Improving Employee Retention within the Non-Profit Sector
Introduction
Employee retention is a key issue for the non-profit sector. In the book The Race for Talent: Retaining and Engaging Workers in the 21st Century, Frank, Finnegan, and Taylor (2004) define employee retention as “the effort by an employer to keep desirable workers in order to meet business objectives.” In the non-profit sector, meeting business objectives means hitting fundraising goals while keeping business expenditures at a minimum. Keeping skilled workers on staff is much more cost effective than hiring new employees. In the current business climate, hiring and training new employees is a costly process. It is imperative that an organization enact provisions to retain high quality, skilled employees on staff. Reducing staff turnover rates can have a direct positive effect on an organization’s bottom line. In recent years companies have begun to focus on employee retention. In a 2004 report Pricewaterhouse Coopers stated that “CEOs at the nation’s fastest growing companies overwhelmingly cite retention of key workers as the most critical factor to plan for in the future.” Companies are now becoming aware that employee retention is a top priority. This has lead to increased focus on the reasons employees leave. Many employers think that turnover has to do with low pay. Of course, money is important to employees, but there are several other factors that lead to the loss of employees. In 2006, Gallup published two polls on employee turnover. From these polls Gallup cites these statistics: “Of those who quit their jobs, 82.8% left their companies, while 17.2% moved to a new position in the same company. When those who quit voluntarily were asked why they quit, "pay and benefits" was the second most common answer, but only 22.4% of respondents mentioned it. The most common answer for why they were moving on was for career advancement or promotional opportunities (31.5%). 20.2% said they lacked job fit. And 16.5% said they were leaving because of management or the general work environment.” (Gallup Poll, 2006) Several issues can contribute to loss of employees. This paper will focus on the main factors influencing loss of employees within the non-profit sector. These factors are advancement opportunities, employee underperformance, problems with supervisory staff, and retention of new hires.
Advancement Opportunities Employees that are just focused on doing their job day after day with no thought to their future tend to have no loyalty to the company. In his book, Engaging the Hearts and Minds of All Your Employees, Lee Colan states, “When employees are fully engaged, they deliver passionate performance, a strong, sustained intellectual and emotional attachment to their work.” (Lee Colan, 2009) Employees who are strongly engaged in their work culture tend to be more loyal. Non-profit organizations should focus on finding ways to engage employees. Company leaders should develop a strategic plan for enhanced employee engagement. A plan for employee engagement must be strategic and customized to the needs of the company. Leadership should ensure that there are processes in place to help employees plan a career path and experience personal and professional growth through their employment. An organization should give all employees equal opportunities to advance within the company with individualized career development programs. These programs can also be used to identify and develop feeder programs of skilled and trained employees for senior level positions.

Employee Underperformance Underperformance is going to happen in every work environment. With a little effort, it is usually simple to identify the causes of underperformance. One of the main contributing factors is an employee failing to have a clear understanding of goals and responsibilities. Clear performance objectives should be agreed upon in writing each year. Secondly, there may be competency issues with an employee. Competency issues can come to the forefront with a newly promoted employee who may be struggling to learn a new role. In this case, it may be cheaper to offer extra help and training to the struggling employee, rather than to recruit a new hire for the position. Thirdly, personal issues could be affecting an employee’s focus at work. If an employee is going through a divorce or has a sick family member, a little compassion and patience can go a long way toward building long-term loyalty to the company. It is imperative that an organization’s human resource department investigate underperformance instances to develop a plan to retain employees that are worth the time and effort. Buckingham and Clifton (2001) said “The great organization must not only accommodate the fact that each employee is different, it must capitalize on these differences”. In many cases, putting in a little time to get to know a struggling employee will save costs and create a long-term loyal worker.
Problems with Supervisory Staff Another factor affecting employee retention is problematic supervisory staff. According to a study by Hudson Research in 2004, “a full third of employees rate their bosses or supervisors as fair or poor”. In many cases, employees quit their job to escape a poor manager. It’s a good investment when companies provide continuing training and development for leaders. Managers that can inspire workers to grow within a company are invaluable. Managers should have quarterly meetings with their employees to check on their mindset and provide support. Managers and employees should work together to set career goals that are meaningful for the employee and the company. The satisfaction of employees starts at the top. Senior managers should ensure that employees from all backgrounds are treated fairly. Managers need to provide support so that employees can reach their potential.
Hiring Long Term Employees Non-profit leadership should work with human resources personnel to determine the characteristics long term employees share, then seek to recruit employees with those characteristics. It’s definitely worth the organization’s time to focus on recruiting people with the characteristics to become long term assets. If hiring managers ensure that a new hire is a good fit for the organization, retention most likely won’t be an issue. A simple way to work toward the best match between an individual and the workplace is to create a detailed and accurate job description. A company needs to be clear about what it wants if it is to find the best match. It is difficult to match an applicant’s skill set to an ambiguous description of what the organization wants. It is important to create a concise job description with solid expectations so that managers are recruiting candidates who are confident in their skills that apply to the position. In the 2010 article Managing Your Strengths: An Approach to Boost Happy High Performance, Charles Kerns says, “Happiness in the workplace helps sustain high performance.” (Charles Kerns, 2010) An employee that is well-matched to a position with a clear set of objectives has a much better chance of being a positive asset to the organization.

Conclusion A manageable amount of turnover can be good for a company. New hires with fresh ideas can be a very valuable asset. But losing valuable employees can cost an organization money, time and stress. Turnover is costly and can influence the bottom line. Companies should consider four impactful strategies to combat employee turnover. Non-profit companies need to ensure that employees know about available growth opportunities. An employee that can set career goals for growth inside an organization is likely to be loyal to that organization long term. There should be a structure in place to inform employees of advancement opportunities on a regular basis. Human Resources leaders should be expected to investigate employee under performance. In many cases, it is more cost-effective for the organization to help the current employee become proficient, rather than to go through the hiring and training process anew. Managers should be able to inspire and motivate staff. Non-profit organizations should ensure that managers are getting ongoing training and development opportunities. A highly skilled manager is more likely to have a satisfied and happy staff. Non-profit organizations need to develop a plan to aid in hiring workers that will become long-term assets. A job candidate that is a perfect match for the position needed is more likely to have a positive work experience and become engaged with the organization long term. If companies know how to pinpoint problems that are leading to high turnover rates, the problems can be corrected. The key is having leadership with the knowledge and the courage to fix the problems.

References

Buckingham, B., & Clifton, D. O. Phd. (2001). Now, discover your strengths. New York, NY: The Free Press.

Frank, F. D., Finnegan, R. P., Taylor, C.R. & Talentkeepers. (2004). The race for talent: Retaining and engaging workers in the 21st century. Human Resource Planning, pp. 12-25.

Kerns, C. (2010, Spring). Managing Your Strengths: An Approach to Boost Happy High-
Performance,” Kravis Leadership Institute, Leadership Review, 10, pp. 68-81.

Colan, Lee J. (2009). Engaging the Hearts and Minds of All Your Employees. McGraw-Hill.