Staff turnover is an issue for any organization, but especially for those in the nonprofit sector, where the all-too-typical resource crunch means that talent retention strategies are few and far between.
The two big questions that every nonprofit needs to answer:
- Why are staffers leaving?
- What can nonprofits do to retain talent?
According to the latest research from Nonprofit HR, the top two reasons for voluntary employee turnover – “better opportunities elsewhere” and “invisible career paths” – both come down to a lack of career growth. Disengagement with the culture came in third, followed by benefits and pay.
Fortunately, all of these motives can be addressed with one cost-effective strategy: a commitment to professional development.
Why the talent pipeline matters
Past research from The Bridgespan Group shows that nonprofits of all sizes fill only 30 percent of their C-suite roles with internal candidates. This is a multi-dimensional mistake. Developing and hiring internally doesn’t just mean slowing the merry-go-round of employee churn, but also:
- Skipping costs in productivity: Outside hires can take two to nine times longer than internal hires to get up to speed.
- Minimizing risk: According to multiple studies in the for-profit sector, 40 to 60 percent of external C-suite hires fail within the first 18 months.
- Giving employees what they want: Worker demand for learning, mentorship, support, and career-advancing opportunities is only growing.
Establishing a culture of professional development takes effort, thought, and commitment, but what it doesn’t require is much money. As you’ll see, formal training is only a small part of a reliable development formula – additionally cost-effective through GCN’s Nonprofit University, a nationally leading provider of virtual training for nonprofits, which offers affordable courses in all areas of nonprofit management, from fundraising and marketing to leadership, finance, human resources, and more.
How employees – and the talent pipeline – develop
The first step is easy enough, but means plenty: “When you first sit down with a team member and say, I want to develop your talent – that conversation alone can be a game-changer,” reports former Camp Twin Lakes CEO Eric Robbins.
So what’s under discussion in this kickoff conversation? In short:
- The employee’s competencies and skill gaps.
- Where the employee sees themself in the coming years.
- Challenges that the employee finds intriguing, including those already on their plate and those faced by others in the organization.
With those factors in mind, you can work together on a plan for professional development using the 70/20/10 principle: 70 percent through experience, 20 percent through mentoring, and 10 percent through formal training. The Center for Creative Leadership formulated this approach by looking at research into how adults learn best; you can see the principle at work in disciplines like athletics and musical performance, where daily practice – the experience component – plays an outsized role.
That means the vast majority of professional development should come from on-the-job “stretch” assignments. Many of these stretch assignments are as simple as changing up people’s responsibilities to give them specific experience with a desired skill set or knowledge area.
Mentoring and coaching means connecting an employee with someone who can help them develop and hold them accountable for meeting their development goals. Current leadership is the first place to look for mentors, but you should also consider professional associations, retiree groups, and other nonprofits (or for-profits) you’ve developed relationships with.
And because formal training comprises only 10 percent of the formula, the financial cost of talent development shouldn’t be high. (Again, GCN’s own Nonprofit University provides affordable, trusted, year-round training opportunities in every nonprofit competency area for all skill levels.)
But how much time, exactly, are we discussing? Google is known for encouraging employees to spend 20 percent of their on-the-job time learning new things, but assuming your resources aren’t quite as extensive as a multibillion-dollar corporation, 10 percent might be more reasonable. For a full-time employee following the 70/20/10 approach, that means a year of learning involves roughly:
- 145 hours of stretch assignments
- 42 hours of mentoring or coaching
- 21 hours of formal training
The time required is significant, but the return is immediate: Staff members are energized by the investment in their careers and the clarity around what it takes to advance in the organization, and your organization gains a trustworthy leadership pipeline.
Getting your talent development process underway
Here are the four steps GCN recommends to get this process going and keep it on track:
- Identify the competencies needed for your organization’s future success. Think skills, capabilities, and experiences that enable staff to achieve their goals and to get better every year. These include job-related competencies, both universal (like teamwork) and role-specific (like donor management), as well as the leadership competencies your organization values (both today and in the future).
- Assess individuals against both goals and competencies. The Bridgespan Group’s Performance-Leadership Matrix is a helpful tool for examining each individual’s strengths and weaknesses in terms of job and leadership competencies, as well as where they – and the organization – can develop.
- Co-create development plans. Using the 70/20/10 approach, craft a plan with each employee to pursue two or three competencies. Start by educating all staff about the 70/20/10 approach. Be sure stretch assignments are perceived as a way to advance, rather than “just more work,” by a) crafting assignments that will develop a specific skill or knowledge area; and b) identifying current assignments that can be deprioritized to make space for “stretching.” Bonus tip: With all development plans set, look for common needs and find ways to address multiple people at once.
- Track progress, learn, and improve. Start simple by focusing on activities: Making sure all your people have plans in place, meeting with individuals regularly to see how they are progressing, and checking to see what is working and what isn’t. Learn and improve from there.
The hardest part is changing daily behavior: Implementing, and regularly discussing, professional development plans for each staffer means a significant culture shift. The promise of this approach can only be realized, for staffers and the organization, if you refer to development plans often and prioritize the work in them. Meeting for an hour each a week is a good starting point – just be careful not to make these meetings a kind of performance review.
Stretch assignments are commonplace in nonprofits – there is often too much to do and not enough resources – but matching each person to the right stretch assignment takes practice. You may not know the right assignments when you first start development planning, but with the plan in mind, opportunities that match particular staffer needs will often arise in the course of broader organizational planning.
To find mentors and coaches, think outside the box and cast a wide net. When appealing to potential mentors, don’t forget to play up the benefits in terms of delegating tasks (so long as they fit specific development goals), as well as making new connections, adding to a sense of purpose, and bettering your organization’s capacity to deliver on the mission now and in the future.
GCN is here to help
Our Nonprofit University provides affordable training in every area of nonprofit management, with options for those at every level of their career. In addition, The Nonprofit Consulting Group specializes in crafting strategies for organizational resiliency, including talent development and succession planning. Check out our schedule of upcoming educational events and reach out to us anytime with your questions.
Marc Schultz is communications editor for GCN.