Nearly Half of All Nonprofits Plan to Add Jobs; Few Predict Layoffs

Forty-five percent of nonprofits plan to add jobs this year, about the same share that created new positions in 2013, finds a survey released today.

As the economy continues to improve, nonprofits are not only adding jobs but are increasingly avoiding layoffs: Only 7 percent intend to eliminate positions this year.

Public-policy groups, followed by health, social-services, and community-development organizations and arts and cultural groups, were most likely to report plans to hire.

The study of 413 organizations was conducted by Nonprofit HR, a human-resources consulting firm, and the Improve Group, a consultancy whose clients include charities.

Room to Grow

Employers that said they will add jobs were most likely to hire staff members to provide direct services (42 percent) and program management (40 percent), followed by fundraising (36 percent).

“Nonprofits are hiring because there is a significant demand for their services, and they recognize that they must grow and develop their staff in order to meet these demands,” wrote Lisa Morton Brown, executive director of Nonprofit HR, in an e-mail to The Chronicle.

Ms. Morton Brown was encouraged to see that 21 percent of groups planned to hire more staff members in their finance and operations divisions, an increase of 4 percent from 2012.

The uptick indicates that nonprofit groups are on a solid footing to make the personnel investments they need to be effective in delivering services, she says.

“In the past, we’ve seen organizations underinvest in operational staff in an effort to keep non-programmatic salaries at a minimum, but this often hurts organizations rather than helping them,” she wrote in her e-mail to The Chronicle.

Turnover Prospects

The survey also shows that the brightening economy is allowing groups to take steps to avoid overburdening existing staff members, according to the survey’s authors.

Forty-five percent of organizations plan to hire staff members to support new programs, instead of using current staff members to do the extra work. This finding is an 8-percent jump from 2012 and a 16-percent stretch from 2010.

Employers reported a 16-percent turnover rate last year, down just one percentage point compared with 2012, a sign that the improving economy is not yet driving more people to leave their jobs.

The majority of organizations surveyed expected a similar rate in 2014, while nearly one-quarter of nonprofits expected the turnover rate to decline even further.

Still, one-fifth of the groups reported turnover as a major employment challenge, citing the cost of hiring and training new employees.

But some organizations in the survey reported an upside to employee turnover. “The changes in personnel were in line with how the organization is changing,” wrote an official at a small community-development group. “The new personnel were better fits.”

Steady Challenges

Other findings signal obstacles nonprofits face in keeping staff members and adding new ones:

• An inability to offer competitive pay topped the list of challenges groups faced in keeping employees, followed by lack of ways to promote staff members and heavy workloads.
• Retaining midlevel staff members proved the most difficult issue for 40 percent of employers, while 39 percent of groups struggled to keep entry-level workers. Only 4 percent reported trouble keeping chief executives and others at the top of the organization.
• Seventeen percent of nonprofits had a formal strategy in place to retain employees, though that represented an increase from 10 percent in the previous year’s survey. Among the most popular perks used to keep workers were generous vacation time, a retirement or pension-plan match, and flexible work schedules.
• While many groups reported that they would like to fill new positions with staff members who reflect the ethnic and racial diversity of the communities they serve, less than half the groups had a formal diversity strategy.
• More than two-thirds of groups do not have a formal succession plan for senior leadership and only 14 percent of groups reported a goal to form one. Organizations often voice desires for such a plan, but are remiss in taking the time to formulate one, said the survey’s authors.

“Succession planning sends a strong message to staff about opportunities that may exist for them to grow and develop professionally,” wrote Ms. Brown Morton in her e-mail to The Chronicle.

Download a free copy of the “2014 Nonprofit Employment Practices Survey.”

Where Nonprofits Are Adding Jobs