A recent report has shown that the charity and not-for-profit sectors ranked third across more than a dozen industries in terms of employee retention rate.
The Employee Retention Report 2024, produced by the equity management company Vestd, revealed that employees in the charity and not-for-profit sectors have an average tenure rate of 4.3 years.
The report, based on LinkedIn data from the top 100 companies with 50 to 1000 employees and across 14 industries, stated that 70% of employees are more likely to stay with a company that offers well-structured benefits packages.
Companies need to offer reasons and incentives that align with employees’ needs and priorities, such as career development opportunities, competitive salaries and holiday allowance, in order to retain them, the report stated.
Even though the charity and not-for-profit sectors ranked third overall, almost three-quarters of 251 charity leaders said they were concerned about attracting and retaining talents, according to Charity Risk Barometer 2023.
‘Financial stability and well-being becoming a key priority’
Manufacturing, and property and construction industries had the longest average employee tenure of 5.3 years and 4.4 years respectively. The lowest rates, of 2.8 years, three years and 3.1 years respectively, were in marketing, hospitality and IT.
Ifty Nasir, CEO of Vestd, said: “Employee tenure is a key indicator of job satisfaction and company culture.
“Improvements to employee benefits, such as hybrid working and increased holiday allowances, have become a traditional way for companies to increase their employee retention.
“But with financial stability and well-being becoming a key priority for employees across all industries, offering robust packages that respond to these shifting needs has become a powerful incentive to not only retain current staff, but attract new talent.”
The Charity Risk Barometer 2023 found that 34% of charity leaders offered wellbeing policies, which was a decline from 52% in 2020.
Raghvir Dhaliwal, head of people, culture and inclusion at NCVO said: “It’s really important that charities feel confident they can recruit and retain the very best talent.
"Ensuring we have the right people in our organisations, with the right skills and experience is vital to achieving our missions, whatever they may be. Pay is of course an important part of attracting and retaining talent, but it’s important to think beyond that. Developing, or refreshing, a people strategy that covers reward, flexible working, benefits and the wider package is an important first step in ensuring your organisation is able to tackle the immediate and present needs.
"Having wellbeing policies and strategies in place, with clear communication on values and how their work supports delivering the charity’s vision and mission, will also ensure that your people can thrive and feel their best, helping foster belonging and improve retention.
"It’s also important that we look ahead to what is to come. At NCVO we are working to understand more about the workforce of the future, the skills that will be needed, and set out frameworks for today that will ensure the sector continues to be able to recruit the talent it needs in the years to come.”
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