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CEOWORLD magazine - Latest - CEO Agenda - Why Nonprofits Must Pay More Attention to Burnout

Education and Career

Why Nonprofits Must Pay More Attention to Burnout

Non-profit administrators have been disheartened by their employee burnout rate since colonists established Virginia State College in 1818 as the first American non-profit institution.

Non-profit employees work for reasons outside of financial gain. Non-cash rewards like self-development and a sense of meaningful contribution are supposed to make up for lower salaries and longer hours.

An average non-profit turnover rate of 19% indicates that many employees aren’t finding this tradeoff valuable enough. Constant, high turnover undermines an organization’s culture, reputation, donations, and sustainability. Estimates for finding and training new, competent employees run from $20,000 to $200,000, depending on the role.

Non-profits simply can’t afford to ignore employee burnout. Non-profit directors and managers must watch for and work against burnout in their staff, or the high costs of turnover will burn their organizations to the ground.

Keeping Employees is Cheaper Than Hiring Employees

The private sector has recognized this fact for a long time. Experienced business owners know that retaining current clients has a higher return on investment than spending to gain new ones. They also accept that this retention doesn’t come free. Non-profits can adapt this mentality to their employees.

The money spent on efforts to retain existing, competent employees will return much higher value to the organization than money spent to hire and train new staff. Investing resources towards retention will support your current employees in becoming more skilled, more fulfilled, and better able to contribute to the organization.

Putting resources towards hiring and training is a high-cost, high-risk game. Not only does recruiting require a substantial investment up front, but the time and money spent training new employees will only pay off for some candidates. That is, if you can find qualified candidates in the first place — a quest that’s become increasingly difficult in the nonprofit sector.

The Labor Market is Shrinking for Non-profits

Relevant publications are sounding the alarm when it comes to attracting top talent in the nonprofit realm. Non-profit consulting firm The Bridgespan Group predicts a “massive talent shortage.” Using the same study, the Harvard Business Review concludes that a non-profit talent deficit makes it overwhelmingly difficult to scale an organization. The article insists that those in the nonprofit sector have no choice but to compete with the private sector for attracting and developing skilled talent.

The best talent can pick and choose from several offers. With unemployment now at a low 4%, the power shifts to the hands of the employees. This power enables them to say no to 70-hour workweeks and subsistence-level salaries, and say yes to higher pay, more benefits, and better work-life balance. Asking too much of your employees with too little in return — no matter how meaningful your cause — will quickly drive them to another employer. 

The Costs of Burnout and Turnover are Severe

A comprehensive study by the Society for Human Resource Management revealed that it takes six to nine months of a current employee’s salary to find and train a replacement for that employee.

Other sources put that figure far higher.

A report from The Center for American Progress found that advertising, interviewing, and training a new employee can cost anywhere from 16% of the salary (for hourly workers) to 213% of the salary for a leadership role.

It’s important for board members (and even donors) to understand that replacing an employee involves:

  • Advertising and outside recruiter costs. For those avoiding Craigslist (for good reason), advertising on non-profit sites starts at $50 per month. Experienced, professional recruiters charge several hundreds or thousands of dollars monthly.
  • Staff time spent in interviewing, which is taken from important projects. Non-profits are all about passion. Constantly interrupting your employees’ momentum with interview meetings has an impact on organizational goals. Expect to see a delay in projects during the hiring process.
  • Staff time spent on-boarding and training a new hire. Whether it’s for waitressing, canvassing, or running the front desk, training a new employee takes extra time and effort out of your current staff. Everything from explaining processes and answering questions, to teaching the employee how to use all software and programs, can slow the productivity of your team.
  • Loss of productivity between the old and new hire. Even with amazing training, you can’t expect a new employee to be an ace right away. There’s always a learning curve, as a new team member gets acclimated. Some estimate that it takes 2 years to get an employee up to full capacity.
  • Loss of employee morale, which can lower productivity. When employees consider whether their former co-worker has found a better position, they can easily lose focus and enthusiasm. If the former co-worker left the organization in unfavorable circumstances, there may be an even higher loss of morale among remaining team members.

A non-profit leadership team should convey these costs to donors and the board to justify a retention budget. Your organization won’t need to spend nearly as much on programs for your current employees, compared to the mountains of time, money, and productivity you risk losing during the hiring and training process.

Signs of Non-Profit Staff Burnout

For administrators and directors, the first — and most important — step in heading off employee turnover is simply making yourself aware of the damage and symptoms of burnout.

Unlike plain laziness, burnout is based in hard science. Many psychologists are lobbying the Diagnostic Statistical Manual (the APA’s collection of proven neuropsychological conditions) to include burnout as a diagnosable and treatable disorder, with its own set of symptoms and physiological effects.

Burnout was first officially described in the 1970s, and interestingly, the term itself arose from American psychologist Herbert Freudenberger’s observations of drug addicts. The blank expressions they exhibited as their flames consumed their cigarettes struck him as the perfect metaphor for an utterly diminished capacity.

Today, there are psychologists who earn their living specializing in the treatment of career burnout. After more than twenty years of research, burnout has been defined as “a prolonged response to chronic emotional and interpersonal stressors on the job, as defined by the three dimensions of exhaustion, cynicism, and inefficacy.”

Typical signs and symptoms of employee burnout include a sudden or increased:

  • Failure to take responsibility
  • Use or abuse of food, drugs, or alcohol
  • Irritability and lashing out
  • Absenteeism
  • Procrastination
  • Isolation

If you’ve see these signs in any of your staff during your meetings and events, it’s time to re-evaluate the pressures that may be smothering your employees. Ignoring the signs will damage not only the employees who are suffering, but your organization as a whole.

Former development director of GLAAD,  Dr. Julie Anderson recently wrote a post entitled, “My Heart Monitor and Staff Burnout.”  There, she describes how her “altruistic, impatient, driven and sometimes relentless” personality combined with her constant accessibility and the jobs’ demands caused uncontrollable heart palpitations.

After refusing to remain in the hospital or even rest at home, she ended up in a board meeting with electrodes emerging from her blouse. She is now a clinical psychologist in private practice in Los Angeles. Unfortunately, there’s still a high number of nonprofit directors and staff who can likely relate to her situation.

Non-Profits Must Build Power Teams

Non-profit administrators are constantly under pressure to keep “overhead” (which includes labor costs) low, in order to get the most funding to populations they serve. The emergence of sites like Charity Navigator and Charity Watch have seen donors investigate these “overhead ratios” more and more.

In an environment where people receive low monetary reward for their time and efforts, management teams must be diligent in ensuring that employees receive enough non-monetary reward for the work they do. This may come in the form of benefits, perks, and programs; but it may also come in the form of relieving staff from consistently long work hours, easing the workload of each individual, and being flexible in giving breaks to combat exhaustion.

Pushing staff to burnout will not maintain the organization’s stability, particularly in a high-employment economy where talented individuals can find a wealth of employers who will pay for their skills. Failing to make efforts to prevent burnout, and ignoring burnout when it does happen, will lead nonprofits to certain extinction.

Have you read?

Written By: Cory C. Grant, Shareholder & Founder of Grant, Hinkle & Jacobs.

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CEOWORLD magazine - Latest - CEO Agenda - Why Nonprofits Must Pay More Attention to Burnout
Cory C. Grant
Cory C. Grant is a Founder of Grant, Hinkle & Jacobs. For the past 20 years, Mr. Grant has developed his expertise in the design and implementation of advanced estate plans, wealth protection techniques, and business succession strategies for families and business owners. He has been an active member of the California State Bar since 1994.