Employee Retention in Small Nonprofits

Nonprofits are natural inlets for individuals passionate to serve and make a difference. That is not to say that for-profit organizations do not possess individuals who are passionate about making a difference in the world, but nonprofits at their core are a social construct meant to change policy, culture, or positively impact some entity in order to leave things better then how they were. Unfortunately, many small nonprofits struggle to retain employees. There are some natural barriers toward employee retention for nonprofits. Obviously pay can be discouraging and there is not a lot that can be done to change that for many small nonprofits. So, what can be done? What options do small nonprofits have? There are arguably three things that every small nonprofit can implement to improve employee retention.

1.) Nonprofit’s Human Resource Strategy:

The smaller the nonprofit organization the more human resource strategy seems like a given. It’s an easy temptation to think that human resource strategy is simply a part of the whole business strategy. This is because many nonprofits offer services and human resources are central to the overall strategy of the organization. However, forming a human resource strategy will guide nonprofits in how they utilize the employees they have and thereby further the overall mission while curtailing employee turnover. Having a human resource strategy means having a set plan for how each human element in an organization will be used to further the vision. Such a strategy will allow an organization to comprehensively develop policies to utilize the primary areas of human resources such as compensation, training, and recruiting to avoid being lazy with resources. Some helpful components that could be part of any small nonprofit human resource strategy are:

  • Make a strong effort to boost financial compensation to give fair wage for the work being done by cutting out nonessential budget items or redistributing compensation among employees.
  • Having a fair maternity leave policy that doesn’t burn through an employee’s paid time off or vacation.
  • Add tuition reimbursement to benefits package with restrictions geared towards employee retention such as access to reimbursement after at least one year of employment.
  • Raise tuition reimbursement but require employees to stay on for a contracted amount of time in order to get the amount.
  • Explore or implement the option for employees to cash out paid time off, especially in organizations where there are caps or other restrictions on paid time off. This is a simple way that employees can be compensated if they don’t need all their time off or they could use extra pay instead.
  • Adopt a training policy that is beneficial to the organization and employee by giving the option to have the training budget be used for tuition reimbursement for continuing education.
  • Allow employees who are students in college programs relevant to the organization’s needs to count class hours towards required training hours.
  • Refine job requirements for all positions and strictly stick to them in the recruiting process. If employee turnover is high; it can be tempting to hire anyone willing to work. However, taking the time to find the right match to the exact job description will have more long-term benefits than hiring out of desperation.
  • Make the interview process match the position. If the job requires the person to work with a team; then have them be involved in a group interview with that team. If the position is very unique or more hands on; then have a shadowing session where the interviewee can see what exactly they are potentially getting into. This will help refine the search for trustworthy staff.

Every nonprofit is unique in its own way and the ways to strategize go far beyond the few components that were just mentioned. The main point is that nonprofits find personnel in their organization from their management, board, or other staff and create a human resource strategy to stop losing employees due to poor planning.

2.) The Nonprofit’s Employee Culture:

Working to change employee culture is a difficult task just as shaping any culture is a difficult task. In this context, culture is broadly defined as the culmination of norms and values among a particular social group. Cultures are going to vary drastically given the different types of services provided, different histories, different beliefs, being faith-based or being secular, and any number of other variables when it comes to the culture among nonprofit employees. One of the biggest problems that face nonprofit employee culture and why employee turnover can be so high is organizations not recognizing what their culture is. Whether this is done intentionally or the organization doesn’t know it is happening, the lack of understanding of the culture in the workplace leads to a type of identity crisis. One where the organization will try to head in a different direction than that of its employees. This can cause disagreements over the way things should be done and will deplete morale. Some ways for nonprofits to promote a positive culture and work against issues surrounding misconceptions over workplace culture are:

  • Define the culture that exists among the employees. This can be done using surveys or having a focus group in order to determine what norms and values are most common among the current staff and how that impacts their productivity.
  • Apply the defined culture to aspects of the human resource strategy. This could mean restructuring compensation to match the values of employees, developing training to work with the personalities/learning styles of employees, or developing recruiting practices that bring in candidates who match the culture or enhance the culture.
  • Give employees room to grow into their positions. This means appointing main tasks to staff, but not dictating every detail of how it is done. Employees can then develop their own set of best practices for the tasks assigned and be allowed to show their passions and express values.
  • Reward employees based off the values and norms that exist within the workplace culture. This is perhaps throwing office parties to celebrate a successful quarter, granting special days off, or doing whatever it takes to make sure employees feel like their organization sees their good work. This can build trust and confidence within small organizations.
  • Discipline employees based off the values and norms that exist within the workplace culture. Just as every culture will respond better to certain rewards, they will also respond better to certain disciplinary actions when they make mistakes or step out of line. This could be a three strikes policy for before getting an official write up, this could be mandatory training to prevent repeated mistakes, or it could a disciplinary policy allowing for staff to negotiate what discipline they will receive. The purpose behind this is that when employees are disciplined, they don’t feel betrayed by the organization and feel inclined to leave.
  • Facilitating culture, not micromanaging it. Organizations can facilitate culture by providing employees opportunities to be together in a variety of ways. This can be scheduled staff meeting designed to let employees work together and hear from everyone, this can be having a budget for staff to host lunch meetings to focus on certain aspects of the job, or this can be any attempt at getting staff to be together and express values and norms together.

Employee culture is a tricky component of any business or organization. However, it can quickly become an issue within a small nonprofit. If a nonprofit can’t define its culture; then it will disrupt the well-being of its employees. If employees become disgruntled because they feel like their values aren’t being recognized; then they have a reason to not want to stay. Organizations can improve retention if they focus on the employee culture they currently have and how to best respond to it.

3.) Nonprofits Need to Hype Up Unique Compensation:

When pay is not abundant (the case for most nonprofits) there has to be an enthusiasm generated among other forms of compensation. These other forms of compensation are usually called indirect financial compensation and other non-financial compensation. Indirect financial compensation comes in the form of health insurance, dental coverage, and tuition assistance or reimbursement. Many nonprofits have the benefit of being able to provide decent insurance packages. Nonprofits may also have the ability to provide some form of childcare or special memberships to gyms and clubs. Non-financial compensation are perks of the job that may not have a monetary value. This can be the ability to work from home, flexible hours, or other forms of service that can’t easily be measured for their value. This also includes work space and atmosphere. It can be a benefit to have a nice office or work car to get to use. Perhaps an organization offers a four-day work week, that is an amazing perk that needs to be advertised and packaged as a unique benefit of the organization. Beyond typical work benefits every nonprofit has its areas of benefits specific to its sector. Whatever it is, small nonprofits need to make sure that those benefits are incorporated and verbalized in their human resources strategy and that the culture of the workplace is encouraged by such benefits. Many nonprofits are concerned with very difficult subject matters. When there are employees involved in social work, counseling centers, shelters, and other difficult types of work; then nonprofits need to make sure that every manner of compensation is highlighted. Hyping up other forms of compensation is a way of giving employees a reason to stay on top of the heartfelt reasons they got into the nonprofit sector.

Employees are going to come and go. At the end of the day, employees are going to realize what they like and dislike about an organization and that’s okay. However, the task of giving employees more reason to stay has to be undertaken in order to have mission success within small nonprofits. People who work within the nonprofit world have a passion for what it is they do within that sector. If it is passion that brought a worker to an organization; then passion will cause them to leave if they can’t find fulfillment.

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