Nonprofit HR’s Blog

According to the 2013 Nonprofit Employment Trends Survey, the vast majority of nonprofits (90%) do not have a formal strategy for retaining staff despite many indicating that staff retention is an organizational challenge. Interestingly, according to survey respondents, the top three functional areas experiencing the most growth are also the top three functional areas experiencing the greatest challenges with retention (direct services, program management/support, and fundraising/development, respectively).

Staffing retention has long been a major challenge among the nation’s nonprofits. Only 10 percent of the organizations surveyed in 2013 indicated they have a formal retention strategy, down from the 23 percent that indicated they had a formal retention strategy last year. Of those that have a formal retention strategy, the most commonly reported components were retention interviews, formal employee engagement plans, and retention bonuses, while very few (11 percent) included sabbaticals as part of their formal retention strategy. Of those organizations that do not have a formal retention strategy, 19 percent indicated that they plan to create one.

Interviews conducted with nonprofit leaders as part of the annual study of the sector’s employment practices showed that formal retention strategies are highly uncommon. However, while almost all interviewees said that they did not have a formal retention strategy, the majority of them mentioned a variety of informal strategies their nonprofit implemented to increase retention such as social events, staff development opportunities, employee wellness programs, and flexible scheduling. The popular use of these programs may indicate that many nonprofits do have retention practices but do not consider them to be formalized strategies or they provide them to staff on an adhoc basis if time and budgets allow.

Furthermore, the nonprofit leaders interviewed for the study said that they did not have a formal retention strategy because they simply don’t need it; they already have high retention rates and/or their organizations are small enough that informal strategies are effective enough. That opinion, that an organization does not have a formal retention program because they do not need one, runs contrary to other data collected in the study.

The study found that when it comes to competing with other sectors based on salary offerings, over half of the organizations surveyed (55%) reported having difficulty in doing this. Inability to pay competitively was cited by the highest percentage of organizations as their greatest retention challenge (32%). Organizations also cited the inability to promote/advance top performing staff (20%), and excessive workloads/insufficient staff resources (20%) as their greatest retention challenges.

To help compete against other sectors, respondents most frequently reported leveraging strong benefits packages and flexible scheduling. The inability to provide competitive employment packages and to promote staff may be contributing to the average turnover rate of 17 percent that was reported for 2012. Nonprofits indicated their voluntary turnover rate (resignations and retirements) was at 11 percent and involuntary turnover (layoffs) was at 3 percent. Of the nonprofits surveyed, 66 percent anticipate their turnover rate will stay the same in 2013 as in 2012, while 13 percent anticipate it will increase and 21 percent anticipate it will decrease when compared to last year.

When looking at the retention and turnover data together it becomes clear that organizations may be able to keep more of their staff with a formal strategy designed for the purpose of preventing the attrition of almost 20 percent of their staff.