Does the Nonprofit Industry Have an Employment Problem?

Doesn’t it feel like the employee turnover rate in the nonprofit sector is unreasonably high? It sure seems that each time I talk to a nonprofit organization, the person who used to be my contact is no longer there. It can be frustrating for volunteers and donors to deal with what feels like a revolving door of staffers.

The reality is, the nonprofit employee turnover rate is exactly the same as in other industries. The Society for Human Resources Management (SHRM)'s “Human Capital Benchmarking Report” puts the average employee turner over rate in the U.S. at 19 percent.

The “2016 Nonprofit Employment Practices Survey” published by Nonprofit HR reports average employee turnover rate at… you guessed it, 19 percent.

So why does it feel like the nonprofit industry has a more pronounced staffing problem? Well, first off, if there are one or two organizations in your community that seem to “churn and burn” staffers every six months, they probably are doing exactly that. Remember the SHRM and the Nonprofit HR reports described averages. And to reach an average, some must be lower and some have to be higher. The organizations with poor employment reputations in your community probably represent the top of the turnover curve. It could also be the case that the “bad apples” get more press or more gossip in the community than the organizations that are running on an even keel, making the gap seem artificially large.

Another reason for the misperception may be that many nonprofit organizations are simply not used to running their operations and evaluating their own metrics like a for-profit business. Nonprofits tend to “run on tired.” They may have too few staff members doing too many jobs and always feel like they are behind. Because of this, the organizations’ leadership spends their time putting out fires instead of proactively putting a solid plan in place for recruitment, training and continual stewarding of employees.

It is up to nonprofit leadership to decide to change organizational culture—to stop just trying everything assuming one of the actions will work. Don’t just hire and hope. Train, evaluate and give continual feedback. Solicit input. But above all: Genuinely value your staff and let them know it.

If an organization’s mission is to ensure that people with developmental disabilities are paid a fair and living wage in the workplace, but it pays its own staff who are carrying out that mission a substandard wage, that agency is showing it does not truly value its staff. It is shouting it from the rooftops, actually.

Saying there isn’t the budget to pay staff fairly is not an excuse. It simply means that the organization needs to budget differently, and then adjust its fundraising plan and actions accordingly. The nonprofit may not be able to increase things to an equitable level in just a year, but the board of directors can certainly include the planned steps to get there in the agency’s three to five-year strategic plan.

Strategic plans are key. If an organization has never run the numbers to see what its turnover rate is and what that attrition is costing the organization, it should start now. If it is discovered that its employee turnover rate is 26 percent compared to a national average of 19 percent, it is time to start investigating why.

Like the numbers show, however, nonprofit industry turnover stands at the same 19 percent average as other industries. Even if an organization is higher than the average, that is not an inherent and insurmountable problem. It may just be time to start being more self-aware. Nonprofit status is not an excuse for substandard wages (or unbalanced wages—where executives are paid well, but front line staff are at minimum wage), lack of a recruitment and retention strategy or a culture that does not genuinely value the people in its employ. We need to know our metrics and base employment strategy and action on best practices. Let’s make it our priority to stop running tired.