Accepting the torch; things to think about for improving retention

I would like to start out by saying thank-you to Jerry Archibald who has been writing this column for more than a decade. Like many of you, I have truly enjoyed reading his insightful, astute and perceptive articles. His articles have been used by countless tax-exempt organizations in our community to enhance their knowledge of how legislation, accounting standards and a multitude of other hot topics may impact their organization, the services they provide and the people they serve. Also, I want to thank the Rochester Business Journal for providing me with this opportunity. I am excited to continue what Jerry has started. Although I know I won’t be able to fill his shoes, I am looking forward to the challenge.  

We have spent the better part of the last year and a half responding to the pandemic and complying with governmental mandates. The pandemic has taken a tremendous toll on our employees. We went from furloughs and layoffs in March 2020, to frantically trying to hire within three months. People are tired, burned out and don’t feel as connected as they once were, all of which has resulted in turnover rates skyrocketing. Every day we are bombarded with news reports about the Global shortage of workers, help wanted signs and online ads for companies looking for new employees. Companies are forced to pay enhanced wages to fill vacant positions. Add in the loss of population in New York, especially upstate, the result is competition for employees never being fiercer.  

We have all heard the saying that it costs three times as much to hire a new employee than to retain those that we have. That cost has increased with the pandemic. That is why it is imperative to retain the employees that we have. This is a significant challenge for tax-exempts with limited resources. Five areas that we can focus on are: 

1. Culture: An organization’s culture sets the beliefs and behaviors that influence how employees and management interact and determines how business transactions occur. Every organization’s culture has been negatively impacted by the pandemic as culture is strongly impacted by employee relationships and connections. Things that an organization can do to improve culture are: 

• Encourage strong coworker relationships: Face-to-face interactions are by far the most important activity that occurs at work. Face-to-face has been limited throughout the pandemic and still continues. We have tried to offset this impact by having virtual interactions, however, we have come to realize that virtual interactions are not as impactful as face-to-face. Encouraging employees to come back together is imperative to restoring culture.  
• Be transparent and open with your employees: Share the challenges and successes of the organization. Tax-exempts should consider regularly communicating with employees throughout the year whether it be via formal in person or virtual meetings, newsletters or emails. The key is to have the communication not the form of it.  
• Promote a team atmosphere: Bring teams together for a happy hour, lunch or a team event. Consider friendly team competitions. 
• Constantly communicate your mission and vision statements: People want to know that their work is meaningful, that what they do has purpose and that they are part of something. This is a significant advantage that tax-exempt organizations have that is easy to capitalize on. Your mission and vision statements establish the long-term direction and goals that guide your daily operations. Make sure that all of your employees are aware of your mission and vision by continually exemplifying it. 
• Inspire employee autonomy: No one likes to be micromanaged. Trust your employees to do the work that they were hired to do. 

2. Mentoring: Millennials are expected to make up 75% of the workforce by 2025, effectively replacing Baby Boomers and reducing the representation of Gen Xers. The fact is that Millennials want different things than the Baby Boomers and Gen Xers. One thing that Millennials want is mentoring. Tax-exempt organizations should consider implementing a formal mentoring program.  

Formal mentoring programs strengthen employee/leadership relationships, enhance employee development and succession planning. Mentoring provides a sense of accomplishment for both mentor and mentee. Mentoring provides a stronger sense of loyalty to the organization. Additional benefits are growth, consumer satisfaction, employee engagement, increased job satisfaction, improved morale and pride. The time spent in mentoring will be more than worth it in the long-term as an investment in the future. 

3. Recognition: Recognition shows your employees how their contributions lead to the success of the organization and that they are valued. Recognition is a powerful motivator and leads to improved performance. Tax-exempt organizations have the unique opportunity to show their employees how they are changing the lives of those that they serve. Celebrate the accomplishments of your employees and broadcast them for all to see. Tax-exempt organizations need to create an appreciation program that recognizes their employees and highlights the social impact of their work. 

4. Work-life balance: Noel Gallagher said “I don’t live to work; I work to live.” That has never been more true as people reevaluate their priorities as a result of the pandemic. Employees are placing more and more emphasis on work-life balance. Providing that work-life balance for your employees is imperative. We have clients that have employees working 70 plus hours a week. That is not sustainable and leads to service quality issues. I know it is difficult to manage work-life balance in our current environment but if we don’t, it is only going to get worse.  

Tax-exempts can do a few things to improve their employees’ work-life balance including regularly reviewing workloads, requiring employees to take breaks, focusing on productivity, leading by example and reviewing perks that are offered. Managers need to regularly review workloads for all employees and balance them as best as possible. When you are scheduling shifts, ensure you are giving employees the opportunity to volunteer for additional shifts and require that employees take breaks. One employee working all of the additional shifts does not provide them with time for a life outside of work. Focus on productivity rather than the number of hours worked. Encourage and provide training on how to improve efficiency. The one area that management can be most impactful is to lead by example. Show your employees that you can have work-life balance. It is discouraging for employees to see their bosses not having work-life balance and may make them not want to continue with your organization. Lastly, consider the perks that your organization offers. Consider subsidizing fitness center membership, providing laundry services at the office or massages in the office.  

5. Flexibility: Now more than ever, tax-exempts need to be flexible. Employees need to have the flexibility to attend to personal matters as they arise. For that to occur, the organization needs to quickly adapt to new circumstances as they arise. In order to become more flexible, an organization must keep an open-mind and be able to respond appropriately to ever changing circumstances. Keep your core values in mind when determining the extent of flexibility. As always, planning will help when unexpected situations arise.  

Whether it be with flexible work hours or flexible work arrangements, being flexible increases retention, employee loyalty and engagement. It helps organizations through the tough times we are currently in.  

Tax-exempt organizations are facing several challenges and retention ranks at the top of the list. Retaining employees is imperative to your success and keeping the items above front and center will help with that goal in mind. Working on our culture, mentoring and recognizing our employees, providing work-life balance and flexibility will help our organizations standout as an employer of choice. 

Jeff Paille is a CPA and Partner at the Bonadio Group and has consulted with tax-exempt organizations for almost 30 years.