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What is the true cost of turnover to your organisation?

Specialist Member Michelle Varcoe examines the wider implications of employee turnover and points to some positive ways to keep good people by your side.

Building relationships, trust and goodwill in any business revolves around the human factor. So, when valued employees move on, the cost to your organisation can soar way beyond the bottom line.

According to the latest Australian Human Resources Institute (AHRI) survey, the average yearly employee turnover in Australia is around 18 per cent. While many businesses might count the cost in terms of dollars spent on such things as induction, training and professional development, there is another significant risk area that particularly impacts the not-for-profit sector – maintaining long-term partnerships and stakeholder engagement.

As Fundraising Institute Australia chair James Garland told me recently, the financial impact can reach “untold heights”, because good fundraisers build strong relationships with donors, and they build trust and transparency through good practice. When you turn over your fundraisers, he added, it’s not just the staff member that goes, it’s the value of the relationships they have built that leave as well. 

This point is underscored by Carl Young, philanthropy and fundraising director at Melbourne’s Peter MacCallum Cancer Centre. He said perpetual staff movement can mean detailed donor knowledge is lost, relationships cease, rapport falters and the chances of successful gift solicitations diminish. And he poses this conundrum: how can organisations expect donors to see them as their charity of choice if the message from departing employees is that they don’t view the organisation as their charity of choice?

So, how can fundraising organisations and other NFPs retain good people? And if they do lose key employees, how can they mitigate the fallout?


Recruit, retain, train and empower great people. First, make sure your organisation has the right people in place. If key roles are vacant, that can mean opportunities missed. If you have a competent fundraising team, your organisation will retain donors, build and retain relationships, sustain a healthy pipeline and secure gifts.


Salaries are the obvious starting point here. Are you paying above or below the average in similar organisations? Salary is not the only motivator to attract and retain people, but if you are below the average, an adjustment may help. 

Providing career and professional development opportunities is another key area. Apart from the annual formal performance review, regular feedback and discussions about employees’ goals or concerns will help them feel valued and will retain their enthusiasm. Ask open questions: Do you need extra support? How can I help you achieve your goals? In the process, you may discover an issue or underlying problem you can address. 


If you do lose key people, you don’t want knowledge and relationships to walk out the door with them, so ensure history and information is captured accurately. Strategically plan how best to manage and transition relationships within your organisation, so they continue seamlessly. Ensure there are strong connections and various touchpoints – not just one sole account manager – to avoid pushing the restart button on relationships every time a new person joins the team.

At the end of the day, people will come and go – in today’s competitive environment, staff turnover is inevitable. Consider turnover costs in your annual budget to recruit, train, retain and replace people for your organisation to survive, thrive and deliver impact.  

On a positive note, turnover is not 100 per cent doom and gloom. People leaving an organisation can clear the way for fresh ideas and helps avoid stagnancy. New people can lift morale, re-energise the team and add new skills and strategic thinking.

  1. Value and motivate your team.
  2. Benchmark salaries and pay within current market range.
  3. Foster strong relationships and open communication.


Michelle Varcoe is an experienced recruitment consultant and Specialist Member of The Xfactor Collective social impact community.

Need help in your organisation? We run the sector’s first specialist triage support service (our CONCIERGE) where we can help you find support from a range of services and solutions.


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