“People say we have a turnover problem, but they don’t understand…we have a people problem.” “My board has brought it up but trust that the issue is under control” “I need help figuring out how to keep people here longer.”
There are a few things that pop out to me reading this. We will have to deal with three issues: perception versus reality, acceptable turnover, and why people are leaving.
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Finding good nonprofit talent is hard enough. Let’s keep them engaged.
Perception vs. Reality
Look, let’s not sugar coat it. If you have people leaving at a rate that is causing concern and negatively impacting your team’s effectiveness, you have a turnover problem.
Denying it is not going to solve the issue and will slowly drain your organization. This leaking of talent will begin to impact the quality and excellence your programs were once known for. Eventually, growth stagnates. An organization can be reduced to a shell of what it once was.
Bleak? Yup! that’s why you must acknowledge the issue head on. Take ownership to change it.
Every Organization Has Turnover
Indeed, all organizations experience a natural turnover of their employees. According to ExactHire, nonprofit turnover averages 19% compared to 12% in all organizations. Nonprofit HR published 2019 statistics showing a 21.3% turnover rate in nonprofits with 16.7% voluntary turnover and 5.2% involuntary turnover (terminations).
I’ve worked with organizations that have experienced 26%-42% turnover! Yet, some Executive Director’s dismiss it as wrong people issues. This is usually a sign that part of the problem is at the executive team level.
The La Salle University School of Business found that the cost to find nonprofit talent in positions earning over $50,000 is 20%, or $10,000.
So, if your turnover is over 19% OR you are feeling the losses in your organization’s effectiveness, your turnover is an issue.
On another note, perhaps you have just started to reorganize your nonprofit to change the culture, direction, and effectiveness. In this case, you may need to move some of your staff out to ensure you have the right people in the right seats.
In this case, accept a higher turnover for 3-6 months. Then be sure you are retaining these great new staff that is right for you and their roles. Get the people issues solved rapidly. Dragging them out beyond 6 months is keeping you from focusing on the future.
Why are my people leaving?
Asking this question is the first step to solving the issue. I usually see high nonprofit turnover organizations also being low-trust environments. When this is true, finding the answer is going to take time and a culture shift.
Typically, people leave an organization for the following reasons:
- Leadership – You and your team are key. Don’t be the emperor without clothes. Take a good look at your top leaders. Ask, then ask again, and keep asking if you or anyone on your team are causing a poor culture. You won’t get a real answer until someone trusts your motives.
- Culture – Your leadership drives culture. Be intentional and document what the culture is that you want for your organization. Measure anonymously where you are on that journey. Pick key areas to affect change and be intentional to address root issues.
- Growth – Create paths for professional growth opportunities. It’s not just about the money. Give more responsibility, accountability, opportunity to try a new direction. Give it a fresh title if it makes sense. Good people want usually want to be on a progressive path. Give it to them.
- Compensation – Nonprofits are notorious for paying below market for roles. Yes, we want people who are passionate about our causes. But our staff have bills, student loans, spouses, children, pets, and elderly parents. They want to be able to take vacations and buy a special gift for others. Think about salaries, retirement plans, insurance, PTO buckets, tuition reimbursement. Let’s don’t be stingy. Great people move our organizations forward in huge ways. Keep them around.
What do I do?
Here is the order I would suggest you investigate and solve your nonprofit turnover issue.
- Check yourself – It all starts with you. Whether you agree or not, accept the feedback you’re given. Please don’t dismiss it. Solve it.
- Check your leadership team – Make sure this is the right team, and they are carrying “water and oxygen” to the team members in your organization. They must carry the vision and direction while creating culture.
- Define your culture – On paper. Not lofty goals, but what is so core to your organization and the staff you want to have that you cannot compromise on it. 3-7 items are a good place to land.
- Survey staff – Send a well thought out survey to current and former staff. Be sure responses are anonymous for this first go-round.
- Compensation review – Get some help and find out how your full compensation and benefits package compares to your market, location, and organizational size. Peer-reviewed HR service providers can help.
- Identify career paths – Look at your org chart or accountability chart if you subscribe to EOS and see where there may be opportunities for someone to start and grow in your organization. A quick way of doing this is to identify what functions and roles will be needed in the next couple of years. Plan ahead. Develop your leaders for tomorrow.
How to Calculate Employee Turnover Rate
Perhaps you don’t know what your turnover rate is. No problem. The math is fairly easy.
Once you decide on the period of time you are reporting on, find the number of employees at the start of the period and the number at the end of the period. Then find out how many employees left during the reporting period.
Now, let’s do some math:
(#Employees Leaving / ( ( #Employees at Start + #Employees at End) / 2 ) ) * 100
Now, there are alternative approaches in the world of HR and you can get more detailed by reviewing these numbers monthly. But, the above will give a solid number to track.
How To Calculate Employee Retention Rate
We talk about turnover rates. The opposite of turnover is retention. So, let’s get you a formula.
First, identify the time period you are reporting for. Typically this is an annual measurement. Then find how many employees you had at the start of the reporting period. And then, how many of those same employees stayed through the end of the period.
It’s important that you are measuring employees that stayed. Do not count new staff that joined part way through the period.
Now do some straight forward math:
( #Employees At Start / # Same Employees At End ) * 100 = Employee retention rate
Example: If you have 87 employees in January 1st and had 80 of those same employees stay through December 31st, your employee retention rate is (87/80)*100 = 92%
What do you think?
How have you experienced nonprofit turnover? What has helped address the issue? Has this advice helped you?