Talent Retention in Not-for-Profit Organizations

Talent Retention in Not-for-Profit Organizations

Our firm recently had the opportunity to meet with over 40 human resources leaders to discuss the challenges faced by organizations in virtually every industry regarding retention. Most not-for-profits feel the effects of the “perfect storm,” including inflation, the Great Resignation, increased wages, and the gap between the number of job openings and unemployed workers, all of which have impacted turnover.    

However, according to the 2021 Nonprofit Talent Retention Practices Survey by Nonprofit HR, 80% of not-for-profit organizations surveyed have no formal retention strategy, which is a risky gamble given that corporate and nonprofit organizations are courting nonprofit employees. With the cost of replacing an employee ranging from 33% to 150% of compensation when factoring in salary costs, recruiting expenses, and downtime, it is critically important for nonprofits to play defense when it comes to keeping their current talent. Some of the retention strategies we discussed at the Chief Human Resources Officer Forum included:

Total Rewards Review & Revisions

We’re seeing an increase in the number of nonprofits seeking to understand the landscape as it relates to compensation, and many are working with compensation consulting firms to better understand how their compensation ranges compare to the market—at times using both nonprofit and corporate benchmarks. This knowledge is even more critical as compensation transparency becomes more common. Leaders can benefit from being armed with market data when having pay conversations with associates.

Others are taking steps to address pay compression, provide off-cycle adjustments, and utilize a merit matrix to allocate limited reward dollars to those who drive value the most within an organization. Although it’s often difficult to remain competitive with corporate salaries, budget-constrained nonprofits should also emphasize attractive non-cash total rewards, including paid time off, flexible work arrangements, retirement contributions, generous parental leave programs, and enhanced medical benefits. If your organization is above-market in terms of benefits but below-market when it comes to wages, you might consider a total rewards statement to demonstrate the full investment you are making in your associates.

Career Growth and Development

In the Nonprofit HR Survey, 44% of respondents indicated that a lack of opportunity for upward mobility or career growth was a primary reason for voluntary turnover. One of the human resources leaders at our session indicated that their managers have quarterly career conversations with direct reports, two of which must focus on career interests and development-and-learning opportunities that are important to the associate. Other organizations are reviewing job architecture to ensure that career ladders are in place. Many not-for-profit organizations are small and thus cannot offer a clear career path for high-performing employees. To ensure professional growth opportunities, consider forming cross-functional work teams for special projects, giving an employee an opportunity to manage interns or other staff, or allowing associates to a lead a significant strategic initiative on behalf of the board. Title enhancements may also be a low-cost way for employees to feel valued for their contributions. 

Culture and Employee Value Proposition

Nonprofit organizations are uniquely positioned to capitalize on mission-orientation as more employees reassess their values and seek work with greater meaning. However, boasting about the intrinsic benefit of supporting your core mission is not enough. In a Gallup survey of over 13,000 US employees, work-life balance and wellbeing have increased in importance in recent years, with 61% citing it as “very important” as compared to 53% in 2015. Employers who are focused on wellbeing (including purpose, social, financial, community, and physical components of wellbeing) are better positioned to reap the benefits of a thriving workplace culture through higher productivity, decreased absenteeism, and higher retention.

Employees who feel valued and connected to organizational mission and their co-workers are less likely to search for other jobs. You can create an engaged workplace by providing appropriate management and supervisor training, improving teamwork at all levels, providing employees with the tools and resources they need, giving appropriate and timely recognition, and encouraging open, two-way communication across the organization.

For additional ideas on how you can retain the employees you need, please contact us here.

Talent Retention in Not-for-Profit Organizationshttps://www.cbiz.com/Portals/0/Images/HEro-TalentRetentioninNFP.jpg?ver=6PF2Jhi1jbuN_Ji0T2kFBw%3d%3dhttps://www.cbiz.com/Portals/0/Images/Thumbnail-TalentRetentioninNFP.jpg?ver=GBIv6EvSeYql1YVtvrEmnQ%3d%3d80% of not-for-profit organizations surveyed have no formal retention strategy, which is a risky gamble given that corporate and nonprofit organizations are courting nonprofit employees. 2022-07-27T17:00:00-05:0080% of not-for-profit organizations surveyed have no formal retention strategy, which is a risky gamble given that corporate and nonprofit organizations are courting nonprofit employees. Employee ManagementNot-for-Profit & EducationBusiness & Management ConsultingYes