The Importance of Employee Satisfaction for Nonprofits

Written by Datis Admin

July 17, 2018

The Importance of Employee Satisfaction for Nonprofits

To put it simply, employee satisfaction is measure of how content, or satisfied, an employee is within their role and organization. Employee satisfaction is crucial for organizational success in all industries, and numerous studies have found positive correlations between high rates of employee satisfaction and organizational success. For this reason, executives in the nonprofit sector are looking for cost-effective ways grow and improve their workforces. One simple way to do this is to implement tactics to improve employee satisfaction within their organization.

Continue reading to discover the importance of employee satisfaction for nonprofit organizations.

Reducing Turnover
Employee turnover is expensive, especially for nonprofit organizations that are often forced to operate on strict budgets. To nonprofit executives, every dollar counts, and they are well aware of the importance of keeping employee turnover low and retention rates high. Unfortunately, the DATIS 2018 State of Workforce Management survey report found that almost half of nonprofit organizations are experiencing a turnover rate of 20% or higher.

Fortunately, nonprofit executives can reduce employee turnover by implementing strategies that focus on improving employee satisfaction throughout their workforce. When employees are satisfied at work, they are less likely to look elsewhere for employment opportunities and more likely to continue supporting organizational objectives. By reducing turnover, nonprofits will have more money to allocate towards achieving their organization’s primary mission and serving their communities.

Overcoming the Wage Gap
It’s well documented that nonprofit organizations often struggle to provide their employees with competitive salaries. In fact, 53% of nonprofit executives identified their organization’s inability to offer competitive salaries as their biggest recruiting obstacle. Nonprofit employees are passionate, and often place meaning over money when it comes to their careers.

However, the wage gap could become more of an issue employees in the nonprofit sector if their employer is not making an effort to keep them satisfied and happy while at work. Most employees would find it hard to tolerate and justify being unhappy at a job that pays relatively low wages in comparison to for-profit companies. This emphasizes the impact of employee satisfaction for nonprofits, and the need to implement strategies to keep workers happy while on the job.

Improving Organizational Culture
According to Brian Chesky, CEO of AirBnb, “Culture is simply a shared way of doing something with passion. With that said, the importance of culture is not lost on nonprofit organizations. Culture is defined by how employees come together to tackle problems, raise one another’s performance, and work as one to accomplish common goals. Nonprofits with a positive culture that embraces collaboration have a better chance of overcoming obstacles to meet their mission.

Employee satisfaction plays a large role in organizational culture. When employees are dissatisfied and unhappy in their organization, the culture is negatively impacted. An article by Harvard Business Review states that, “the effect of one negative employee is four to seven times greater than the effect of a positive employee.” Meaning, a dissatisfied, unhappy employee can impact organizational culture more than a satisfied, happy employee. To build a strong culture that is aligned with the organization’s vision and values, executives need to foster employee satisfaction strategies that reduce the number of toxic employees.

Employee satisfaction is crucial for nonprofit organizations in a variety of different ways. As executives attempt to continue their organizational growth and retain their top employees, they should begin strategizing ways to keep their employees happy. If done correctly, these efforts will result in an increase in employee retention, a reduced impact of the nonprofit wage gap, and an improved organizational culture that empowers nonprofits to better serve those in need.

Looking for more tips on how to improve your nonprofit work environment? Check out at our recent blog, “3 Ways to Increase Employee Engagement.”

This DATIS Blog was written by James Clark, DATIS, on April 26nd, 2018 and may not be re-posted without permission.