According to employment data from the National Council of Nonprofits, 34% of nonprofit organizations have a job vacancy rate of 10-19%, 26% have a vacancy rate of 20-29%, and 16% have a vacancy rate of 30% or higher. That means that less than a quarter of nonprofits have a job vacancy rate of under 10%, which is shocking considering how quickly nonprofits were creating and filling new jobs pre-pandemic. But these are not the only troubling nonprofit figures right now.
Consider the following nonprofit employment statistics:
- The voluntary turnover rate is 19% for nonprofits (compared to 12% across the entire US labor market).
- Nonprofit leaders are disproportionately experiencing burnout, with 60% of them reporting that they feel “used up” at the end of the day.
- Nonprofit employees across the entire organization are not faring much better, with 30% of them already reporting being burnt out and 20% more in danger of burning out soon.
In light of these sobering statistics, it is especially troubling that according to Forbes, a whopping 80% of nonprofit leaders report that they do not have a talent retention strategy in place.
Let’s take a look at how much this kind of turnover is costing your organization, why employees are deciding to leave, and what you can do to stop it!
The Cost of Turnover at Nonprofits
When an organization loses an employee, the cost is steep. Financially speaking, it costs on average half of an employee’s annual salary to replace them, but that monetary cost is not the only loss. Lost employees take with them important knowledge about the role that cannot easily be replaced; and in the case of nonprofit employees, they may also leave with valuable contacts, relationships with key partners, and lived experience that is crucial to the mission.
The time it takes to replace employees is also important to consider. With the tight labor market right now, replacing employees is taking longer than usual, which means that the role is more likely to stay vacant longer. Time spent finding, screening, and interviewing candidates is time that could be better spent fulfilling the organization’s mission. And, when a replacement is found, that individual will require training to get them up to speed, especially if they do not possess the same skillset of their predecessor. All of the time tied up in these hiring activities makes it more difficult for an organization to achieve its mission.
Lastly, turnover is bad for appearances. Internally it drives down employee morale, making remaining employees more likely to start looking elsewhere. In organizations where turnover is high productivity suffers, so even when employees are on the job and committed to the work they are doing, they are typically less effective. Externally it casts the organization in negative light, potentially scaring off donors and deterring volunteers. If left unchecked, turnover can poison an organization from the inside as well as the outside.
Why are Nonprofit Employees Leaving?
According to an article on how the Great Resignation has affected nonprofits, 75% of nonprofits have reported increased demand for their programs since the pandemic, and 68% have experienced a decrease in funding. The story these figures tell is one of asking more from organizations that have less to give. These increased demands are taking a very real toll on nonprofit employees, but it is only one piece of the puzzle. Recent data reveals the following reasons why nonprofit employees say they are quitting:
- 49% pursued a better opportunity
- 44% were frustrated by lack of career advancement potential
- 35% either felt disengaged or dissatisfied with the organization
- 32% sought better pay
- 20% pointed to personal or family reasons
- 19% changed career paths entirely (potentially leaving nonprofit work altogether)
Clearly, these percentages add up to more than 100%, which means that much of the voluntary turnover was in response to several precipitating factors. In each of these instances it is reasonable to conclude that if one or more of these factors had been mitigated (for instance, a clear path to career advancement or improved organizational culture or better pay), employees may have remained with their employers.
Strategies to Improve Nonprofit Retention
A Harvard Business Review resource outlines how companies can win the talent war going on today. It focuses on a four quadrant solution of material offerings, growth and development, meaning and purpose, and connection and community. While this resource is intended for the private sector, nonprofits can take some valuable lessons away from this as well, namely the importance of focusing on both the individual and the collective elements that encourage retention.
Each organization will need to determine why they are losing employees and what they can do to stem the tide. Using exit interviews is one way that organizations can root out the underlying cause for employee exit. While some employees may not be forthcoming, making the effort to understand why they are leaving is not merely a kind gesture, it is also crucial in strategically developing an employee retention plan.
A good retention plan should include some combination of the following:
- Providing thorough onboarding for new employees
- Getting to know new and existing employees personally, especially those in leadership positions
- Strong communication regarding job responsibilities, workflow, needs, and availability of resources
- Conducting regular check-ins and offering performance feedback
- Supplying ongoing training and skills development
- Conveying meaning around the organization’s mission
- Offering flexible work options
- Connecting employees to the community they serve
- Setting a clear path for career development and making career growth opportunities available
- Expressing genuine gratitude for a job well done
- Fostering a sense of ownership over work being done
- Offering incentives and rewards for top performers
- Communicating transparently about organizational initiatives and opportunities
- Building a heathy and rewarding organizational culture
An organization cannot be effective if it loses its best staff. If your nonprofit is losing employees (especially at the leadership-level), it is time to bring in a nonprofit consultant to help right the ship. When you need to hire nonprofit leadership like a new Executive Director, CEO, or Director of Giving, please reach out to us. We have a team of experienced nonprofit recruiters ready to help fill your vacant role with someone that can take the helm.
