How To Hold Onto Your High Performers
In her latest book, Donor-Centered Leadership, Penelope Burk reveals the results of five years of research which found that high staff turnover can be brought under control.
If you think that hiring and rehiring fundraising staff is draining more than your patience, you are right. Renowned author and researcher Penelope Burk has just published her latest book, Donor-Centered Leadership in which she reveals the startling cost of premature staff turnover.
It costs about 1.2 times the salary to replace a front-line development officer who stays only sixteen months in their first or second job—the average length of stay for young fundraisers today. But extending their tenure for an additional year saves money while ensuring that both employer and employee reap the return on their collective investment. As Burk points out:
“The not-for-profit’s time invested up front in training and mentoring now yields a more experienced staff member who, in year two, achieves results faster, solves problems more creatively (or avoids them altogether), and contributes as a fully functioning member of the team. The employee also benefits from living out a more satisfying career experience, rather than cycling through another apprenticeship period. And, when she does leave, she will be a much more valuable commodity to her next employer, while having the satisfaction of knowing she has served her current one well.”
Cost implications are much more serious the higher one goes up the seniority ladder. According to Burk, when a senior director of integrated marketing leaves, it can cost nine times their salary to replace them and bring their successor up to speed.
Though it is crippling, almost all of this eyebrow-raising expense shows nowhere on the balance sheet: time diverted from supervisors, managers and colleagues from their own work to rehiring, orienting, training and supervising translates into money not raised by several members of the team. Add to that the wind-down period for the departing fundraiser, combined with lower productivity by the new hire during their first year on the job, and it is easy to see why staff turnover is so expensive.
In major gifts fundraising, where success depends on building relationships with generous donors, there is an added challenge when high performing gifts officers leave. Thirteen percent of major donors say they delay making gifts, give less generously than planned or don’t give at all due to the frequent turnover of relationship officers.
Why Good Fundraisers Leave
According to Burk, fundraising is one of those rare professions today where supply and demand favors the worker. “There are simply too few trained, experienced development professionals for too many jobs”, she writes. Competition for fundraising talent is so intense that most mid-level and senior practitioners spend only three to six months in a new job before search firms and other nonprofits try to lure them away.
Not surprising, salary is the number one reason why fundraisers change jobs, but Burk insists that nonprofits that cannot offer competitive pay have other cards to play. “As long as they are not so far off the salary range that they eliminate themselves from competition, charities can compete on benefits—especially atypical ones that make balancing work and family responsibilities easier”, says Burk. Many enticing benefits like flex time, working from home, reimbursement of professional membership dues, or a company-issued cell phone cost little or nothing, yet they contribute substantially to fundraisers’ desire to stay loyal to their current employer, according to Burk’s research.
But more money and better work conditions are not the only reasons why fundraisers move from one job to the next. Career advancement is very high on their list. One in three fundraisers left their last job because they could see no opportunity to learn a new fundraising skill or take on a more senior position. At the same time, Burk’s research noted that top decision-makers’ number one complaint is that they themselves are overloaded. “If managers need to be relieved of some of their duties and non-management personnel are eager to assume more, this sounds like an opportunity just waiting to happen”, Burk concludes.
Improved Staff Retention Starts with Hiring Better
In Donor-Centered Leadership, Burk unfolds a compelling argument for not hiring in the usual way of advertising a position, but by taking advantage of decidedly superior strategies first. “Your best hire already works for you”, she insists, unfolding a logical, financially sound argument in favor of promoting internally. “Since too many excellent fundraisers are leaving because they don’t see how they can build their careers by staying, and since employers have already invested the time and cost up front in hiring, training and supervising them, then why not cash in on that investment by having a policy, not just a preference, for promoting from within?”
External hires are still necessary, however, when a development operation is expanding its staff complement. In those cases, selecting the best candidate is an art. In Donor-Centered Leadership, Burk devotes an entire chapter to interview and reference-checking questions that cause great candidates to shine while exposing chronic under-performers. She even gives practical advice on how to conduct the first part of a job interview in a way that gives employers insight into candidates’ ability to build relationships with donors:
If the interview panel is sitting down as the candidate enters, it feels more like an inquisition than an interview. Stand up and come out from behind the desk; shake hands; engage in small talk. “Small talk” is a misnomer; this critical banter sets the tone in any meeting or interview and communicates volumes to each person in the room. Small talk has big implications.
It All Comes Down to Leadership
How decisions are made at the top can make or break an entire fundraising operation. Donor-Centered Leadership exposes mistaken beliefs and out-of-date practices that make it harder for fundraisers to raise money and which cause one in three development professionals to leave their jobs. She warns CEOs and Boards that their insistence on unrestricted gifts and preference for short term and expensive approaches to raising money is driving donors away too.
Donor-Centered Leadership is available in the AFP Bookstore, here.
Penelope Burk’s company Cygnus Applied Research is known for their leading-edge research with donors and their evidence-based solutions for raising money in the twenty-first century. Penelope first came to the attention of senior fundraisers with her revolutionary, best-selling book, Donor-Centered Fundraising. Penelope has just released her third book, Donor-Centered Leadership, on how to build and sustain a high performance fundraising team.