The Normative and the Narrative around Nonprofit Turnover

Posted on April 03, 2018 by Parvez Khan, One of Thousands of Business Coaches on Noomii.

Turnover is essentially an employment cycle in an organization. It’s when, for example, in a restaurant, a customer is served, pays, leaves, the busboy busses that table, and another customer arrives to sit at and order from the same table; we say that table has turned on that particular day/night. Similarly, in an organization, in an incident of attrition, when an employee leaves, and is replaced by another, that position is occupied by a new individual, and thus the organization experiences turnover. This is normal and expected anywhere, whether in a for-profit or nonprofit corporation, and is calculated in an straightforward manner– divide your average number of employees in your fiscal or calendar year into the number of employees who left (Adkins, 2017). That percentage is your turnover rate.

Qualifying Questions

As a leader of a nonprofit organization, there are pertinent qualifying questions to ask yourself to understand your organization’s relationship to this phenomenon, beginning with “Is turnover really an issue in our organization?” and “What’s our plan for when someone leaves?” When any one of your positions experiences multiple iterations of employees, continue your investigative interrogatives: What does it mean when those people all leave within a few months? What happens if you experience a “black Friday” where several of your team members leave simultaneously? Are you purging? Going through a transition? Is your organization so toxic that no one wants to work for you? All these are excellent questions to ponder. They have you thinking from a place of vulnerability and introspection. In a field that generates almost a trillion dollars annually for America (McKeever and Gaddy, 2016), not being able to retain quality talent is a category which we sadly lead.

The numbers…and beyond

And we do own that statistic. According to a 2015 study on nonprofit boards, 23% of all nonprofit boards abruptly ended their executive director’s term, whether through resignation or termination (HBR, 2015). The overall turnover rate in nonprofits has been steadily increasing to a currently estimated 20% (McCambridge, 2017). When two out of ten of your employees will leave you, something is amiss. Juxtapose that with, say, for-profit professional and business service providers turning over their positions at a much more temperate monthly average of 5.5% (BLS, 2017).
So how do we keep those quality people we’ve vetted? Wait…have you really vetted them? Or did you take the best of three resumes and hire the person behind that resume without really giving it its due diligence? Be honest with yourself here….
I understand the stresses of non-profit management, believe me. I see it every day. Recently, the director of a local Habitat for Humanity chapter confided that she is afraid of losing one of her most valuable employees because she simply cannot find the immediate funds to retain her. I sympathize; nonprofit leaders suffer from numerous debilitating constraints set upon them, so creating a culture of positivity and success is easy to delay and avoid.
One of the most destructive attitudes a nonprofit manager can adopt is in treating potential hires like “plug and play” electronic devices, which the Habitat for Humanity director was desperately trying to avoid. If your accountant leaves, then just replace her with someone else, right? This issue of onboarding is its own article, and I will address it in the future. And…suffice it to say that if we do not put the effort in at the beginning of a hiring cycle, we only have ourselves to blame when an employee fails to meet our expectations, stunting the organization’s productivity and growth.

What turnover really means

So what does all this mean for you? If the aforementioned qualifying questions resonate with you and you can answer at least some of them in the affirmative, then it is a strong indicator that your beloved nonprofit organization that is looking to raise our collective quality of life by achieving your vision is instead making the ugly, regressive transition into a stepping stone organization. What I have found is that the normative is these nonprofits are treated as time-bound learning experiences (“I’ll be here for three years and build up my resume”) by individuals looking for something greater but unable to presently achieve their desired position. Right along with that is the narrative nonprofit leaders are telling (or not telling) themselves and their staff. The culture may very well be intentionally oblivious to its weaknesses; conversely, the leadership may be making up stories without real data to inform them, thus creating a culture of “this is why this happens.” This can be equally damaging, as it sets in motion a victim-driven culture perpetuating mediocrity and accepting, among other dangerous sub-standard characteristics, a high rate of turnover.

Solving a perpetual crisis

So how do you overcome a perennial issue that keeps you in crisis mode like a whack-a-mole game? I will not offer “the solution,” but rather strategies to ponder for long-term organizational cultural change. Your most valuable assets need a reason to stay, just as they had a reason to join in the first place. Since they agree with your mission, give them one or two great reasons to stay. Why would they leave, specifically? What’s missing right now that makes working elsewhere attractive? Have a real conversation with your staff members about what they want. While you’re at it, ask them what they think is going on as indicated by the turnover rate. Finally, create a strategy for getting to the exact number of employees you need, in the places you need them. Do you need to hire more fundraisers or dig into your volunteer base? Perhaps asking your Board for assistance is a low-cost alternative resource; just make sure you don’t draw from the well so much that you drain it. If you don’t have the talent in-house, go outside and ask– network, network, network. You’ll be amazed at what you find if you simply ask.
Turnover is an indicator for nonprofits just as much as for-profits. Like any indicator, it is not “the truth,” just your truth. When you as a nonprofit leader survey your organizational health, you will want to take into consideration as much data as you can, both qualitative and quantitative. When you paint that picture, is it the vision board you created when you first started out, hungry to create change in the world? If not, it may be time for a serious change…in your world.

References

Adkins, W. D. (2017). The formula for calculating employee turnover. Small Business Chronicle. (email author for link)

Bureau of Labor Statistics. 2017. Job openings and labor turnover statistics report–July 2017. (email author for link)

Harvard Business Review. September 2015, p. 28, via "2015 Survey on Board of Directors of Nonprofit Organizations” by David Larcker, William Meehan III, Nicholas Donatiello, and Brian Tayan.

McCambridge, R., January 3, 2017. “High nonprofit frontline turnover rates require focus and collective chutzpah.” (email author for link)

McKeever, B. and Gaddy, M. The nonprofit workforce: By the numbers. The Nonprofit Quarterly, Vol. 23, Issue 3, Fall 2016, p. 16.