It isn’t the mission statement, it isn’t the idea, it isn’t product that will make a social impact company successful, it is the people. The type of leaders that are surprised by this statement probably correlate with organizations experiencing high turnover. Any system or organization that treats its people as a fungible commodity — a product to be used until it wears down only to be replaced — will inevitably suffer high turnover.
For some organizations, high intensity work for a fixed time frame is by design. Groups like Americorps, City Year, Peace Corps, and Teach For America are clear about the time commitment, compensation and intensity of the work expected. However, for most social impact organizations, losing top talent is incredibly costly when hiring and training are factored in. This is especially magnified in roles where stakeholder and partner relationships are developed and then lost when staff turns over.
Does my organization have a retention problem?
In order to answer this, it is important to understand the benchmarks in the industry as well as your own data. According to the 2016 Nonprofit Employment Practices survey, turnover rates grew from 16% to 19% from 2013 to 2015 (based on 443 nonprofits in US and Canada). Looking at the Bureau of Labor Statistics across industries in 2017 shows *separation rates for education services at 27%, healthcare and social services at 33%, and state education at 18%
*The annual total separations rate is the number of total separations during the entire year as a percent of annual average employment
Using LinkedIn data from self-declared job changes of its users shows an average turnover rate of 10.9% for 2017. This is much lower than the BLS 2017 average rate of 43% across all industries.
Before applying these benchmarks to your organization, first acknowledge that every organization is unique and explore your own HR data to define a retention metric. Also, consider the law of small numbers, such that if you have a small data set (your staff) and slight swings in staffing can throw off overall retention numbers. The truth is that not every employee that leaves is a loss; it is important to internally define turnover of desired employees and use this as the North Star Metric.
Ultimately if you are losing talented, desirable people earlier than 2.8 years, the organization probably has a problem. Median employee tenure was generally higher among older workers than younger ones. We choose 2.8 years because the median tenure of workers in the US was 4.2 years, but for workers ages 25 to 34 years was 2.8 years. The current generation is the largest workforce and probably a better benchmark if you are hiring younger employees.
There are no shortcuts to solve this problem, however there are some tactics that can help give you an edge in solving the problem. The right place to start is the leader and how they approach leading the staff. It can be very hard to give this kind of feedback to your boss, so perhaps start with the idea of radical candor.
Great books that speak to retention issues
The following books can help leaders gain perspective on some soft skills around managing employees and leading successful companies:
- Drive by Daniel Pink — A happy employee needs 3 things to succeed: Autonomy, Mastery, Purpose (TED Talk). Provide these and people will be happier in their roles.
- Leadership and Self-Deception by the Arbinger Institute — The way we relate to and respond to each other is broken when we deceive ourselves and operate “in the box”. Mistakes are made when we view the people around us as objects rather than people generating a culture of blame. There’s also a short video summary.
- Five Dysfunctions of a Team by Patrick Lencioni — This book helps leaders steer around the following dysfunctions: absence of trust, fear of conflict, lack of commitment, avoidance of accountability, inattention to results. You can also watch a short video summary or a longer talk by Patrick Lencioni here.
- Culture Code: The Secret of Highly Successful Groups by Daniel Coyle — Building safety and belonging on a team through repetition of the message. Learn why “I screwed that up” might be the most important words a leader should say. Check out the short video version by Daniel Coyle here.
- Leaders Eat Last by Simon Sinek — Whether the leader puts themselves or their people first will determine their success with their team. Built on the idea from the military that leaders are the last to eat, will help give you a mantra for managing. Video summary here.
- Radical Candor by Kim Scott — Learn how to challenge directly while showing you care personally. Say what needs to be said to your team to show you care. Watch Kim Scott speak about it at Qualtrics X4.
Retention Policies and Practices
The following are some ideas that have been borrowed from great organizations and leaders to help retain talent and build culture. Keep in mind that these are tactics and simply employing a few of them to solve a retention problem is like putting your finger in the leaky damn. It might work for a while but there still a flood coming if the underlying issues are not solved.
- Measuring talent attrition rate — Pull the data on the past five years of the organization to have a stronger sample size. Analyze the annual number of regrettable staff losses and their tenure. Determine what the median tenure at your organization is and then create incentives to work around that time frame.
- Exit interviews — Consistently conduct exit interviews with employees and save the data. Remember that direct hiring managers should not be giving these.
- Extrinsic vs intrinsic pay — The less appreciated people feel, the more they need to be paid. Consider the balance of extrinsic motivators (money) and intrinsic motivators (purpose) and how your organization reinforces the purpose and value of the work. Read more about these motivators.
- Benchmark pay — While extrinsic motivators aren’t everything, you should still be aware of what the competition pays. Use Payscale.com to see the range of salaries based on job industry, type and location.
- Psychology based hiring — Call centers, a traditionally high turnover industry, have found that setting expectations of the job’s demands will greatly improves retention. Learn more about how call centers think about this.
- Find the bright spots — Analyze why current top performers have stayed. What are the common psychological and behavioral traits?
- Perks! — Watch an episode of Silicon Valley and fill your office with snacks, games, legos, scooters and nap pods. We’re only partially joking: Small creature comforts go a long way and the cost of these perks are valued well beyond the dollars by employees.
- Pulse surveys — These are fast, frequent and simple surveys sent to the staff to take the temperature of the organization before something boils over. See how to conduct pulse surveys.
- Kickball! — DoSomething.org challenges other organizations to fun games of kickball during the summer. Small, employee led events and out of work bonding builds culture and camaraderie over time. Note that DoSomething.org doesn’t stop there: Read their 2017 culture book. Keep in mind family friendly activities such as bar nights might isolate parents.
- Flexible work from home days — If your organization has hired adults, who you trust to get work done without a boss sitting over their shoulder, this is a great perk. Flexibility is quickly becoming a currency for the rising generation of employees. Here is a well written case for work from home to send to your boss.
Turning into the skid: A fellowship strategy
People that drive in winter conditions know (or should know) that should your car go into a skid, the correct action is not to slam the brakes or gas. Instead, the correct action is to turn the wheels into the direction of the skid, gently adjusting to regain control of the car. So if the back of your car begins to swing to the right, you gently turn the steering wheel to the right to avoid a spin out. Helpful video for anyone planning to drive in icy weather.
If it is clear you have a persisting retention issue, it may be time to change tactics and turn into the skid by adjusting the job. One option is to embrace the roles that have high turnover and create fellowships, or set length job terms similar to the way Teach For America and Peace Corps do. This does three things:
- Sets the expectation for the role length and difficulty so applicants know what they’re getting into
- Attracts a new pool of candidates with skills and life situations that better fit the job
- Allows for predictable turnover intervals that can be planned and prepared for