Investing in Employees: A Key Strategy in Addressing the Not-for-Profit Talent Shortage

Investing in Employees: A Key Strategy in Addressing the Not-for-Profit Talent Shortage

Most sectors of the U.S. workforce continue to experience a skilled labor shortage that was exacerbated by the COVID-induced “great resignation,” and the not-for-profit sector is no different. The sector’s tight budgets and often heavy employee workloads mean not-for-profit organizations face some unique challenges that can make it especially difficult to retain and attract top talent.

Despite continued economic uncertainty and the competitive labor market, the not-for-profit sector remains resilient. According to the CBIZ 2024 Not-for-Profit Pulse Survey Report, 51% of respondents expressed confidence about retaining their current employees. However, that number dropped below half when it concerned hiring and recruitment.

Retention Matters  

Think of the workplace as an ecosystem. Positive conditions like fair pay, clearly communicated advancement opportunities, remote work options, high morale and more, all of which lead to increased productivity, engaged employees and, that’s right — low rates of employee turnover. When negative environmental factors throw off a workplace ecosystem, turnover rates begin to spike, which causes a negative ripple effect for an organization. When one employee leaves, others must increase their workload until a replacement is onboarded, leading to burnout and lower engagement.  

By putting in the work to retain your workforce and balance a healthy workplace ecosystem, you will experience a more uplifting workplace, and an organization can continue to operate seamlessly while putting more resources toward its true purpose: serving its mission.

Investing in Current Talent for Long-Term Success

When organizations stay competitive by prioritizing steady wage increases, opportunities for continuing education and advancement, nurturing a positive, flexible culture and having an effective plan in place to replace any employees who do choose to say goodbye, they will continue to retain valuable, longtime employees and high morale. It’s evident that organizations need to invest in a solid recruiting and retention strategy to ensure greater success in employee retention.

According to a 2023 survey conducted by the National Council of Nonprofits, nearly 75% of not-for-profits expressed that salary competition impacts their ability to hire and retain employees, followed by budget constraints and reported levels of stress and burnout from staff. This introduces the age-old problem for not-for-profits: While it can be difficult to free up room in shrinking budgets for salary increases, paying a current employee what they’re worth is still less expensive than the costs associated with inevitable employee turnover when salaries are below market value. It’s estimated that the cost of replacing one employee is equal to one-third of their annual earnings when you factor in the costs of advertising and filling their position, as well as lost productivity, according to the Society for Human Resources Management (SHRM).

Nearly 70% of our Pulse Survey respondents anticipate maintaining an employee wage increase of 2.5-5%, which is on par with the national average wage increase of 4% in 2024, according to SHRM. This healthy wage increase rate shows a commitment to steady growth and staff retention despite financial constraints.

Looking Ahead

Not-for-profit leadership must have a plan in place that keeps current employees engaged to stay ahead of the curve and minimize the resources needed to backfill positions. This is a good time to enhance your organization’s current retention strategy. Consider some of the tactics highlighted below if they are not already part of your organization’s retention strategy.

  • Conduct annual salary reviews with adjustments for cost of living
  • Offer paid maternity and paternity leave policies
  • Offer flexible work hours and options for remote work
  • Give opportunities for company-sponsored continued education
  • Prioritize the employee onboarding experience
  • Create a system for employee recognition

Connect With Us

At CBIZ and MHM, our team of experts is dedicated to supporting your not-for-profit organization's unique needs. Our professionals are equipped to offer tailored assistance that enhances your organization's efficiency and effectiveness. Connect with one of our not-for-profit practice leaders today to explore how we can assist you in prioritizing your mission.


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Investing in Employees: A Key Strategy in Addressing the Not-for-Profit Talent Shortagehttps://www.cbiz.com/Portals/0/Images/FSArticle_Investing-in-Employees-A-Key-Strategy-in-Addressing-the-Not-for-Profit-Talent-Shortage_HERO.jpg?ver=PxvIyEFHHDxMtdPcCb0ltg%3d%3dhttps://www.cbiz.com/Portals/0/Images/FSArticle_Investing-in-Employees-A-Key-Strategy-in-Addressing-the-Not-for-Profit-Talent-Shortage_Thumbnail.jpg?ver=La6II1-BSsqE4GLOV0mLLA%3d%3dMost sectors of the U.S. workforce continue to experience a skilled labor shortage that was exacerbated by the COVID-induced “great resignation,” and the not-for-profit sector is no different. 2024-03-25T17:00:00-05:00

Most sectors of the U.S. workforce continue to experience a skilled labor shortage that was exacerbated by the COVID-induced “great resignation,” and the not-for-profit sector is no different.

Employee ManagementNot-for-Profit & EducationYes