Suzanne Smith, MBA

 

If you want a heartwarming movie to watch this spring, I highly recommend “The 33,” which is a real-life account of a mining disaster in Chile in 2010. Stories above and below ground intertwine to make the movie compelling and relatable. Ultimately, all 33 miners were saved after 69 days underground in difficult conditions. They went down miners and came up brothers.

 

In our sector, the conditions are rarely that extreme, but they are often hard in ways that are easy to underestimate. The work is under-resourced, emotionally heavy and, at times, unpredictable. Secondary trauma is real. And yet, people continue to choose nonprofit work because they believe it matters. They come in hoping that, every once in a while, they will strike gold and make a real difference.

 

There is an old mining practice I come back to often. Miners carried canaries into the tunnels because the birds were more sensitive to toxic gases. If the canary got sick, it was time to get out. It was a simple, visible warning system that told you something was wrong before it became catastrophic. This practice gave rise to the saying “canary in the coal mine.”

 

We have our own version of that signal in the social sector: employee turnover.

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A Warning Sign We Can’t Ignore

Over the past decade, I have been tracking turnover closely, and it has gone from bad to worse. Roles are staying open longer. New hires are taking longer to gain traction. Leaders are spending more time filling gaps than moving strategy forward. What used to feel like occasional disruption is starting to feel like a steady operating condition.

 

The data reinforces what many leaders are already experiencing. Nonprofit turnover is now hovering around 20% to 22% annually, compared to roughly 12% to 13% across other sectors. That gap has held since the pandemic rather than correcting.

 

And the averages mask the pressure points. Smaller nonprofits with annual operating budgets under $2 million often exceed 25% turnover. In subsectors carrying higher emotional load, such as domestic violence, rates climb well above 30%. More than half of nonprofit CEOs now report turnover as a serious problem for their organization — and it continues to surface as a top concern at conferences across the country.

 

This Is More Than a Hiring Problem

Turnover at this level is not just about hiring. It raises a more fundamental question: can organizations function the way they were designed?

 

I have been tracking this with my friend and colleague John Troy at WorkTogether Talent Consulting, and what we are seeing goes beyond churn. Turnover is becoming a talent constraint that is limiting what organizations can realistically deliver. If we cannot attract or retain the talent needed to drive social change, the entire system begins to strain.

 

This deficit is particularly challenging for the social sector where the single biggest driver of success is talent. When that foundation weakens, everything else follows.

 

Two Forces Are Reshaping the Workforce

Two forces are driving this shift.

 

The first is the turnover itself. Unfortunately, what once felt like a temporary spike has settled into a pattern. Many organizations are now operating as if vacancies are simply part of the baseline.

 

The second is a broader shift in how people approach work. Tenure is shorter, and expectations have changed. According to the U.S. Department of Labor, the median tenure of baby boomers is 10 years, while it is only three years for millennials. Today, it is far more common to see transitions every three to four years in every age group. That does not mean people are less committed. It means they are making decisions differently.

 

A System Designed for a Different Era

The challenge is that most nonprofits have not adjusted their operating models to reflect this reality. The nonprofit sector was built around long-term loyalty, where long-term relationships and institutional knowledge compound over time. You can refill a role, but you cannot quickly rebuild trust or context. And treating those as interchangeable is where many organizations start to feel the strain.

 

This is why we have been advocating for both stronger succession planning and more intentional talent management strategies (which is the subject of our blog next week) at every level of the organization.

 

The Hidden Cost of Turnover

There is also a financial cost. Replacing an employee can cost 30% to 50% of their salary when you factor in recruiting, onboarding and lost productivity. For leadership roles, the cost is often higher.

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But the bigger cost shows up in execution, because projects slow down and decisions take longer. For many leaders, it means that they are a player and coach — being pulled back into the weeds.

 

Organizations start reacting instead of building.

 

Turnover is not just creating gaps — it is reshaping how the organization operates. And for many nonprofits, this puts them in a reactive role instead of a proactive, strategic role.

 

From Metric to Management Tool

Turnover is not just an HR metric. It is an organizational signal. To address this pressing issue, we recommend adding turnover rates to your strategic plan metrics and organizational dashboard so that you can analyze and correct issues. More importantly, we suggest digging deeper and examining what is driving these rates.

 

Not all turnover is the same. It is not always about how many, but sometimes about who leaves your organization. We separate these into two categories: desirable and undesirable turnover.

 

Desirable turnover is healthy. It is impossible to hire perfectly. You will occasionally make a bad hire, and it is important to take action when this happens. Not only does it free up a spot for a better performer, it can also help create a performance-oriented culture that is more supportive, challenging and engaging for the rest of the team.

 

Alternately, undesirable turnover is not as healthy. It happens when people you would have kept, if given the opportunity, leave the organization. It includes reasons that are avoidable (e.g., better pay, cultural fit, leadership issues) and unavoidable (e.g., retirement, moving).

 

You want to target, systematically avoid and mitigate these kinds of turnover by hiring right the first time and retaining star employees. We have put together a visual to help you calculate your annual turnover rates.​

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