Nonprofit Turnover Playbook: 3 Steps to Reducing Turnover and Engaging Your Team

Nonprofit employee turnover rates average between 19% and 27%, significantly higher than in other industries.¹ — CharityVillage, a nonprofit-sector news and jobs site

Turnover is among the most persistent and costly challenges facing nonprofit organizations today. Leaders within the nonprofit sector often find themselves caught in a cycle of hiring, training, and rehiring, diverting precious resources away from mission-critical work.

The causes of nonprofit turnover are complex but well-documented: ^{2, 3}

• Burnout due to high workloads
• Limited professional development opportunities
• Lower compensation than in the private sector
• Unclear career paths

Despite their complexity, these challenges can be addressed. Nonprofits that intentionally invest in leadership pipelines through structured succession planning often report reduced turnover and stronger organizational resilience.⁴

This blog article outlines three key components of a strong leadership pipeline. Download the full guide to receive succesion planning tools and templates designed to help organizations build a leadership pipeline that attracts and retains top talent, preventing costly turnover along the way.

Building a Leadership Pipeline: A Turnover Prevention Plan 

Structured leadership pipelines mitigate turnover by systematically identifying, developing, and retaining top talent. The result is a sustainable pool of internal talent and less overdependence on a few passionate but overworked employees.

Building a leadership pipeline involves establishing a succession planning process — not a simple list of successors, but an ongoing talent development process that prepares high-potential employees for specific critical roles in the organization. In this way, effective succession planning is the key to developing and maintaining strong leadership pipelines.

Effective succession planning is also an important driver of employee engagement and retention. When staff members see a clear pathway for career growth, they are more likely to stay engaged and committed to the organization. Additionally, succession planning enhances organizational stability, reduces disruptions during leadership transitions, and strengthens internal capacity by preparing future leaders in advance.

To learn more about succession planning, explore SIGMA’s 6-Step Succession Planning Process. This process forms the foundation for the elements of a strong leadership pipeline outlined below.

Three Components of a Strong Leadership Pipeline

1. Identifying high-potential employees and future leaders
2. Creating development plans for key roles
3. Establishing a mentoring and coaching culture

Identifying High-Potential Employees and Future Leaders

Identifying leadership potential involves more than looking at performance in a current role. While high performance is important, it doesn’t always indicate leadership readiness. Some employees excel at individual tasks without possessing the strategic thinking, interpersonal skills, or adaptability needed to lead others. That’s why succession planning requires organizations to look beyond current contributions and assess capacity for future growth.

Download the complete guide to receive a form-fillable Critical Role Identification Questionnaire.

Creating Development Plans for Key Roles

Once potential leaders have been identified, the next step is to create individual development plans (IDPs) aligned with the organization’s leadership needs. These plans should focus on building competencies essential for nonprofit leadership, such as financial stewardship, team motivation, advocacy, donor relations, and conflict resolution.

To create IDPs, begin by building success profiles for critical roles. Use a competency framework and select which skills and abilities are necessary for leaders in the organization and within each critical role. For a quick start, use SIGMA’s Leadership Competency Framework, which includes 50 key competencies proven to impact leadership performance. Once success profiles have been created, IDPs can be built to address skill gaps and prepare high potentials for specific roles.

Download the complete guide for access to a form-fillable success profile template.

Professional development doesn’t have to be expensive. Training workshops, cross-functional projects, conference participation, and online courses can all be valuable. What matters most is ensuring that development efforts are consistent, strategic, and aligned with clear growth goals. For practical and effective competency-based development sessions, explore SIGMA’s Leadership Development Workshops. To equip managers with the skills to coach direct reports, see SIGMA’s Coaching Training programs.

Establishing a Mentorship and Coaching Culture

Supporting high-potential employees in their development efforts is critical for ensuring long-lasting change. Coaching and mentoring are among the most effective methods. Employees who receive guidance from experienced colleagues are more likely to feel supported, motivated, and loyal to the organization.⁵ Mentorship also facilitates the transfer of institutional knowledge, fosters learning, and promotes a culture of growth.

Download the complete guide for tips and tricks on how to facilitate one-on-one, group-, and reverse-mentoring.

Download the Nonprofit Turnover Playbook

Access tools and templates to identify high potentials, build development plans, and establish mentoring and coaching programs in SIGMA’s Nonprofit Turnover Playbook. Contents include:

• The four key drivers of turnover
• Self-Assessment: Is Your Nonprofit at Risk for High Turnover?
• The 6-Step Succession Planning Process
• Common Characteristics of High-Potential Talent
• Proven Strategies for Retaining Top Talent
• The Critical Role Identification Questionnaire
• SIGMA Success Profile™ template
• The Succession Nomination Survey

Download Nonprofit Turnover Playbook