The Great Resignation’s Impact On Nonprofits And What To Do About It


Stephen King serves as President & CEO of GrowthForce, the leading outsourced accounting and bookkeeping service provider for Nonprofits.

Nonprofit HR’s 2021 Nonprofit Talent Retention Practices Survey found that 42% of responding nonprofit leaders expected their employee turnover rates to increase in the coming year, and 80% of respondents said that their organizations did not have a talent retention strategy in place.

If you find that your organization is experiencing turnover, and you have no plan to mitigate increasing attrition rates, you could be steering your organization in a dangerous direction. Turnover costs are surprisingly high and can be detrimental to an organization’s well-being.

Plus, with limited resources and even governmental or grant-mandated pay rates, nonprofit organizations face greater limitations. These constraints can be incredibly hindering when it comes to attracting employees in a highly competitive hiring environment.

During the pandemic, disruptions to the workplace led to closures and layoffs in both the nonprofit and for-profit sectors. Following the brunt of the pandemic, most leaders expected workers to return en masse to the workplace, but this did not happen.

Instead, workers began reassessing their values to better protect their free time and work with a greater sense of purpose, spurring the Great Resignation movement.

To make themselves more desirable and competitive to the top talent, many for-profit companies have pivoted to the demands of this newly enlightened and empowered workforce- like increased pay, better benefits, improved work-life balance and remote work options.

Nonprofits, however, were already operating with limited resources before the pandemic, and the pandemic only served to further limit those resources. According to a Salesforce trends report, 75% of nonprofits have seen an increase in demand for programs, while about 68% are confronting a decrease in funding.

As a result, nonprofits have not been able to pivot as quickly. This has left many of them short-staffed and experiencing even steeper turnover rates.

Nonprofit Trends: Why Nonprofits Employees Quit

According to the earlier referenced Nonprofit HR survey, the most commonly reported reasons for voluntary employee turnover included:

• 49% of employees found better opportunities elsewhere.

• 44% invisible career paths (lack of opportunity, career growth or professional development).

• 35% disengagement or dissatisfaction with the culture or organization.

• 32% benefits and pay.

• 20% personal or family reasons.

• 19% changed career path.

To address the high turnover rates that nonprofits are facing in your own organization, you absolutely must have a retention strategy in place. It’s also important to measure its impact and make adjustments to continuously improve employee satisfaction.

Five Turnover Best Practices To Reduce Nonprofit Turnover

1. Stay competitive by paying attention to nonprofit hiring trends.

According to a survey from UST HR Workforce Solutions (download required), two-thirds of nonprofit organizations expect to add employees to their staff this year.

If you’re among the organizations hoping to hire new talent, this means there is going to be a lot of competition. You need your pay, benefits, office model, culture and general opportunities to be attractive to potential employees, especially within the greater nonprofit hiring landscape.

2. Consider outsourcing your non-core competencies.

Of course, you probably shouldn’t outsource your nonprofit’s primary operations. But you can outsource everything that you’re not an expert in, like legal services, marketing, customer response management, bookkeeping and accounting.

Outsourcing is a major problem-solving strategy for organizations trying to operate smartly on a lean budget. You’ll also gain access to industry experts who are the top talent in their respective fields while avoiding the high costs of hiring full-time employees in-house.

It also helps with reducing turnover rates, for your employees can focus on the mission rather than being focused on administrative tasks. Outsourcing your non-core competencies allows you to devote more time and resources to focus on your mission and furthering your organization’s goals.

3. Focus on employee engagement, culture and well-being.

A Gallup poll found that 73% of disengaged employees were actively seeking out other employment compared to only 37% of engaged employees.

Yes, working in a nonprofit offers intrinsic benefits of having a job that is making a tangible, measurable and positive impact on the world. However, this intrinsic benefit only goes so far in keeping employees engaged and satisfied. To stay at your organization, employees require a positive workplace culture, a system of rewards and recognition and a system of leadership that actively fosters an environment of psychological safety.

4. Offer training opportunities and create clear paths to career development.

Another way to increase employee engagement and also help employees feel like they are working toward a greater purpose (i.e., to help employees feel fulfilled by their jobs) is to create clear paths for career development in your organization. As evidenced earlier, invisible career paths are one of the top reasons why employees leave nonprofits and the nonprofit sector altogether.

Providing training might seem expensive, but it’s smart to think of it as an investment in your people. Plus, if they quit, you’re likely going to end up spending more money to replace them anyway.

5. Hire the right people—not just the best people.

It’s also smart to focus on your nonprofit’s workplace culture and keep it in the front of your mind when hiring new staff. Instead of always selecting the individuals with the best credentials or experience, you should be choosing the individuals who are the best fit for your organization in terms of values and culture.

These people will be more loyal, help you further cultivate the workplace culture you want to create and won’t leave as soon as they receive another sparkling, new offer from a different organization.

Continuously monitor turnover rates and retention strategy success.

Once you’ve implemented an employee retention strategy, you won’t know if it’s working unless you have the systems in place to keep track of your organization’s metrics.

With a strong back office, you can carefully track your organization’s productivity, impact, retention rates and turnover rates to carefully test your existing strategy and the success of each new employee retention strategy you implement in the future.


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