According to a hiring survey by CareerXroads, here are the top ways employers are recruiting and hiring employees today.
Employer referrals make up 25 percent, a quarter of recruits. Many small employers offer cash or other incentives to encourage employees to participate.
Nearly another quarter (23 percent) of recruits hear about the job through the employer’s career website page. Make sure the organization has a career website page where you list (or link to) open positions and highlight your organization's’ mission and culture.
According to the hiring survey, 18 percent of candidates are referred by an online job board. Small nonprofits can use free job boards such as Craigslist.com and/or job board aggregator sites such as SimplyHired.com and Indeed.com. Organizations can also post paid job descriptions to general boards such as Monster.com, CareerBuilder.com, and GlassDoor.com, and to local or regional job boards and newspapers.
College candidates (recruits from college or within zero to two years of graduation) represent five percent of recruits. Nonprofits, however, have long relied on university recruiting programs to fill entry-level positions and gain access to workers with up-to-date skills. Plus, small nonprofits offer recent college grads something that many larger organizations cannot -- opportunity for fast growth and front-line experience. Internships and volunteer programs are another way to get fresh talent in the door.
While social media is still a small percentage of how candidates say they heard about a job (three percent), it is a growing strategy for nonprofits. As more job seekers use social media and mobile devices to look for work, nonprofits are using social media as a low-cost way to recruit, source, and screen candidates.
Employee Retention Ideas for Nonprofit Organizations
For a nonprofit to thrive in today’s economy, finding and retaining the best employees is important. This is especially true for small nonprofits competing with larger organizations, and larger budgets, for top talent.
Happy Employees Help Nonprofits Thrive
Frequent voluntary turnover has a negative impact on employee morale, productivity, and company revenue. Recruiting and training a new employee requires staff time and money.
Some studies (such as SHMR) predict that every time an employer replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that's $20,000 to $30,000 in recruiting and training expenses.
But others predict the cost is even more - that losing a salaried employee can cost as much as 2x their annual salary, especially for a high-earner or executive level employee.
So how can a small nonprofit keep their employees from jumping ship? As our workforce becomes increasingly mobile, a well-thought out employee retention strategy becomes just as important as recruitment (if not more).
Here are seven best practices for nonprofit employee retention.
1. Understand Why Employee Retention Matters
Employee turnover costs organizations time and money. Turnover disrupts the flow of a functioning workforce. When an employee leaves there can be a significant knowledge gap left, creating more work as the remaining team members pick up the pieces.
While some turnover is inevitable, having an intentional employee retention strategy in place mitigates the turnover, and its costs, for a nonprofit.
2. Benchmark Your Employee Retention Rate
Do you know your organization’s current employee retention rate? Before you start thinking about formal employee retention activities, calculate your employee retention rate and track it periodically, such as quarterly or bi-annually.
The calculation is simple. Divide the number of employees who left during a period by the total number of employees at the end of a period to get the percentage. According to industry standards, 85% or higher is considered a healthy employee retention rate.
3. Use Retention Strategies, Not Guesswork
There are several theories in employee retention strategies. Here's a sample of four common theories:
Positive Organizational Behavior is defined by Fred Luthans as "the study and application of positively-oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today’s workplace"
Valence, in Victor Vroom's Expectancy Theory, is the extent to which an employee's goals match the company's goals. The more aligned these are, the higher the employee retention rate.
Abraham Maslow's Hierarchy of Needs theorizes that companies should first take care of an employee's basic needs, such as job security, payment, and health benefits, and then advance to bigger aspirations, like his or her place in the company.
How important is it that employees feel they are being treated fairly? According to John Stacey Abrams' Equity Theory, if a worker feels he is getting what he considers to be fair for the job he is doing in return, he will be happy and remain in the position.
4. Don't Assume Employees Are Happy
One of the worst mistakes a small nonprofit can make is to assume that, because an employee is still there, he or she is happy.
Schedule regular, one-on-one reviews with employees. These review meetings serve as a forum where the employee can receive constructive feedback.
Feedback is important. Even the most productive employees should be given feedback as a part of the retention strategy. Studies show employees not only want acknowledgment for work done well, but also want constructive criticism and routine review of goals and expectations. This makes an employee feel valued and helps keep morale high.
Conduct regular, formal evaluations. Employee evaluations are also a good time to get feedback from employees on what will make them happy. With a retention strategy, always keep a balance between what the employees want and what's best for the organization.
5. Health Benefits are a Key Part of Employee Retention
Health benefits are a vital part of an employee's compensation package, and thus an important strategy for employee retention.
Work with an insurance agent or broker to evaluate your nonprofit health insurance options including private exchange and individual health insurance premium reimbursement.
If the organization can't afford a group health insurance plan, or cannot meet minimum participation requirements, consider a premium reimbursement plan. Premium reimbursement allows your business to provide employees healthcare allowances for their individual health insurance policies. This is an alternative to an employer-sponsored group health insurance plan.
6. Provide Different Benefits to Different Employees
Turnover of certain employees may be more costly than others, thus it is common to provide different levels of benefits to different classes of employees. This is routinely done by major corporations. For example, office assistants are compensated differently than program directors.
Because health benefits are such an important part of compensation and retention, why not provide health benefits that vary by class of employee? Nonprofits can do this with premium reimbursement allowances.
As there are no minimum or maximum contribution requirements with premium reimbursement, a nonprofit can design their health benefits plan to fulfill their exact recruiting and retention needs.
7. Conduct Exit Interviews
Exit interviews provide nonprofits valuable information on the reasons employees seek employment elsewhere.
Develop an exit interview survey that asks for feedback on the work environment, employee benefits, areas for improvement, training, supervision, and workload.
Evaluate the exit interview surveys and incorporate the feedback into the organization's employee retention strategies.
Additional Reading to Help Nonprofit Organizations
Health Care Reform 101 for Small Nonprofits
This "101" article outlines key provisions small nonprofits need to know about health care reform, also known as the Affordable Care Act (ACA) or "ObamaCare". Read More.
How Nonprofits Can Offer Health Insurance
Non-profits value providing health benefits to their employees. But for many non-profits, a traditional group health plan may not be cost effective for employees or the organization. This article outlines how nonprofits can offer health insurance. Read More.
3 Questions Every NonProfit Should Ask Before Choosing Health Insurance
Nonprofit organizations face important decisions about employee health benefits, especially as the Affordable Care Act (ACA) creates new regulations, and new opportunities, for employers. So, what are the key questions nonprofits should ask before choosing health insurance? Read more.
4 Reasons Nonprofits are Switching to Individual Health Insurance
Nonprofits need quality health benefits to attract and retain employees, but with affordable and controllable costs. To gain control over health benefits budgets in both the short-term and the long-term, nonprofits are switching from group health insurance to individual health insurance reimbursement. Why? Read more.
How Individual Health Insurance Reimbursement Works for Nonprofits [FAQs]
This article answers ten common questions about how individual health insurance reimbursement works for nonprofits and employees. Read more.
Finally! Your Nonprofit Can Offer Affordable Healthcare
Due to the changes to the individual health insurance market, nonprofit organizations can finally afford to take care of their valued staff. Instead of providing expensive traditional group health insurance, many nonprofit organizations are helping employees by reimbursing individual health insurance premiums. Here’s why employer-funded individual health insurance is a cost-effective option for nonprofit organizations. Read more.