Nonprofits face many unique challenges compared to the for-profit sector when it comes to recruiting and retaining top talent. The work can be physically and emotionally daunting, the pay often lower and the benefits less generous. Combine that with a coming exodus from the sector as the baby boomers that currently fill most leadership positions retire, and you could have a looming “brain drain” and leadership void that could hamper charities of all shapes and sizes for years to come.
According to experts, employee retention strategies aimed at combating that scenario need to focus on employee engagement.
“Overall, engagement is still a major challenge in the nonprofit sector,” said Dan Harris of Quantum Workplace, a provider of human resources software services focused on employee engagement.
“When we talk about engagement, we mean the strength of the mental and emotional connection to work. The more engaged a worker is, the more likely they will put forth more effort, go above and beyond, care more about their work, and be more willing to help out their coworkers when called upon,” Harris said.
All of this creates a positive feedback loop that drives organizational culture and makes the company a better place to work. That, in turn, improves employee retention, he said, and helps charities keep their most talented staff members in house.
According to Quantum’s research, bolstering employee engagement in the nonprofit world comes down to three key things:
- Creating a diverse and inclusive work environment. Quantum found that diversity and inclusion among nonprofit staff are sorely lacking. The company points to various data that show the breadth of this problem:
- Although 63 percent of nonprofits say diversity is a core value, multiple employment surveys have found that white executives still lead 9.5 out of 10 philanthropic organizations.
- Only 7 percent of nonprofit chief executives and only 18 percent of nonprofit employees are people of color.
- Just 8 percent of nonprofit board members are minorities, while nearly one-third of boards lack a single member of color.
- All told, the percentage of people of color on nonprofit boards has not changed in 18 years.
- Fewer than one in five charities with budgets of $50 million or more are led by women.
The benefits of increasing diversity are numerous, Quantum found: Staff feel more welcomed and their contributions more valued by senior leadership, which leads to more enthusiasm to contribute in the future—another virtuous feedback loop.
- Having capable, trustworthy leaders. According to Quantum’s research, nonprofit employees need to trust that their leaders are ethically driven and responsibly guiding the organization in its mission. In fact, the data show that trust in nonprofit leadership ranks among the highest engagement drivers. Put simply, employees who have confidence in top executives are more likely to work as loyal, outspoken advocates for the organization, while those who don’t may be holding back in their performance and pose retention risks, Quantum said.
“A big part of this is transparency,” Harris said. “Employees need to know and understand why things are done. There needs to be more transparency about the strategic direction, why changes are made, and in terms of revenue and finances, what funding is used for, how and why.”
- Creating a promising outlook for employees and their organizations. According to Harris, nonprofit staff need to see a future with their organizations. They yearn for clear career paths, professional development opportunities and advancement within the organization. Just as importantly, they need to see their organizations make progress toward the mission — some milestones that demonstrate the impact their hard work is having on the ground and in the communities they serve.
“Nonprofit employees are mission-driven, and there is a strong need for strategic communications about staff development, succession planning, long-term goals and how all of this ties in to the organization’s purpose,” Harris said.
Putting together a focused plan to boost engagement and retention will have some costs—either in staff hours or in consultant fees—but it is well worth the investment, Harris said.
“There is no question that turnover among nonprofits is higher than with for-profits. Yet most nonprofits don’t have any retention strategies in place,” he said.
In the for-profit world, companies make the requisite investments to engage their workers and retain top talent—and charities need to do the same thing, he said.