News and analysis
March 04, 2015

Half of Nonprofits Plan to Add Jobs This Year, Study Finds

Employment growth is expected to remain strong at nonprofits, with 50 percent planning to add jobs this year, according to a survey released Wednesday. That figure tops recent estimates for job growth in the business world ­— and indicates that turnover will intensify at charities.

This year’s hiring plans would essentially mirror what happened last year, when 49 percent of nonprofits increased the size of their staffs, according to a survey of 362 nonprofits in the U.S. and Canada conducted by Nonprofit HR, a consulting firm in Washington. In 2009, in the depths of the recession, only 19 percent of those groups surveyed by the company reported that they were adding positions.

Of those surveyed in the current report, only 7 percent said they planned to downsize, and 7 percent planned hiring freezes.

Nonprofit expansion plans are more ambitious than the private sector’s, according to one survey. About 36 percent of companies plan to create new positions this year, according to a forecast by CareerBuilder, an online recruiting service.

The CareerBuilder forecast was the best outlook for companies since 2006, said Lisa Brown Morton, Nonprofit HR’s chief executive officer. The result, she predicted, is that nonprofits will find it harder to retain staff as lucrative jobs at for-profit companies open up.

According to the Nonprofit HR survey, nonprofits experienced 19 percent turnover in 2014. Voluntary turnover, an indication that employees are more confident about their prospects in the job market, increased to 14 percent, up four percentage points over the previous year.

"As the job market warms up, that means nonprofits face higher competition" for employees, she said. "Organizations that continue to pay below the market will find themselves lagging further and further behind."

Growth Areas

Social-benefit organizations were the most likely to increase their staffs, and faith-based nonprofits were the most likely to downsize, the survey found. Ms. Brown Morton said she wasn’t surprised that groups providing basic services, like food and housing assistance, plan to grow even as the economy becomes more stable.

"I don’t think the need for the support these organizations provide has gone away," she says. "These are long-term challenges."

The survey also found:

  • Insufficient pay was the biggest reason nonprofits said employees left, with 27 percent citing it as the biggest problem in retaining staff.
  • Employees that provide direct services are the hardest to retain, according to 38 percent of organizations surveyed.
  • Eighty-five percent of nonprofits don’t have a formal recruiting strategy.

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