Nonprofit Network Blog

Fight Back Against the Hidden Costs of Employee Turnover

Monday, February 26, 2018 2:00 PM | Tom Williams (Administrator)

Tom Wiliams

Capacity Builder

When it comes to mission achievement, I have yet to meet the individual that has the ability to pull it off entirely by themselves.

In fact, one consistent observation I’ve made over all these years in the nonprofit world, is that mission is achieved only by teams. 


Observation #2: Mission is achieved deeper and faster when a team is stronger and more passionate.

Conversely, the teams that constantly rebuild, are not cohesive, and don’t rally around results struggle with delivering on that mission. Too often, organizations that struggle at mission opt to seek out new programs to deliver or revise what services they are providing, thinking they will come across a programmatic answer.  

The inconsistency in staffing keeps the organization always in the beginning half of the learning curve. This is an exhausting place to exist.

Research from GuideStar and Nonprofit HR tells us that nonprofit organizations have a staff turnover of about 19% annually. 

That rate has a significant impact. 

Some expenses of staff turnover are hard expenses, but the hidden costs are drastically impacting your organization. These costs can include:

  • Lower productivity now that you have a vacant position (which will continue until the replacement has come up to speed)
  • Overwork of the remaining staff to cover the vacancy
  • Lost knowledge and external relationships that are no longer with the organization
  • Interviewing costs (for you and others)
  • Training (or mentoring) costs for the replacement

Some estimates have calculated the above costs at over 150% of that staff person’s salary. 

And yet still, many of us just accept the turnover as our nonprofit reality. That acceptance is made easier by the fact that many of the true costs of staff turnover are hidden.  Hidden or not, the costs are still impacting you financially. This is a part of our world we actually can influence.  By striving to retain our people, we can build not only a higher performing crew, but also a vast savings of money.

As organizational guru Jim Collins tells us, getting the right people “on the bus” (recruitment) is key to success.  And keeping them on our respective buses long enough to coalesce into a high functioning team (retention) is how we transition from a good team to a great team .  

High functioning teams hold each other more accountable, have deeper commitment to the mission and focus on getting results.  This is a formula for more mission accomplishment.

Imagine investing those resources—financials, mental capacity, more available time, increased productivity—elsewhere in your organization. Building the team for more mission and obtaining significant cost savings in the process.  Makes becoming an employer of choice sort of attractive doesn’t it?

You cannot afford to to ignore it.

Join us on March 15 as we dive into the world of HR and employee management and retention at a workshop facilitated by area HR professionals

Managing and Retaining Our Biggest Asset: Our Employees.

Nonprofit Network

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Phone: (517) 796-4750

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