Carol is the proud founder of a not-for-profit organization. Her team has grown in size to 12 people over the last 15 years; together they have helped thousands of people in the community. The organization is at the next pivotal step in its growth and things look promising for the future.
Despite this success, Carol suffers from a lingering worry that has been slowly growing: in the last the 3-4 years, there has been somewhat of a revolving door amongst her staff. She’s spent a considerable amount of time and effort in recruitment, as more and more employees were leaving to pursue other endeavors elsewhere. She has had to devote more and more energy in replacing departed employees rather than doing actual work to help the community. This was having a ripple effect on her stress level and that of the remaining team members carrying a heavier workload until an empty position is filled.
But last week’s resignation was like a slap in the face: her star employee who’d been an integral part of the team for 5 years now, quit. Out of the blue. Carol never saw it coming. The mix of hurt, disappointment and frustration will sting for a while.
“Why didn’t he discuss anything with me prior to making a final decision to resign? Who else is thinking of leaving and not telling me anything? What is causing this increased turnover? Is there something I’m doing wrong? How will I keep this pace up if people keep leaving?”
She didn’t really know what to make of this: what to do, where to start…
What’s happening – a context of shift of power
More and more employers are living a similar story to Carol’s. The truth is, whether in the non-profit, public or private sector – no one is spared. Aging population, close to full employment, the shortage of workers. Nowadays technology enables companies to hire remotely. There is a rise in self-employed workers and career changes. These factors make it harder and harder to find qualified employees, who have many options to choose from – the challenges will keep coming.
The reality is that employers no longer have the big end of the stick – today, job seekers do. So if employers don’t adapt to this reality, they will find it hard to compete, attract, hire, retain and engage their most precious competitive advantage: their people. Various studies have shown that the direct and indirect costs of employee turnover vary between 30-150% of the annual salaries in both for profit and non-profit organizations. Moreover, 75% of workers consider themselves as “passive candidates”, with little or no long-term commitment to their employers and 66% of millennials, who will soon be the majority of the workforce, expect to leave their current organization by 2020!
Zooming into the not-for-profit sector, if we take a closer look at the CSMOÉSAC 2015 Benchmarks in the Social Economy and Community Action Report, we find they predicted the largest wave of employee departures would occur in 2017. It also states that between 2012 and 2015, 32% of not-for-profit organizations had difficulty filling one or more roles. For that same time period, 44% of managers were concerned with their succession planning. Carol is not alone!
Employers need to adapt to changing expectations among employees, who now seek more than good salaries, full-time employment and job stability. Professionals in particular now seem to place more value on flexibility, creativity and a better balance between the demands of the workplace and their family situation. Employees are looking for more “appealing” employers, notably those who have managers (at all levels) that employees can trust. Among generation Y employees, for example, only 49% believe they can trust their managers, but 80% believe such trust is important.
What can be done?
To help reduce employee turnover, employers need to meet these new expectations—to become “appealing” employers, who create an environment where there is trust, where people can be themselves, where employees know that their managers care about them, and managers believe that putting their people first is the best way to improve efficiency and productivity.
In this endeavor, it’s important not to fall into the trap of opting for a fashionable quick-fix superficial solution. The first step is to carry out a thorough internal analysis: to know yourself and your staff, to find out what’s working, and what isn’t. Only then can you look for solutions that are adapted to your own situation. Taking a close look at all managerial roles will be a crucial part of any effective solution. Investing in those holding these positions, will be highly beneficial.
Are you living a similar story to Carol’s? Perhaps the time has come to take that first step and contact us to help you carry out a solid diagnosis of your workplace environment to help change your story narrative.
Thank you to our collaborator Isabelle Kolish-Dufresne for contributing this blog post.