I see a lot of job-related stress at Houston nonprofits. It reminds me of a board member at a nonprofit I led. When I warned him that the staff was overworked and in danger of burnout, he said, “load the wagon. The mule will tell you when he can’t handle any more.”
Employee turnover is a problem throughout industry, but nonprofits are seeing even bigger problems than for-profit businesses. According to one study, nonprofit employees are quitting at a rate of 19% a year, compared to the overall workforce rate of 12%. The problem could be worse than that since so many nonprofits are simply not filling vacancies. The impact is also being felt by current leaders and staff members. A 2021 report said 60% of nonprofit leaders feel “used up” at the end of the workday.
Solving turnover problems often starts by convincing the board there is a problem in the first place. A new online tool can help you do that. The Nonprofit Leadership Alliance has published a Cost of Employee Turnover Calculator on its website. The calculator shows the actual cost of employee turnover by calculating your direct costs for the employee, plus the cost of recruiting, hiring and training replacement employees. Why is this important? Because it allows you to show your board how much of a hit your budget takes every time someone leaves.
It is also worth making sure the board understands why you have turnover. There are two types of turnover:
Involuntary – More people quit than are let go, but, when there is an involuntary termination, performance is usually the cause. The Alliance says 60% employee terminations are for job performance issues. Dig a little deeper into your organization. Why didn't the employee work out? Did they burn out? Were they promoted into a position they couldn’t handle? Was it because you didn’t have the time or capacity to recruit, hire and train stronger performers? It is cheaper to invest in your hiring process and your staff wellbeing than to replace people who leave.
Voluntary Turnover – In most cases people leave on their own and they have their own individual reasons for leaving. You should make a point of doing exit interviews and using a standardized questionnaire. Use that data to make informed decisions. Nationally, the data shows that people leave for better opportunities. The top two reasons are for career growth or better pay and benefits. Dissatisfaction with the organization is a distant third.
Understanding why people leave and the real cost of replacing them once they do is the starting place to convince a board that it is time to address turnover.