Non-Profits Can Survive Funding Cut-Backs

Child care centers, programs for troubled youth and developmentally disabled adults, senior citizens centers, counseling for troubled families, substance abusers; these are examples of human services funded by government at the federal, state, county or local levels. The troublesome path that the U.S. economy has been on during the past year has resulted in government cut-backs in support of human service organizations. At the same time, the non-profit providers of these services face escalating costs for labor, energy and supplies. This scenario puts many human service leaders on the hot seat in terms of figuring out a way to survive the financial squeeze.

There’s a way out however, that will allow the organization not only to survive, but to thrive. The solution is not magic and may involve re-designing a number of the systems whose inertia keep these organizations running from one day to the next. The solution to non-profit survival in this troubled economy is for organizations to reduce staff turnover and do so dramatically.

Staff turnover is very expensive; some say as high as $7500 per incident for entry level staff. That means that if you have 100 staff and a 20% annual turnover rate your cost of turnover could easily be $150000. That’s a lot of money that could be redirected toward program improvement. What are the costs? Extra hours allocated to human resource operations; huge overtime expenses; increased costs of advertising, screening, background checks, physical exams, orientation. It means that experienced staff will be unavailable to take advantage of growth opportunities and revenue may be lost under fee for service contracts.

Staff retention on the other hand results in measurable program changes that make the organization stronger: reduction in critical incidents and medication errors; less time explaining program errors to licensing people; more complete program documentation; service plans that are prepared, revised and delivered in a timely and competent way; goals that are actually achieved and most importantly, clients with smiles on their faces because they have the opportunity to work with staff whom they know and trust.

Staff turnover is just too expensive; it raises expenses and lowers income. You must do something about it! But what? Here are ten steps you, as a non-profit leader can take right away to reduce staff turnover.

1. Get rid of the idea that to reduce turnover, everyone needs a pay raise. Turnover is not about money…most of the time at least. Salary increases, as nice as they are, have a very short term effect on employee morale and performance.
2. Secondly, organizational leaders need to change their attitude about turnover; rather than seeing it as an unavoidable cost of doing business, they need to look at turnover as something that they can impact. Even when there is only a small improvement, the positive change in organizational operations can be remarkable.
3. Say, “thank you”; acknowledge hard work. Sometimes a simple word of appreciation is energizing.
4. Look for non-financial but concrete ways to reward good work. Have an employee who’s child is in a play at school? Send her home two hours early so she can attend.
5. Engage all staff with the mission of your non-profit. Show them repeatedly how their job relates to the mission and what they can do to make their job even more important to overall success.
6. Make sure everyone is involved in a development plan that makes the organization stronger in the future and helps them to grow too; their appreciation for the Non Profit Growth opportunities you have given them will pay off in outstanding loyalty.
7. Encourage positive relationships amongst staff. Give them opportunities to really get to know each other and appreciate each other’s skills. Staff who enjoy working together are less likely to leave.
8. Train supervisors. People don’t leave jobs, they leave supervisors. Make sure supervisors have the people skills to be successful.
9. Make good hire decisions. Involve potential work team colleagues in the decision. See how the applicant responds to what is positive as well as what is negative about the organization.
10. Finally, everyone needs to know that there is a campaign to reduce turnover. Openly discuss how it will be done, what the targets are and how the savings will be redirected.. Make it everyone’s campaign.

There are many other suggestions. No doubt everyone who hears about the campaign will have an idea; that’s a good thing. Don’t wait to begin until you have thought of everything possible. Begin now, with the ideas that you can implement today. Every day you wait the difference between income and expense becomes larger; you can’t afford to wait.

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