When I first started working at nonprofits in the early 90’s one of the things that struck me as odd was that many of the organizations I worked for or interacted with had many of their staff positions turnover every year or two. While I worked at organizations with small numbers (6-10 staff members), it still seemed odd to me. And now it not only seems odd, but dangerous to the success of the nonprofit sector.
The biggest resource nonprofit organizations have are their employees and yet many times we invest in everything BUT our people. Nonprofit HR’s 2014 Nonprofit Employment Practices Survey states that 1 out of 5 nonprofits have a problem retaining staff.
Traditionally, smaller organizations don’t have time to recognize staff retention as an important goal. Nonprofit organizations have built a culture around keeping administrative costs low, even if it is at the expense of keeping good employees. The NEP survey cites inability to pay competitively as the main factor in turnover.
The ideology “we are working for the greater good, so we cannot pay you close to market rate,” hinders organizational and individual growth. Here’s where we can learn a lesson from the for-profit community; it costs a lot more to replace an employee than it does to keep one.
Succession-planning and maintaining talent are important considerations to ensure the longevity of your organization. Entry and mid-level employees are the hardest to retain, and that has a lot to do with limited opportunities for growth or advancement (cited as the second most common reason for employee turnover).
While you may be financially limited to create opportunities, provide for employee retention, the venture philanthropy movement is taking nonprofits in a whole new direction. Not only should we be paying our employees close to market rate, giving them health insurance, dental insurance, retirement plans and considering short and long term disability, but we should also be looking at how best to create an environment that makes people want to stay.
We can look at things like creative ways to structure leave policies. We can educate employees on intergenerational expectations (Baby Boomers vs. Generation X vs. Millenials) so they can better relate to their co-workers. We need to consider that if we cannot treat and compensate our employees fairly, we cannot achieve our mission of taking care of the communities we serve.