Today, I had lunch with my parents at their retirement village, a weekly thing we do after church. One of their new neighbors joined us toward the end of the meal, so I talked to him, and listened to the conversation. My father and his new neighbor, Mr. Brown, talked about their long careers working for companies that were big employers in our town that are no longer functioning. My mother chimed in about her father who worked for John Deere for forty-five years. I commented that long careers with an employer is a rarity these days, and I wondered aloud if this is because employers have lost their loyalty for employees, employees have lost loyalty to their employers, or both.
There are many reasons that employees leave their employers. Some employees leave because they do not feel valued by their employers, so they look for a new one that will make them feel appreciated for their contributions. Others leave because they are not a good fit for their organization’s corporate culture and don’t fully share its values. Some leave to start their own businesses and make their own place in the business world. Then there are those who are are not considered essential to the business and are let go for their costs to the company.
Whatever the reason for employee turnover, companies that have a high turnover rate hurt themselves by letting it happen. The hiring process is not simple, and it is expensive. Whether the employee is low level worker, mid level, or executive, the cost of finding a replacement is high. There are costs when placing ads in professional journals and websites, the costs of the HR department that creates the job description and does the search or when hiring recruiting consultants (headhunters) do, the costs of background checks, and most importantly, the costs of what is not getting done by the employee that left the business. The latter cost often means someone else takes over those responsibilities temporarily, on top of their own responsibilities, and both positions tend to suffer.
Employee turnover is also a major problem in the nonprofit sector, especially in the development field. Long term employees in fundraising these days are rarer than hen’s teeth. According to “The Revolving Door: Final Report“published by the AFP, turnover rates for fundraising professionals is every three to four years, and that report sources studies in the early part of this century. In my experience over the last few years, it is more like every eighteen to thirty months, because I notice when organizations that I know are looking for a new development professional, and I mentioned this in an earlier post, “Revolving Doors and Musical Chairs.” This turnover is extremely costly to nonprofits, especially to smaller organizations with smaller budgets, one million dollars a year or less, according to “UnderDeveloped“, a piece published by CompassPoint and the Evelyn & Walter Haas Jr. Fund. Smaller organizations have a much harder time finding new development directors, sometimes taking as long as one to two years. How can they expect to build and maintain relationships with supporters during that time?
Once again, the reasons for development professionals turnover are much the same as those in the business sector. Some leave to find higher paying positions in larger nonprofits that will pay them what they think they are worth. Others leave because they don’t fully support the organizations’ missions and want to find a place where they will be a better fit. Still, others are let go by impatient boards of directors expecting the fundraisers to find success immediately without giving them the time to learn more about the donors and find out what their passions are. Often, those who sit on boards do not understand that it takes time to build the relationships needed to bring in big gifts, or they think that fundraising means events like galas and walks.
In my opinion, if your organization wants to save its money and make its development program more effective, it needs to find a way to cut the turnover rate. It needs to know it can drastically affect the donor relationships and the money that comes in. The longer it takes to replace that development professional, the worse it will be for the organization.
If you take care to let your employee know they are valued, pay them a reasonable salary they can live on and provide them benefits they can use. It increases their loyalty to the job and organization, and it will cost you far less in the long run than if you let the turnover problem continue.