The work of your nonprofit is changing lives. Your mission may literally be the difference between life and death for the community you serve, yet you’re still here, struggling with administrative plights like high staff turnover.
The topic of high charity turnover rates may seem painful, but the solution isn’t. At Applied, we’ve reworked the hiring process to be radically more effective and stop hiring managers from choosing the wrong candidates who won’t last.
Make no mistake: high staff turnover in the non-profit sector is a solvable symptom.
But before we dive into specific remedies, let’s zoom out and the real task at hand: employee retention.
Hiring for your non-profit? Find out how we can help you build a process as ethical and purposeful as your organization here.
What is employee retention?
Employee retention refers to a company’s capacity to keep its employees. It’s often referred to as a statistic too - the percentage of employees who stay at your organisation.
If an organisation has a 95% retention rate, this means that it has kept 95% of its employees over a given period (usually a year).
Whilst some organisations and jobs will naturally have higher turnover than others, most organisations aim to maintain healthy employee retention, both to keep their best talent and to avoid the cost of hiring a replacement.
Learning how to reduce employee turnover at your nonprofit organization should be a fundamental aim of your hiring practices.
Figuring out how to reduce employee turnover is more than just a copy-paste retention strategy.
It starts with an honest assessment of where your organization is at now.
Don’t get caught up in vague signs of high turnover - turn to your data.
Let’s start with how to calculate employee turnover rate as a starting point, and then the exact steps that will result in your organization having less new-hire churn.
How to calculate employee retention rate (turnover)
Calculate the employee retention rate of your organization using this turnover rate formula:
- Subtract the number of employees who’ve left from the total number of employees.
- Divide the total number of employees by the answer above
- Multiply this by one hundred to get the employee retention rate
Whilst it varies from industry to industry, employee turnover research shows that the average employee retention rate in the UK is around 80%.
The remaining 20% is the employee turnover rate.
Was your employee turnover rate higher or lower than average? What if I told you that it could be 13% lower? That’s what organisations who use the Applied method experience.
How would retaining 93% of your employees year-over-year impact your nonprofit? Sign up for a free Applied demo now to find out.
Whether you have a healthy turnover rate or a below-average one, calculating employee turnover is an important step in assessing your nonprofit organization.
…as is understanding exactly how this turnover is affecting your organization.
Why high turnover is bad for your non-profit
But, it’s more than just a paperwork problem. The effects of employee turnover is seeping into your organization and employees in tangible and intangible ways.
Financial cost of hiring a new person
Employee turnover has a very real, measurable cost.
Every time an employee leaves, you’ll need to replace them.
And hiring isn’t cheap.
According to the Center for American Progress, it costs a company around 20% of an employee’s salary to replace them.
And in the case of high-paid positions, this cost could be up to 213%.
On average, companies in the US spend about $4,000 to put someone in a job.
These figures may sound extreme, but just think about all of the costs involved in hiring:
- Cost of job board(s)
- Recruiter fees
- Interview and admin hours (the wages of everyone involved in hiring)
- Training/ onboarding time and expenses
- Loss of opportunity and productivity
When employees leave, they take all of their knowledge and experience with them.
Even once you’ve hired their replacement, they’ll still take time to reach the same level of productivity as the employee they replaced.
In Allied Workforce Mobility’s Survey, 30% of companies said that it takes a year or longer for a new employee to reach the productivity level of a departed employee.
Think about your current job.
How long did it take you to familiarise yourself with your organisation’s mission, customers, internal language and technology?
Then, how long did it take you to actually nail all of the above and really begin to excel?
You don’t just lose an extra pair of hands when someone leaves, you lose all of the expertise and momentum they’d built up, which gets stopped dead in its tracks and has to be rebuilt from the ground up with a new hire.
That’s a tangible loss.
Intangible losses can be just as devastating.
Impact on culture
High staff turnover has a compounding effect that increases exponentially over time. Employee turnover breeds even more turnover.
Nobody likes to see their favourite coworker leave, and when someone goes, remaining employees tend to want to know why - and potentially follow suit.
People can take time to get fully comfortable working with each other, genuine bonds between employees aren’t built overnight. If remaining employees begin to see departed colleagues as success stories, management has a major crisis looming.
Staff turnover impacts the entire employee experience.
Your company culture relies on these bonds between colleagues, and so you’ll want to fix high staff turnover if you don’t want your culture being diluted and remaining employees feeling marginalized.
6 tips to reduce your nonprofit’s high staff turnover
Turnover rates may just sound like uncontrollable ebbs and flows, but they’re not. There are many research-backed reasons for why people quit their jobs, and we have the data on how to make them stay.
If you’ve been waiting for a sign to make time to address your high staff turnover rate, this is it. It’s time to spend less time sweating over interviewing and onboarding and more time on the mission. Use these 6 tips to get started today.
1. Hire the best candidates
Amongst the top reasons for employee turnover is the elephant in the boardroom: the employee was simply the wrong candidate for the job.
Employee retention is often spoken as something to worry about after hiring someone.
But if you get your hiring right, you can actually make sure you hire people who will stay for longer.
The more predictive your hiring is, the better, more dedicated candidates you’ll get. Clinging to hiring tools that are poor predictors is poking holes in your entire process and skyrocketing your turnover rate.
The boat will sink, and staff turnover will rise.
We're talking about poor predictors like…
At Applied, we’ve stripped the hiring process down to include only predictive measurements.
Our behavioural science-backed assessment entails breaking down parts of the role and turning them into questions and case studies. What's more predictive than getting candidates to do bits of the job itself?
These are called work samples, which are the best tool in the box for hiring the right candidates. Of course, we know that as a nonprofit organization, we also must talk about the mission.
2. Hire for mission fit
You can also ask candidates how comfortable they feel about your organisation’s structure, size etc. Since we’re a startup, we like to make sure potential hires are aware of what this entails.
If you want the right candidates, ones that are mission-driven and therefore stick around, you have to make sure that they know what they’re saying yes to.
Ideally, you want potential candidates to decide whether this is right for them before they apply.
Start by ensuring that your job descriptions are spot on. By working the mission statement into your job listings, you essentially create an easy and low-cost way for applicants to self select.
In order to provide more clarity, it can be helpful to bring up the mission statement before you begin the actual interview. Start off by telling them that this is a nonprofit organization and explain what its mission is.
Finally, use work samples that reflect the mission statement. By selecting candidates based on their skills rather than their experience, both parties get a very clear idea of what working together will look like.
When hiring for our own team here at Applied, we make sure to test for mission and values fit, which are essential in determining whether or not someone is a good match for your organisation - a sure-fire indicator of whether or not they’ll stick around.
We know how important it is, and can help you do the same.
3. Make sure you offer flexibility
It’s not you, it’s me.
Sometimes it’s an excuse, but sometimes employees really do leave jobs that they love because of external circumstances.
Employees quitting can be solely based on outside factors or responsibilities that conflict with their work.
But that doesn’t mean a nonprofit couldn’t have stopped it from being a deal-breaker.
This is why it’s essential to offer flexible working options to all employees.
Whilst you could just extend this to those who express their need for flexibility, some employees might not feel comfortable speaking up, so it's best to offer everyone the same benefits and working options.
And flexibility doesn’t just mean working from home.
- Allowing employees to work from home
- Accommodating irregular working hours for employees who are caretakers
- Encouraging employees to take time off
Flexibility is free to offer but can help nonprofit openings be more competitive against higher-salaried positions.
Let’s say you’ve done it all right up until this point: you’ve hired the perfect candidate. They’re in love with your mission, and they have all the flexibility they need
Don’t lose them by not giving them room to grow.
4. Build your progression framework
For an employee to stick around your nonprofit for years, they need to feel like they’re going somewhere within your organisation.
To prevent your top talent from feeling as if they’ve outgrown the company, you need to put a clear and detailed progression framework in place.
This should show employees exactly where they’re at, and the necessary steps to get to the next level.
Without this, employees who don’t feel comfortable asking for pay rises/ promotions might just take their chances elsewhere.
Your progression framework should also include development opportunities, as high-skills training and professional development programs are commonly cited as one of the top benefits that employees want related to training.
This is especially true of nonprofit employees who are intrinsically motivated and prioritize auxiliary benefits in place of higher salaries.
Do you want your employees to feel like they can grow and progress with you, or do you want them to reap what they can and move on?
A progression framework is as much about incentivising long-term employees as it is motivating new hires. The benefits are plentiful:
- Employee recognition
- Career development
- Better life balance
If you don’t have a progression framework in mind, this next tip will help you develop it.
5. Send out feedback surveys
General happiness and satisfaction are less tangible than employee retention rate, but they can be measured.
Here at Applied, we personally use and highly recommend Officevibe to keep tabs on general well being.
Whilst it won’t tell you who’s going to leave and why, you can get an idea of how employees are feeling at an aggregate level so that you can address any issues before they result in employee turnover.
Even if the results aren’t as you’d hoped, you should still consider sharing regular updates with the wider organisation.
Workers that aren’t happy will see that you’re aware of the problems and making an effort to correct them. It naturally pumps the brakes on employees leaving.
This form of employee engagement is invaluable.
It also pulls the focus away from evaluating individual employees and zooms out onto the team as a whole. Team members who are unhappy don’t usually keep it to themselves, and management doesn’t do themselves any favours when they refuse to bring team dissatisfaction to the surface and address it.
6. Invest in making your company inclusive
Companies with a diverse workforce consistently report high retention rates. Therefore, investing in making your hiring process more inclusive is an efficient way to make sure the people you hire stick around.
Inclusive hiring actually starts before you ever even meet candidates. It begins with your job description using the right language. Learn more here.
Although having an unbiased hiring process doesn’t guarantee the workforce will be more diverse overnight, it does result in equality of opportunity.
Diversifying the workforce can be a slow process but with equality in opportunity, it will happen over time.
Learn how to make your recruitment inclusive here.
Nonprofit high staff turnover conclusion
High staff turnover is bad for business. Every penny of your funding should be spent meaningfully, not on onboarding new employees who won’t even be there for their one-year review.
High employee retention is possible for your nonprofit. While nonprofits may be seen by many as just one of those high turnover jobs, that’s a cry for an improved process.
And, frankly, an excuse.
Don’t feel stuck in your employee turnover rates. Book a free Applied demo today and let us do what we do best so you can focus more on what you do best: fulfilling your mission.
Applied is the essential platform for debiased hiring. Purpose-built to make hiring empirical and ethical, our platform uses anonymized applications and skill-based assessments to identify talent that would otherwise have been overlooked.