03 Mar 2018 Nonprofit Employees Face Serious Financial Challenges: How Will Your Organization Weather the Storm?
There is a long-term crisis looming for many nonprofit organizations: how to retain employees when working for a nonprofit seems like financial suicide. To help your nonprofit/association navigate the rough waters of an increasingly competitive job market, try these three strategies that can improve your employees’ personal financial outlook.
Understand the Challenges of Nonprofit Work
Thirty years ago, when the nonprofit movement was in its infancy, it was common for nonprofits to feel that they were doing workers a favor by employing them; now the situation is reversed. In a market where unemployment is currently low, where the private sector is offering outrageous enticements, and where the relationship between the cost of living and earnings is widening, nonprofit employees face considerable financial setbacks when compared to their for-profit peers.
Surveys of nonprofit workers demonstrate that the majority of these employees have little to no savings, rendering them unable to sustain retirement or job loss. Upward mobility is limited, to the point where working for a nonprofit can become a serious financial limitation. Nonprofits therefore need to understand how much of a sacrifice an employee may be making to work for them.
Consider the Longevity of Today’s Employees
Baby boomers, who have traditionally made up the bulk of nonprofit employees, are retiring, leaving positions to be filled by younger workers. However, these less-seasoned employees don’t typically have the same loyalty as their older predecessors.
While capricious job hopping is really more of a stereotype, Millennials are frequently less likely to stay with any business for the length of their working life. They often more concerned with the direction of their own careers than the trajectory of their employers, which must be taken into consideration by nonprofits that hire them.
Develop Options for Your Employees
If your employee is faced with the double whammy of a tight financial situation and the desire to switch employment periodically, your nonprofit organization can turn this into an asset. Recognize that your staff members may not be there 20 years from now, but that doesn’t mean they’re a disposable commodity.
Think about extending benefits, like tuition or mentoring, that will help your current employees compete later in the for-profit world. Give them leadership roles and titles that assist with resume building. Your twenty-something staff member of today may become your devoted board member in the future.
What else can you do to make your employees less susceptible to poaching from the private sector by improving their financial stability?
- Pay signing bonuses to help start savings or retirement accounts.
- Provide help with financial planning and investments (hint: savvy board members)
- Give benefits like flexible spending accounts to let employees save tax free for medical emergencies.
- Enlist the board of directors to assist with college scholarships, internships, and letters of recommendation for employees’ children.
- Offer less tangible perks, such as flex time or remote work, to compensate for lower salaries.