Did you know that the desks at your nonprofit are full of cash?
What if I told you that the average employee at a nonprofit is sitting on $15,000 to $30,000 in cash? Or that senior executives have as much as a $100,000 buried in the nether reaches of their desks?
Would you think I was crazy?
According to the Society for Human Resource Managers (SHRM), that’s the cost of replacing an employee or leader who leaves your organization. Those costs — in hiring fees, lost productivity, lost engagement, customer service errors and training costs — represent real money that has to be raised or earned. And that does not including the inevitable morale issues that may arise when a popular employee decides to leave, often inciting other employees to leave with them.
There is real money tied up in your current employees — money that could be used for other programs or activities that further your organization’s mission. So, wouldn’t it be a good idea to try and keep them in your organization?
The Challenge of Employee Retention
Nonprofit employees tend to be underpaid and overworked in a “do good” culture where the nature of the work — helping others — is assigned a value as if it’s compensation. While this may work in the short-run, those who run nonprofits know that employees will only accept the “social discount” for a short time. This often results in young and talented employees leaving for higher-paying jobs when the reality of the cost-of-living in high-priced urban areas becomes clear.
Considering this, it is not surprising nonprofit employee turnover is high. According to the 2016 Nonprofit Employment Practices Survey published last year by GuideStar and Nonprofit HR, employee turnover averages 19 percent year over year — with higher rates in program service areas that deal directly with beneficiaries. And according to an info-graphic created by Board Director, the top reasons that people quit nonprofits come down to poor pay, too heavy a workload, and a lack of advancement opportunities.
So what's the solution?
Given the challenges of funding in the nonprofit sector, you might believe you can do little to fix your retention rates. While pay is at the top of the list, most studies have also shown that lower pay can be offset by great organizational culture.
Here are some ideas we’ve successfully implemented at Mission Edge to stem turnover:
Having a transparent culture is essential with today’s workforce, increasingly made up of “millennials” — a generation that requires a greater understanding of the organization’s goals and purpose. While most nonprofits make their overall mission clear, finding ways of communicating that mission on a daily basis requires intentionality on the part of management. At Mission Edge, we work hard to ensure all members of staff have a voice in decisions, particularly about issues that affect their workplace. This includes the creation of a cross-functional “culture committee” that we’ve empowered to bring new ideas to leadership about how we can improve the work environment.
Creating a family-friendly work environment that takes into account the real lives of staff is essential. This includes allowing staff flexibility in how they get their work done, and making allowances for the realities of an increasing number of households with two working parents.
We've instituted a “remote Friday” program at Mission Edge that enables staff to work from home one day a week. Staff must still meet their goals and report their work during these days, but we’ve built a culture of trust in the company that has been largely self-enforcing. Employees appreciate the flexibility of working remotely and commit themselves to not violating the privilege.
With few management positions available and many employees seeking promotion, nonprofit employees often leave because they don’t feel there they have opportunities for advancement inside their organization. Employees, however, can still grow inside their current position with professional development goals individualized to their needs. If employees feel they have opportunities to grow their skills and work for a company that invests in them, they are more likely to stay. At Mission Edge, we set a training budget for each employee and work with them to craft a development plan that reflects their professional goals.
These are but a few non-compensation related ideas you can use to improve employee morale and increase loyalty inside your organization. Remember, the people you have working at your nonprofit represent a significant investment in time and money. Treat them as such and you’ll have a healthier, more productive organization.