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Current nonprofit sector research and recommendations for effective day-to-day practice from ASU faculty, staff, students, and the nonprofit and philanthropic community.
For nonprofit organizations to effectively serve their missions and be sustainable, they must invest in some of their most vital resources: their staff. Unfortunately, the data shows that 81 percent of organizations are without a retention program.
The 2017 Nonprofit Employment Practices Survey results show that organizations’ top three greatest talent challenges are hiring qualified staff within limited budget constraints, maintaining salary budgets against market pressures, and finding qualified staff. However, when comparing costs associated with staff turnover, versus costs of investing resources into staff, studies show that turnover is a greater expense for organizations. Costs of productivity, errors, the impact on remaining staff and hiring costs must be taken in to consideration. Challenges recruiting qualified staff only intensify the need to retain them.
Coleman Selden and Sowa state in 'Human Service Organizations Management Leadership & Governance' that studies examining turnover show that effective HR practices, from recruitment and onboarding practices to performance management and evaluation practices, all impact retention. When creating a retention strategy, it is important to consider the entire employment cycle, paying attention to both intrinsic and extrinsic factors.
Research confirms that dissatisfaction with pay contributes to nonprofits losing quality staff , according to Eun Kim & Wook Lee in 'Review of Public Personnel Administration.' Best efforts should be made to ensure employees feel their compensation is fair and appropriate to their worth. However, Eun Kim and Wook Lee caution that only focusing on pay can mask real reasons employees leave, which may stem from overwhelming workloads and frustrations resulting from a lack of appreciation. This dissatisfaction can lead employees to place greater focus on extrinsic incentives. Schoshinski encourages emphasizing total compensation packages to prospective employees, especially benefits, organizational culture programs and work/life balance. Offering creative benefits can help when there are budget limitations. However, it is important to be forthcoming from the start about compensation limitations.
A recruitment plan supports retention from the start. Patty Hampton of Nonprofit HR urges organizations to focus on finding candidates who have a balance of personality/culture fit and necessary skills. To achieve this balance, Hampton encourages creativity, stating that traditional recruitment and interview tactics do not provide much information about how candidates will fit into daily life. To better gauge serious candidates, she suggests taking them to lunch, having casual conversation and giving them the opportunity to communicate with staff they will manage or work with. Information about organizational culture and a realistic preview of the job should also be communicated to candidates. Staff retention itself is a good recruitment strategy because once a reputation of valuing employees is earned, top talent will approach the organization.
The literature suggests employee engagement is a key area nonprofits should focus on to retain high-quality employees. Beckbridge asserts that the best talent will stay if they are happier in their current position than they could expect to be somewhere else. According to the 2017 SHRM Employee Satisfaction and Engagement Survey, the largest percentage of respondents communicated that respectful treatment of all employees at all levels is a very important contributor to their job satisfaction. Another critical point is that trust between employees and senior management has been gaining significant importance, tied with compensation, with the second largest percentage of respondents communicating these factors as very important.
Dan Harris of Quantum Workplace contends that there are three things nonprofits must have to increase engagement: a diverse and inclusive work environment, capable and trusting leaders and a promising outlook for employees and the organization. It is vital to ensure those in key leadership positions are trustworthy and lead by example. Feedback should be multi-directional, with employees having opportunities to provide ongoing and honest feedback to leadership. However, for this to be effective, employees must trust leadership and feel concerns will be addressed.
Employees want to grow their skills and know they are making a difference. Schoshinski states that sharing information about the big picture with employees can increase their connection. Managers should make efforts to get to know the interests and needs of their employees to support their growth. Hurst encourages rethinking job designs to provide employees with opportunities to grow and be challenged in new ways. Furthermore, it may be beneficial to evaluate the organizational structure and ask whether it is one that empowers employees, giving them the ability to maximize their skills and leadership qualities.
Lisa Brown Morton, president and CEO of Nonprofit HR, asserts that competition for talent is greater than ever before. Because many for-profits have the ability to offer greater financial incentives, nonprofits must implement other strategies to remain competitive places to work. Furthermore, as baby boomers who currently hold most leadership positions retire, there is a greater need to retain high performers who can fill these voids.
Kristin Harvey is a graduate of the Master of Nonprofit Leadership and Management program at Arizona State University. After graduating with her bachelor’s degree in social work from the University of Wisconsin-Green Bay in 2013, Harvey gained experience working with children and families for several years before deciding to seek the education necessary to take on a leadership role. Her goal after graduation from the MNLM program is to take on a leadership position where she can continue her work toward empowering individuals, families, and communities, or a position in animal welfare.