examples of professional growth. Mention promotions and expanded job descriptions.

Third, revisit the issue of values. As we have seen, the greatest companies are those that place values above all else. The most successful companies are those that have a track record of values-based decision making. They live their mission statements. Give examples of why that is true for you.

Fourth, risk taking. Celebrate mistakes and failures. The FAA rewards pilots who immediately inform on themselves when they make an error. Pilots actually carry the “self-reporting” form in their flight kits. There are 3,000 such reports filed every month, and 150,000 subscribers to NASA’s monthly newsletter, Callback, read about the most important ones. Residents at the Mayo Clinic publish on an internal blog their errors. The US Department of Energy has a “lessons learned” database for contractors. And, of course, the Marine Corp has a culture of celebrating honesty in admitting mistakes.

So what mistakes and failures can you celebrate with a prospective employee? Just imagine the individual’s shock of hearing about the chances that you allow your staff to take, fail at, and then move on having learned and benefited from the experience. That’s differentiation!

Thank you for attending, for your participation, and for your attention.

Internships

The following is the text of my June 6th broadcast on Bruce Hurwitz Presents.

Today’s program is the first in a restructured show.  In order to expand listenership and to offer opportunities to individuals starting their careers, I’ve reformulated the program’s structure and divided it into four different forums.

The Ph.D. Forum will introduce listeners to doctoral and post-doctoral students, giving them an opportunity to discuss what, by definition, is cutting-edge research, be it in the arts, sciences or humanities.  Starting off the Ph.D. Forum will be Jason Sole, from Capella University, who is an expert on gangs.  He’ll be appearing at 11 AM on June 21.  On June 23 at 5 PM I’ll be joined by Neal Ramer from Ryokan College.  We’ll be discussing coping with depression – something of which the long-time unemployed know only too well.  And the next day, June 24, at 10:30 AM I’ll be interviewing Christopher Morrissey from the University of Notre Dame on the influence of religion on war and peace.

The second Forum, Business Forum, will feature guests from the for-profit and non-profit sectors talking about their careers and professions.  Two guests who I have yet to schedule but who I am confident will be on, will both be discussing various aspects of career growth.  One, a Ph.D. himself, will be speaking about changing careers.  Check out my website homepage, http://www.hsstaffing.com, for updates.

The third Forum, Social Forum, will deal with current events.  The lead-off show will be June 16 at 11:30 AM.  Its focus is on health care and specifically insurance companies and the pharmaceutical industry.  The impetus for the program was an incident with my health insurance provider, EmblemHealth, and their on-line pharmacy, Medco.  Suffice it to say that I have invited numerous members of Congress, as well as a representative of the New Jersey Attorney General’s Office to participate, along with representatives from EmblemHealth and Medco.  The title of the show, “Are EmblemHealth and Medco Fixing Prices and Violating the Law?” pretty much says it all.  I hope you’ll be able to join us for what I am certain will be an energized show.

In fact, it will not only be energized, it will be the first in a series of programs dedicated to the pharmaceutical industry.  Again, check out my website for updates.

Finally, the fourth Forum, Oral Essays, features talks by me on various topics.  Today’s broadcast is obviously the first and I’ll be discussing Internships.  On June 14 at 11 AM I’ll be speaking on conducting a successful job search, and on June 30 at 10 AM on obtaining and profiting from free PR in business and employment.  I hope you’ll be able to join me and, as always, questions from callers will be welcome.

Which brings me today’s program on Internships.  If you have any questions feel free to call in.  The number is 323-792-2978.  I’ll also be glancing at the chat room.  If you have any questions, you can post them there.   I’ll take questions at the end of the presentation which will last just under 15 minutes.

With the onset of summer and vacation season it seems timely to discuss internships.  Of course, students should have arranged their internships long ago.  However, there is much for both students and employers to keep in mind.

First, for employers, do they have to pay interns?  And second, for interns, why are internships important and how can they assure a successful experience?

So the first question is, Do interns have to be paid?  And I begin with the standard disclaimer:  I am not an attorney and employers should discuss this with their attorney or financial advisor.

But it’s a simple question.  Do employers have to pay interns?  After all, they are affectionately referred to as “slave labor.”  Since this deals with Federal government regulations the answer is simple, Yes and no.

I am basing my answer on Fact Sheet #71, titled “Internship Programs Under The Fair Labor Standards Act,” put out by the U.S. Department of Labor’s Wage and Hour Division.  And I must add, employers need to check on the regulations of their individual states as well.  But I’m going to focus here on the Feds.

First, the regulations deal with, and I quote, “Internships in the ‘for-profit’ private sector.”  That’s important because an intern at a non-profit will no doubt be classified as a volunteer.  Volunteers, by definition, do not have to be paid.  Before becoming an executive recruiter and career counselor I had worked at non-profits in the US for well-over a decade.  We had volunteers doing real work.  There were security guards at a nursing home.  There were seniors helping with mailings.  And there were board and committee members offering substantive advice which, under different circumstances, would have constituted consulting services.  None was paid.  None had to be.

So were are speaking about for-profits.  According to the Supreme Court, if the work being done only serves the interest of the person doing the work, then that person is not an employee.  For example, if the individual wants to learn IT administration and an IT company grants them an internship, if the owner of the company, or one of his or her employees, takes the intern along with him and shows her, the intern, what the work is like and actually permits her to do some work, under his supervision, the employer is not benefitting.  In fact, the employer is losing.  Why?  Because he would get the job done a lot faster if he did not have to explain everything to the intern.

Another example might be at an accounting firm where the intern is being trained in what she has studied in school.  Let’s keep it simple and say she learned QuickBooks.  At the accounting firm the owner is allowing her to enter data using QuickBooks.  After she’s finished, someone has to double check what she did, a step that would not be necessary had an employee actually done the work.  So, again, the employer is losing.

There are, in fact, six criteria which must apply if the employer is to be free from paying the intern:

First, even if real work is being done, the internship is similar to school training.  Thus, my example of data entry.

Second, the internship is for the benefit of the intern.  The owner of the IT company didn’t need to train an IT intern.

Third, the intern did not replace any employee but worked closely under the supervision of an employee.

Fourth, the employer gets no advantage from the internship (good PR and a good feeling aside) and may actually have his operations impaired because of the internship, for example, when explaining or checking up on the intern’s work slows a job down.

Fifth, the intern is not guaranteed a job at the conclusion of the internship.

And sixth, in the beginning of the relationship, both the intern and the employer understand – and it should be in writing – that the intern will not be paid for her work.

If all six criteria exist, there is no employment and therefore no right of payment.

Basically, if the internship is educational there is no need to pay. However, and here is where things get complicated, if the employer is actually benefiting because the intern is engaged in actual operations – even if it’s just filing or other clerical work or assisting customers – the employer may have to pay minimum wages because he is benefiting from the intern’s work.

Another way to look at it, and to become even more confused, is by focusing on the issue of supervision.  If the intern is replacing an employee, the intern is entitled to minimum wage.  Same is true if the employer would have hired someone to do the work had he not been able to find the intern.   However, if all the intern is doing is shadowing an employee and doing at the most minimal work, then it will probably be considered educational and the employer will owe nothing.  But, if the intern is supervised to the same extent as an employee, the employer may have to pay minimum wage.

Lastly, time can be a factor in determining if the intern needs to be paid.  Internships should be for a fixed period determined at the start of the internship.   The internship should not be considered a trial period leading to employment.  If the intern expects to be hired after the internship, the employer will have to pay minimum wage.  That is why, as previously noted, I highly recommend written agreements with all interns so as to clearly state expectations.

So much for employers.  What about the interns?  How can an intern assure a successful internship?

First, interns should understand why their internship is important.  What do they need at the end of the day?  They need real work experience and, most importantly, a good recommendation.  They also need to show future prospective employers that they are serious about their careers.  Having internships on a resume, as opposed to just having a good time during the summer, can differentiate graduates from their peers.  Employers take internships seriously.  They do not take college students who fool around during the summer seriously!  You need that letter of recommendation.  Or, ultimately, you need the owner of the company where you did your internship to remember you and, maybe, when you have graduated, offer you a job.  A good recommendation or a job offer are the outcomes that make an internship a positive experience.

I recommend reading a recent article by Matt Brownell from Main Street.

Surprisingly, and encouragingly, Matt quotes a survey by the National Association of Colleges and Employers that found that 58% of interns were hired as full-time employees.  I think that pretty much ends any discussion about whether or not internships should be taken seriously.

Here are some rules to follow that should help assure a successful internship:

  1. Act professionally – meaning dress the part, don’t talk on your cell phone, don’t be listening to your iPod or MP3 player.  Concentrate on your work.  Yes, I know that you are used to studying while listening to music.  But that’s not what the employer sees.  The employer sees someone who is listening to music and therefore not concentrating on her work.  And he also sees someone who is not going to be able to hear if a colleague calls her.  Impression is reality.  If the impression is that you are goofing off, you are goofing off!
  2. When you have nothing to do, ask people what you can do to help them.  In other words, show that you are not lazy and that you are a team player.
  3. Ask questions.  As Samantha Zupan of GlassDoor.com says, “You have to be insatiable and have to have curiosity about what you’re up to.”  However, don’t be rude.  Pick the proper time and place.  You want to be seen as someone who wants to learn, not someone who is a pest.
  4. If you have a problem, don’t be confrontational.  Raise issues in the form of questions.  But don’t ask stupid questions.  “Why was I sent to get lunch?” is a stupid question.  The answer is, “You’re the intern and we have work to do!”  You should know that.
  5. You will make a mistake.  You may even make a number of mistakes.  It’s called being human and being inexperienced.  And it’s expected.  Don’t cover it up.  When you do something wrong, own up to it.  Tell your supervisor about it.  Better he should hear it from you than from someone else.  If possible, have a proposal to fix the mistake.  Taking ownership of one’s mistakes shows maturity.  And it is a good life lesson.  The fact of the matter is, it’s rarely the crime that get’s you, it’s the cover-up.  It’s generally accepted that President Nixon would never have had to resign and President Clinton would never have been impeached had they just told the truth.  That brings up another life lesson: It’s better to learn from other people’s mistakes than to have to learn from your own!
  6. Follow the advice of Robin Richards of Internships.com and, when given a task ask about benchmarks.  Say something like, “I want to know that I’m doing a good job and contributing.  What’s the goal I should shoot for?”  And if during the work you have questions, ask them.  It’s better to ask than to make assumptions that will lead to mistakes.  Supervisors sometimes forget that what is obvious to them may not be so obvious to an intern – or anyone else for that matter who is doing the work for the first time.
  7. Attitude is everything.  You are not going to be judged solely on outcomes.  If Jane does the job better than Joe, but Jane is difficult to work with and Joe is a pleasure, as long as Joe has potential and is worth the investment, Joe will get the job.  It’s a lot easier to train someone nice to do a job better than to try and change a person’s character flaws.  And –
  8. Don’t try to ingratiate yourself to the big boss.  “Sucking up,” so to speak, is always transparent.  Moreover, if you are seen by your supervisor to be speaking with her boss, she’ll think you are going behind her back.  Be pleasant.  Be a team play.  Go to lunch with the gang.  But impress your supervisor with the quality of your work and the depth of your character and she’ll start talking about you to her bosses.  As I told Matt, “Once your supervisors start speaking well of you, they’re going to talk about you to the big boss.  You go over to the president and start schmoozing, that’s not going to get you anywhere.”

Finally, have fun.  An internship should be enjoyable.  You may very well be making contacts that will serve you throughout your career.  It’s the start of building a professional network.  Networking is the best way to find work.  And the more people who can say, “I knew her when…,” the better.  So enjoy and keep in touch with your new colleagues.

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Be sure to join me for our next broadcast on June 14, at 11 AM, when I’ll be discussing how to conduct a successful job search.

And remember, the mission of my company is to promote the hiring of veterans.  The most tangible way to acknowledge the sacrifice of a veteran is through employment.  So please, hire a veteran.

Thank you for listening and enjoy the remainder of your day.