Staff retention has two meanings:
- Your charity’s ability to keep members of staff and reduce staff turnover.
- The strategies you can use to minimise staff turnover and the number of people leaving their employment with your charity.
Your retention rate is the change in the number of members of staff over a fixed period. Here are two examples of how to calculate it:
Charity A
- 1 April 2022 – you had 15 members of staff
- Over the year, three people leave and one person joins
- 31 March 2023 – you had 13 members of staff
- (13/15) x 100 = 86.7%
Charity B
- 1 April 2022 – you had 27 members of staff
- Over the year, two people leave and one person joins
- 31 March 2023 – you had 26 members of staff
- (26/27) x 100 = 96.2%
The higher the score, the more stable your staff retention. Charity B has a higher retention rate than Charity A. You might choose to use the time period of one year for your calculation but do this on a quarterly basis, to help you track any trends.
Why retention matters
Understanding the reasons behind your staff turnover can help you identify ways to increase staff retention.
Higher levels of retention – the effect of reducing staff turnover – contribute to your culture, general morale among staff, and maintaining or increasing operational efficiency. This in turn should have a positive impact on your charity’s success. Increasing staff retention is one way to reduce time and costs spent on recruitment and training, as well as preserving organisational knowledge.
Your approach to staff retention should consider the following:
- What is your current retention rate? How does this compare to your past experience, and to what’s going on in similar charities? Do you need to look at increasing retention?
- What skills do the current members of staff have, that are essential to managing and running your charity? How straightforward would it be to find new people with those skills? Would training more people in these skills increase their engagement and likelihood of staying with you?
- What skills does your charity currently lack? Can you train current members of staff and acquire these skills? What is the likely return on your investment in that training?
- What staff turnover can you predict? If you know that people are planning to leave, due to retirement or for career progression, what plans can you make to minimize the impact of them leaving on your operations?
- When people leave, do you capture their reasons for leaving through exit interviews? Are they ‘regretted’ leavers – what would you have done to encourage them to stay, if you were not aware of their plans to leave?
Remember that some staff turnover is a good thing – it gives you the chance to review roles and adapt them to meet the evolving needs of your organisation. It also has the potential to bring in new ideas and ways of thinking, and to increase the diversity of your workforce.
Who needs to know
Anyone in your organisation who is involved in staff recruitment will also have an interest in staff retention. After all, recruitment takes time and resources away from the day to day operation of your charity. A gap between someone leaving and a new member of staff starting work – and the time taken for their induction and to ‘get up to speed’ – can last for several months, and during that time others are potentially taking on more work with the associated risks of stress and burnout. You may also find these gaps – or even a simple handover with a change of people – delays projects and reduces your charity’s ability to support its beneficiaries.
You will probably want to share your thinking on retention and succession planning with your trustees. High levels of staff turnover can be indicative of poor management of workload and resources, a lack of people management skills among line managers, members of staff feeling unrecognized and unsupported in their work, poor organisational culture. You may wish to seek input from your trustees to address culture issues, increase staff benefits and rewards, introduce more flexibility for your members of staff, and invest in training and development.
Where next?
Small charities and recruitment
Attracting and retaining staff during a recession
How to create an age-diverse workforce in the third sector
Supporting employees during the cost of living crisis
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