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What is Different about HR in Not for Profit?

In June I had the opportunity to facilitate two breakfast sessions for Ethical Jobs, Ethical Jobs is a recruitment organisation that focuses on matching jobs in the charity sector to people who want to work for a better world.  The agenda for the breakfast session was all around staff turnover and retention, with a focus on the things that Not for Profit’s (NFP) could do differently to keep their employees longer.

A few facts, as most NFP think that they have a materially higher turnover in staff than the commercial sector.  The truth is if you look at the average of all for-profit industries (retail through to capital markets banking) the average turnover is only 1% lower than what is across all NFP (from working with guide dogs through to terminally ill children).  The challenge in comparing staff turnover using averages across all organisations is not that helpful.  There is a significant amount of benchmark data in the “for profit” market which breaks down turnover by industry types, for example, retail versus capital markets banking.  Unfortunately, there is minimal breakdown by “charity type” (working with disabilities, to animal rescue to food recovery) in respect to most benchmark data.  Without great benchmarks, the best thing to do is: -

Start measuring your turnover, pick a specific method or formula and stick to that for at least 12-18 months before you even consider changing and look at the trend for your charity/organisation.  Stop worrying how you compare to others, focus on what your data is telling you and therefore what you can do about it.

While NFP does have slightly higher staff turnover on average, the primary reasons that people leave are slightly different. Some of the top reasons why individuals leave NFP are: -

Mismatched expectations – they thought that when they joined this amazing charity that they would get a chance to help drive real change in the world.  In reality, the role is not that much different than a similar role in a commercial organisation, and the employee loses heart and leaves either to another NFP whom they think is promising more or back to the commercial world.  If you are an HR professional in an NFP and this is one of your top attrition causes there are a few things you can do:

1)  ensure the job descriptions for the roles reflect both the good, bad, wonderful and ugly of the position.

2)  make sure the hiring manager does not oversell the position regarding what the individual will get to do once they join.  

3) and if you are in a high stress or similar type of environment you might want to consider role playing or other techniques to make sure the candidate knows exactly what they are potentially signing up.  One of the examples given during the workshop was from a charity that works with difficult teenagers and during the interviews they swear and use very colourful language with the candidate.  If the candidate blushes too much, most likely they will not survive the requirements of the role no matter how much they think they can.

Training and Development - All organisations have challenges when it comes to the desired spend on developing staff and the amount of money available.  In the NFP sector, this can be even worse, as donations, grants and other funding are expected to be spent on the “cause” and not on people.  Charities find it hard to secure the funds for significant development of their staff beyond what is mandatory and necessary for the role.  This area will be a challenge as there will never be enough “untied” funds to meet the development needs, but there are a few things that can be done. 

First, manage expectations regarding the amount of development an individual will receive per year (see mismatched expectations above),

Second look for alternative ways to get development for your staff member that does not involve spending money.  Could they do a secondment to one of your major donors for a week?  Is there a consultancy that you use on a pro-bono basis that might give you a slot on one of their management development programmes?  Looking for creative ways to source the development programmes you need for the staff that you want to invest. 

The third area to consider is seeking donations or grants that are specifically focused on people development, getting one of your donors to understand the need to build out your internal talent as well as delivering a benefit to society through the charitable work that your organisation does.

Coaching and performance feedback – Many organisations don’t do a great job at coaching and performance feedback.  Part of the root cause is the lack of training for people managers (see point above), and the other issue is time.  In the NFP sector, both of these causes are frequently demonstrated.  In addition to not training new managers the skills needed to coach and manage performance, the focus of the managers tends to be the cause of the charity.  If a child needs help, a disabled person requires support or a family has a crisis, these are the top priorities for the manager.  Unfortunately, time to coach and manage the team moves to the bottom of the priority list.  HR and people managers in NFP need to keep coaching and performance management at the top of the priority list no matter how difficult that can be at times.

There is no magic to staff retention, and at the end of the day, with the demographics changing in the workforce (boomers retiring, everything you have read about Millennials) and the level of stress and the environment that many NFP’s works in will cause staff to leave.  All organisations should develop workforce plans to determine what is the appropriate number of individuals in a particular role, as sometimes it is more cost effective to over staff versus constantly hiring and losing productivity.  HR’s role within NFP’s is critical to planning out the workforce and building interventions that will allow you to retain the staff for the right period.  HR’s role in an NFP is the same as any commercial organisation, just sometimes the focus needs to be in slightly different areas.

Article by Mary Sue Rogers

Posted On : 27-06-17

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