Straight Talk About Nonprofit Turnover

Every year, Nonprofit HR puts out the Nonprofit Employment Practices Survey. For nonprofit nerds like me, this day arrives with great anticipation and fanfare.

Then, I read the report.

Nonprofits Have Employment Practice Problems

This might come as a surprise, but nonprofits are not exactly bastions of robust business practices in general. Sadly, many nonprofit leaders don't see the value of building a strong business foundation - and may even resist doing so because they (wrongly) see "business" as a direct conflict to "mission." Thus, it shouldn't be a stretch to realize that nonprofits are facing a big problem when it comes to employment practices. Employee recruitment and retention are especially tragic in nonprofits, and I think we need to have a heart to heart about it.

Get comfortable. This won't be easy.

It's hard to find a benchmark for a "good" turnover rate for businesses and organizations. That's largely because every industry, organization and business is different. Sometimes, a turnover rate might be too high - measured by the leakage of good, solid employees, and the high cost of recruitment to find new, qualified employees, train them, and deploy them. Other times, a turnover rate might be too low - especially when a staff is disengaged, unproductive or otherwise not delivering high value to the organization.

That said, I'm trying to make a point, so I'm going to pick a number. (Warning: I'm no journalist. I have a lot of opinions and an agenda - to transform the nonprofit sector for the better, so I'm going to serve that agenda shamelessly).

After some hunting and pecking, I found a relatively credible statement from one Bernadette Kenny in Forbes: anything below 15% is OK. Sounds good. Let's use that as a starting point.

According to the Nonprofit HR 2015 survey, nonprofits have seen turnover increase from 16% in 2013 to 19% in 2014. The survey notes that this may be due to increased confidence in the job market.

Now. That's great for the job market! Hooray for the economy! (I'm also an economics and policy nerd, so bear with me while I do a happy dance for a sec).

However, that's not so great for nonprofits. Why?

The Circle of Strife

A) More than half of nonprofits lack a formal recruitment strategy. That's not great.

B) Fully 68% of nonprofits have no succession plan. NONE!

So. We're looking at turnover, often in the upper echelons of nonprofit leadership and management - from retirements, what have you, and we have no plan for that.

Only 21% of nonprofits promote internally to high-level positions, with 61% taking staff from other nonprofits to fill their executive level positions. Which, presumably, leaves these other nonprofits with vacancies to fill, but most likely not from their existing staff (because they haven't bothered to build a pipeline for leadership development, of course), which in turn poaches other nonprofit leaders and so on and so on. The circle of strife.

The Curse of Nonprofit Scarcity

The top reason nonprofits sited for staff retention problems was their "inability to pay competitively."

First of all, the way that's worded seems a bit helpless to me. "Inability" makes it seem that nonprofits are somehow crippled by their lack of money. It's as if they have absolutely no means to improve the plight of their overworked, under-appreciated and underpaid employees (reasons 2 and 3 for retention problems? Inability to Promote and Excessive Workloads).

I'll contend that this "inability" is not an entirely accurate way to frame the issue. First of all, nonprofits that pay better are certainly more attractive to even the most idealistic and altruistic job seeker. That's not the only thing - nonprofits that provide professional development and advancement opportunities keep their best people longer as they invest in them, and in return, receive investment from these employees. In turn, they spend less on recruitment and training, which is far from cheap, if we actually take the time to consider those costs.

So, what gives?

Is it that we don't know how to develop employees? Is it that we truly feel incapable of investing in the most important resource we have available to us? Is it that third party funders keep nonprofits in a perpetual cycle of deficiency, need and scarcity? Yes, yes, and yes.

What Can Be Done, Now That We've Been Wringing Our Hands?

Nonprofits are businesses. Pure and simple. The best businesses invest in their employees and their organizational infrastructure. They empower employees to do their best work, bring their best selves and best ideas to the work of the organization. Nonprofits that invest in employees are investing in their missions.

Nonprofits that keep employees underpaid and under-resourced are mirroring the very issues they are trying to solve in society. Equity? Justice? Freedom from coercion? All of these are common nonprofit missions. How do your employees perceive and experience your mission within the organization? Are they empowered? Are they free? Are they allowed to express themselves in their work? Are they provided with pathways toward personal and professional development?

No?

Then, let's change that. Let's get succession planning. Let's take some time to look to the future of the organization, to build a stronger workforce, to create leaders who are committed to your cause and your mission.

Invest in training. Invest in listening to your staff. Invest in paying them enough to live, for goodness sake. Make your organization beautiful and attractive and fulfilling to the best people, who will make the biggest difference in the world. And let go the people who aren't in that place - who aren't contributing the value.

The job market is looking pretty good, after all.