Rethinking Employee Retention

When nonprofit staff discuss employee retention, the consensus is typically that employee turnover is a problem we need to fix.

I totally agree — sort of. Having a stable workforce can improve efficiency, provide institutional memory and significantly benefit donor relationships. Yet, retaining the wrong employees can be more detrimental to the organization, demoralizing to staff and the managers who eventually have to deal with personnel problems that have festered year after year.

As a fundraiser, it’s easy to see the importance of retaining employees, especially those who have relationships with key donors. “Donors desire to ‘plug in’ personally with someone from the organization,” Joe Dominguez from Phoenix Rescue Mission said. “If they can make the connection, the long-term benefits are endless: increased giving, volunteering and soliciting others to support the mission.”

“Donors often see retention as a mark of organizational stability,” Lisa O'Leary, a seasoned fundraiser at a community college foundation, noted. “When employees are committed to the institution, donors are more likely to want to provide the same commitment. These donors value the relationships they have built over the years and appreciate the ease of working together.”

Why Complacent Employees Actually Hurt the Organization

But with that said, retaining employees “no matter what” actually hurts an organization. For example, employees who have discovered that average is good enough at your organization often become complacent. Dominguez was hired to lead a team that had staff with 10 to 25 years of service in their positions.

“Despite their tenure and vast experience, they were unable to meet the department goals,” he recalled. “They believed they knew the best way to do things because they had been in the position for so long.” Over time, Dominguez added team members whose “primary focus was not to keep their jobs but to figure out how they could do the best job. Their enthusiasm and drive helped change the landscape and propelled us to meet our objectives.”

Additionally, retaining staff who are unexceptional at best and incompetent at worst can send a message to star performers that all work is equally rewarded. An employee can produce good, bad or mediocre work and remain employed. “There is almost nothing more demoralizing to star performers than feeling like their hard work and the results they produce aren’t recognized,” Kellie de Leon, an experienced marketing and fundraising leader in nonprofits and the agencies that serve them, said. “When you retain employees with mediocre performance, it shows your entire team where the bar is set: low. You disincentivize your best employees.”

The end result is often that the very employees who could help your organization grow and succeed leave for other positions, and you are left with sub-par performers who are perfectly happy with the way things are now. Your organization survives, but it can’t thrive and reach its full potential because the people who should be pushing you forward are comfortable right where they are. It’s like trying to win a game of tug of war when a few people are pulling with all their might while the rest are barely keeping their hands on the rope. You may not totally fail, but you’ll likely never make progress.

How Your Nonprofit Can Best Prepare Itself

A better approach is to embrace the fact that turnover is inevitable and is not a bad thing unless you — and your employees — are perfectly content with status quo, both in terms of organizational performance and personal career growth. With this attitude, you can focus on preparing for — and embracing — turnover.

First, commit yourself to developing current position descriptions that are reviewed annually and updated when needed. “Department work processes are always in a state of flux, and it's our responsibility to be diligent in regularly reviewing job descriptions and responsibilities,” Dominquez said. This activity needs to be part of regular reviews that cover strengths and weaknesses. de Leon knows that “it’s natural to want to avoid challenging conversations, but we owe it to each employee to be as transparent about negative feedback as we would be about praise.”

You must also make sure there is a healthy environment for cross-training and knowledge-sharing. “In organizations where turnover is minimal, employees may retain tacit knowledge that is often not passed on to other employees before their departure,” O’Leary noted. “Although this can be beneficial when the employee is still there, it can be difficult for future employees to complete these tasks since the knowledge (to do so) was not documented or shared.”

It is also critical to identify your key performers, work with them to define a career path and help them pursue that path. When an employee is committed to personal growth and career enhancement, seeing no place to go in your organization sends a loud message: I have to work elsewhere to keep growing.

Perhaps the most important practice nonprofit leadership must commit to — even if you don’t work in the fundraising department — is to insist on copious reporting of donor interactions. This must be a “trust but verify” task because it is so critical when you have turnover of any staff person who has interacted with a donor. A second part to this is to never, ever let only one person have a relationship with a major donor. While one may have the primary relationship, one or more others need to have ongoing, consistent interaction — even if it is a supportive role — so the donor has a familiar point of contact if an employee leaves. These two actions, taken together, are essential for maintaining major donor connections despite inevitable staff turnover.

Reward Your Star Performers

Finally, no matter how little funding you have for raises, reward employees for performance, not just for staying around. “Think deeply about how each team member contributes to the promises you make to donors, whether that’s how your programs get carried out or how efficiently you work to make sure their donations stretch,” de Leon said. “Then reward the behaviors and people that align most closely with carrying out your work.”

When you identify your star performers and give them the raises and the support that enable them to achieve their career goals, you will likely retain the people who can help move your organization ahead — and that’s far better than retaining everyone but never moving ahead.

In closing, each person that I invited to contribute to this article has shown himself or herself to be a rising star — two while working on my team and one in the classroom where I was the instructor. Each one has risen to my expectations and then moved beyond, and I could not be prouder. If any had remained where they were when I first met them, the nonprofit community would be less than it is today, and important causes would have suffered. I urge you to join me in accepting that turnover as inevitable — but more importantly, in embracing it as a way to grow people, organizations and missions.

Editor's Note: This feature article was originally published in the November/December 2020 print edition of NonProfit PRO. Click here to subscribe.