Nonprofit Staff Attrition: What Can You Do to Retain More?

80% of nonprofit leaders say that they have no talent retention strategy in place.

Losing staff is a major expense for nonprofits. The costs stem from a loss of productivity, recruitment, training, and onboarding. Losing a single employee can cost around 50% of the employee's annual salary. The replacement costs become even higher for leadership roles.

High turnover rates show your nonprofit is facing challenges in employee retention, and that can, in turn, significantly impact not only your impact and productivity but also morale.

For nonprofits, attrition and turnover are especially problematic, with statistics showing an average rate of 10%. Compare this to the 12% average across all sectors, and it underscores the need for strategies to retain your valuable staff members.

High turnover also affects the continuity of your organization and undermines relationships with stakeholders, including donors, clients, and volunteers. Retaining your staff is necessary to build critical long-term partnerships and sustain the impact of your organization.

Despite the high turnover rates seen in nonprofits, in a recent survey, 80% of responding leaders said they had no talent retention strategy.

When you prioritize retention as a nonprofit, you can strengthen your ability to achieve your mission and drive growth.

At the same time, you have to balance this with limited resources and constraints that come with being a nonprofit, which can be a hindrance when it comes to attracting employees in a hiring environment that's very competitive.

Why Is Retention Especially Important for a Nonprofit?

Retention is important regardless of sector and industry, but even more so in a nonprofit. So why is that?

First, budgets are tight, and nearly 90% of nonprofits operate on a budget of less than $500,000 a year.

The second issue that impacts retention is that nonprofit work is relationship-centric.

A nonprofit needs strong relationships, so if you have someone leaving who's built relationships with donors and other partners, you might lose contacts that help sustain your work. Even if you don't silo those key relationships, a departing employee can still harm your connections. 

Understanding Why Your Employees Leave

It's difficult to correct a problem if you don't understand the root causes. As a first step to reduce staff attrition, research to find out the issues that exist.

According to a nonprofit HR survey, some of the most commonly reported reasons for employee turnover include finding better opportunities elsewhere, a lack of development or growth opportunities, and dissatisfaction or disengagement with the culture or organization. 

Other cited issues include benefits and pay, personal or family reasons, or changing career paths.

So, within your nonprofit, how can you uncover the underlying factors that contribute to retention and attrition issues?

• Ask questions and provide routes for anonymous answers. Base your questions on what people like about their jobs as well as what they feel your nonprofit could do better. There's no better way to figure out what's going wrong than to ask the people feeling it and experiencing it directly.
• Assess your leadership and culture.
• Delve into data. What can you find as far as trends and patterns are concerned when you look at employee exits? Do you have notes on why people left, or do you conduct exit interviews? If not, it's time to start.
• Think about how long departing employees have been with you. If, generally, the tenure of existing employees is short, you may have an issue with hiring or training. For longer tenures, departures could indicate an organizational issue.
• Join your teams in their day-to-day work environment to gain first-hand experience and insight.
• When you ask for feedback from current and departing employees, make sure that you're acting on it. It's going to be demoralizing for employees to feel like they're sharing feedback, and it's being ignored.
• Compare salaries with the market because this could give you something that's fixable rather easily, although attrition can stem from a lot of causes.
• Put in place and monitor a dashboard that will allow you to readily dive into turnover data.

When you first take the time to understand the issues, you're informed to take appropriate, targeted action. You can also address your biggest risks and put your resources there rather than trying to do everything simultaneously.

Create Staff Retention Plans

After you've discovered the reasons people are leaving the team, you can start to build plans to improve retention.

There are two areas of focus here—a succession plan and an actual retention plan.

Succession planning gives you a guide to follow when there is attrition, especially involving leadership. A succession plan gives you a blueprint for recruitment strategies and how you'll minimize performance risks linked to leadership turnover. You can facilitate a smooth transition to new leadership.

A formal plan minimizes your hiring and training costs by decreasing turnover.

Some of the key components to consider when building a retention strategy include how you recruit and onboard, compensation, learning and development, DEI, and performance management.

As a nonprofit, some additional considerations include mission alignment, indirect compensation, and volunteer management.

Highlight Impact and Show Appreciation

While you can't always be as competitive as you might like with compensation as a nonprofit on a tight budget, there are things unique to the sector that you can do.

One of these is highlighting the impact your employees make on not just the organization but the community. Show a clear link between the work each employee is doing and the impact they are making in specific, concrete ways.

A lot of employees do find a sense of purpose can be pivotal to their engagement and satisfaction, but they might not always be able to see how they are changing people's lives and the community as a whole, so make sure you're highlighting these things regularly.

Also, regular appreciation should be genuine and personal. Let each employee know how much you value them and their contributions.

If you take the time to get to know each of your employees individually, it'll guide how you show appreciation in the ways they're most likely to feel comfortable with.

Create Growth Opportunities

You don't want your employees to feel like there's nowhere for them to go, so even if you can't always offer vertical growth in the form of a promotion, offer lateral growth. Provide learning and development opportunities for growth within existing roles.

Promote internally whenever possible, along with providing development and training. Offer challenging opportunities, provide mentorship, and send employees to conferences, workshops, and other nonprofit industry events where they can build connections with peers and learn best practices.

Maximize Benefits

Compensation might not be as important to employees as it once was, but it's still a good idea to review your budget and identify ways to increase compensation. As you're exploring your options, make sure you calculate the costs associated with turnover.

Aside from that, if you can't afford to raise compensation currently, you can offer bonuses, or you can increase your paid sick, holiday, or family time.

You might also be able to provide a flexible work schedule or things like on-site childcare. Get creative with benefits.

Be Proactive About a Healthy Work Culture

You can't assume that your nonprofit has a good culture. You have to work at it and be intentional. A healthy culture is characterized by employees feeling valued, trusted, and engaged consistently. 

To help facilitate a strong culture, demonstrate your core values. Be transparent about goals, policies, budgets, and decisions, and solicit feedback frequently.

There should be a zero-tolerance policy for any toxic behavior in the workplace.

Toxicity in the workplace can be especially challenging for nonprofit employees because they likely choose their career path based on their desire to make a difference and make the world better. If there's a toxic culture internally that's contrasting with the outward mission of the organization, that's going to be felt even more strongly in a nonprofit than it might be elsewhere.

Pay Attention to Hiring Trends

Keep an eye on hiring trends in the nonprofit industry so you can stay competitive. Your culture, general opportunities, pay, benefits, and work models need to be attractive to potential employees, particularly within the larger nonprofit hiring landscape.

In conclusion, prioritizing staff retention in a nonprofit setting is crucial for maintaining long-term partnerships, sustaining impact, and fostering growth. By understanding the root causes of turnover and implementing targeted retention strategies, organizations can create a positive work culture, offer growth opportunities, maximize benefits, and highlight the meaningful impact their employees make. With a proactive approach to talent retention, nonprofits can overcome budget constraints and hiring challenges to build a dedicated and engaged team that drives success in achieving their mission. Ultimately, investing in staff retention not only benefits the organization but also ensures a positive working environment that attracts and retains top talent in the competitive nonprofit landscape.