Article In Brief:
The Problem: In November of 2022, the resignation rate in the US reached a 20-year high. Seen by many labor economists and HR professionals as a trend hastened by the Covid-19 pandemic, mass resignations have altered the employment landscape in many ways including compensation and remote working flexibility. For nonprofits and philanthropies, understanding what employees want is crucial to reduce or avoid long-term damage to the sector’s ability to function effectively.
The Context: Many hiring and retention issues in the nonprofit sector predated the pandemic.
The Solution: To understand how resignation trends impacted nonprofits, sector leaders must look below the headlines to understand employee motivations. There they will find significant differences (and solutions) from their for-profit counterparts including posting better job descriptions, creating a culture of belonging, and, yes, offering better compensation.
Following the initial effects of the Coronavirus pandemic, the work world grew terrified that workers would start to voluntarily leave their jobs en masse. This was, in part, due to the ominous prediction of professor of management Anthony Klotz, “The great resignation is coming.” While it’s a catchy phrase, it does not accurately depict what has been happening—certainly not in the nonprofit sector.
Here in the United States, the so-called Great Resignation involved a record 4 million Americans quitting their jobs in April 2021, followed by an approximate 3.9 million in June 2021. By August, according to a PricewaterhouseCoopers survey, 65% of employees said they were looking for a new job, and by November, the country’s “quit rate reached a 20-year high.” These statistics could indicate that American workers are refusing to resign themselves to the old norm.
That is, the reasons behind people leaving their jobs to look for better employment seemed to center on the realization that their employment failed to offer what they needed. According to Pew Research Center, the top drivers behind the exodus include low pay, lack of advancement opportunities, and feeling disrespected at work. Roughly half of the people surveyed also cited childcare issues or lack of flexibility to choose their hours, followed by having good benefits, such as health insurance and paid time off—both of which the pandemic threw into stark relief.
Certainly, these factors cut across both the for-profit and nonprofit sectors. However, in the nonprofit world, there are other factors at play.
In a sector long known for far-too-modest salaries, tireless work, and the perceived requirement of on-site presence, the time and space at home during the Covid shutdown afforded many nonprofit employees the opportunity to step back and take stock of their lives. And more than a few nonprofit employees realized that while the work might be fulfilling in many ways, it severely lacked in other areas. Of course, these areas were like the complaints levied against for-profit employers: flexibility, community, autonomy, and compensation to name a few.
But unlike their for-profit peers (more than a few of whom might have left the comparably high-paying corporate world for nonprofit work), employees in the nonprofit sector didn’t quit, they took stock Those who actually left positions were seeking a different set of so-called benefits in addition to traditional benefits like salary and health insurance. That is, they re-evaluated what mattered most to them personally: their families, their self-care, and organizational attention to and work on anti-racism and inclusiveness.
While challenging for the sector to navigate, this re-evaluation has been a positive shift and, quite frankly, one that’s been a long time coming. The collective demand of the workforce has pressured nonprofit organizations to raise the bar in what they offer to current (and prospective) employees. In fact, savvy organizations should pay attention to three key areas to attract, retain, and grow their staff.
- Offering Better Compensation
The first area is salary (which should surprise few who work in the nonprofit world). Today’s candidates are (finally) demanding better salaries and better benefits. This newfound increase in compensation was long overdue and necessary, not just because of recent increase in inflation; low pay was a problem for nonprofit employees pre-pandemic. Now, nonprofit organizations need to pay their employees properly, so they can earn a wage that allows them to live and work in some of the most expensive cities in the world.
For starters, every organization should complete a compensation equity survey to make sure they are paying their employees equitably. Organizations also might consider departmental bonuses based on meeting benchmarks (much like those offered by their for-profit peers).
Beyond monetary compensation, many quality candidates are looking for positions that allow them flexibility to work remotely, at least a few days a week. Nonprofit organizations often rely on their executive directors and fundraisers to be on site to demonstrate the direct impact of gifts from their donors via visitor tours, for example. This perceived necessity to be on site is especially apparent in direct service organizations such as hospitals, food banks, universities, and social service agencies.
But with the climate emergency demanding we rethink how we consume fossil fuels as we go about our business day, and the never-ending concern over the latest Covid variant, there is little structural understanding of the true cost of this facetime. Put another way: is it really worth your ED logging miles and getting sick to placate donors? And while there might be merit in being on site a few days a week, the Covid-19 lockdown proved that most of these jobs can be done very effectively from home.
Organizations must take a look at their own requirements for in-person work to see if these continue to be realistic expectations. The pandemic forced us to change how we did things, and we now need to incorporate those changes into how we operate in the future. If nonprofit employers want quality talent, they must learn to be flexible about in-person requirements, potentially as a means to counteract the inability to offer competitive (but still offering adequate) compensation.
- Posting Real Job Descriptions
In an increasingly competitive applicant pool, candidates demand realistic job descriptions and responsibilities. For example, asking a single person to serve as Executive Director—including running an organization and managing teams that are often far too small to be effective while being paid a low salary for the good of the cause—is obviously unfair. And although this has traditionally been the way, this approach is no longer acceptable under the guise of the nonprofit sector’s commitment to social good.
Instead, nonprofit executives need to step back and take time to strategically plan the future of their organizations. They need to right-size salaries in accordance with responsibilities (and vice versa), including continuing to increase their employees’ salaries. Re-evaluating both short- and long-term plans also helps significantly in prioritizing the most important staffing needs to reach the organization’s goals.
Salary transparency is a critical component of solving the ongoing problem of equity in nonprofits, and the state if CA has finally recognized that by enacting law. Posting benefits are equally important as is posting an equity statement and/or land acknowledgement.
But this cannot be the work of the executive leadership alone; nonprofit board members need to help realize these needs. It has been proven that job satisfaction has everything to do with realistic expectations and generous salaries and benefits to match.
- Creating a Culture of Belonging
Lastly, nonprofit workers are looking to organizations to make real, concerted efforts to educate and act on diversity, equity, inclusion, and belonging initiatives that better reflect the communities they serve. Put simply, many candidates are looking for more than diverse teams (as this is the bare minimum). They are also evaluating prospective employers to determine whether they are working on equity and inclusion.
That starts with asking a series of questions:
Have you and the staff done anti-bias, anti-racist, and/or inclusion work? (See “7 Guiding Principles for a JDEI Policy That Isn’t Just Hot Air.”)
Does senior management include diversity?
How about the board?
Has everybody gone through anti-racism/diversity training?
More generally, internal evaluation should continue through a number of other indicators including democratization of philanthropy. These are factors that provide a true sense of inclusion.
Re-Evaluating at an Organizational Level
Organizations looking to hire the best and brightest must do their own re-evaluation. The aim should be to reflect the mission in all facets—from the gifts they accept, to the policies they create, to the work they do, and the people who help lead the charge. (Read more about improving equity and effectiveness of your hiring practice.)
No one has been unaffected by the pandemic. Its impact has led the most thoughtful among us to rethink what they do, where, when, and most importantly, why. The best talent hasn’t resigned at all. They’ve re-evaluated and are energized by this process. So, if you care about hiring (and retaining) the best and brightest, meet them where they are.
Learn more about workplace ethics, accountability, diversity, harassment, and creating an employee handbook by attending the Human Resources & Volunteers class on Saturday, August 19 from 1 – 5 pm as part of the Sunshine Certificate in Nonprofit Management.
Source: Blue Avocado, the e-magazine of Nonprofits Insurance Alliance®, offering practical tools and tips for nonprofits, by nonprofits. Nonprofits Insurance Alliance has been a preferred partner of the Florida Association of Nonprofits since 1991, when they were formed by an Act of Congress. They are a group of 501(c)(3) nonprofit, tax-exempt insurers whose purpose is to serve 501(c)(3) tax-exempt nonprofit organizations by providing a stable source of reasonably priced liability insurance tailored to the specialized needs of the nonprofit sector.
https://blueavocado.org/hr-and-employment-issues/great-resignation/
Author: Victoria Silverman on February 27, 2023. Victoria has served the nonprofit sector for more than thirty years, leading tailored executive recruitment services and strategic counseling.