While wages have remained fairly flat, 2016 may be the year that workers see their biggest wage increase in several years. According to Korn Ferry Hay Group’s 2016 Salary Forecast, real wages, which are average increases adjusted for inflation, will be about 2.7% in the United States this year.
In addition, the Chronicle of Philanthropy reported a 2.6% increase in giving expected for 2016. With nonprofits employing about 10% of the workforce in America, it’s important to consider how this giving increase might flow to nonprofit workers.
Skilled and professional-level employees are in highest demand, and retaining these employees means knowing what’s important to them — whether it’s wages, benefits or something else entirely.
That “something else entirely” is what most nonprofit employees are looking for, according to UST’s Nonprofit Employee Engagement and Retention Report published last year. According to the study of almost 1,300 respondents, which included both management and non-management level nonprofit employees, factors that ranked highest for job satisfaction were:
- Strong affinity for the organization’s mission or purpose
- Culture or workplace environment
- Flexibility/work-life balance
- Sense of purpose/calling in their work
- Benefits and/or perks
Compensation was ranked 13th on that list of 17 factors. And Millenials? They felt even more strongly about those factors affecting their happiness at work.
But nonprofit employees weren’t immune to wanting higher wages. Particularly the report noted that:
“Compensation is an underestimated need, specifically for those who do not feel fairly compensated. Once employees feel fairly compensated, money is not a source of additional satisfaction. Bringing employee wages to a level consistent with expectations and/or needs for living, will allow them to focus on more important things that directly serve your mission.”
So how can nonprofits continue to be competitive employers in an economy with rising wages?
- First, determine if compensation is a source of major frustration. An employee survey can help identify how employees feel. And doing some salary comparisons with similar organizations in your area can give you a better picture. Lots of tools exist to do this (including UST’s HR Workplace for Nonprofits, which you can try for free). If you can’t afford to pay employees more, and they are feeling highly underpaid, consider what else you can do for employees to make them feel appreciated.
- Culture, mission, and purpose are key drivers of satisfaction for nonprofit employees. It’s important to communicate purpose to employees to keep them engaged from the outset.
- Setting goals that directly affect the mission, and celebrating their successes, is one of the best ways to keep employees engaged and increase retention.
- When hiring, focus on the right fit for culture and the job because the better employees get along,the more satisfaction they have.
- Strong leadership is absolutely vital. Goals, feedback, supervisor communication, autonomy, and resources provided to employees to do their jobs all have an effect on satisfaction and/or employee turnover. A focus on training management will strengthen the sector.
- Nonprofits should monitor the stress of their employees. Stress and workload lead to higher rates of turnover, and looking for ways gather feedback on stress-levels and come up with ways to ameliorate job stress can be important to retention. Whether that means hiring one additional employee to spread the workload, finding ways to streamline processes, or simply acknowledging hard work.
Download your free copy of the Nonprofit Employee Engagement and Retention Report today to learn more.