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Nonprofits Continue to Hire More Aggressively Than For-Profits in 2017, but the Gap is Narrowing

Nonprofit HR has released the results of its 10th annual Nonprofit Employment Practices Survey, which indicate that while nonprofits have been hiring more aggressively than for-profits for the last several years and will continue to do so in 2017, the gap is now narrowing.

According to the survey, 50 percent of nonprofits plan to hire in 2017 (down seven percentage points from 2016), while the corporate hiring outlook is the best it has been in a decade, with 40 percent of for-profit companies planning to hire in 2017 (up four percentage points from 2016 according to the CareerBuilder's Annual Job Forecast). This narrowing gap is due at least in part to the growth of social enterprise and purpose-driven business.

However, most nonprofits are not improving their talent and culture practices in order to thrive in the face of this growing competition. 64 percent of nonprofits surveyed reported they do not have a formal recruitment strategy, 81 percent reported they do not have a formal retention strategy and 52 percent reported they do not have a formal diversity, equity and inclusion (DEI) strategy.

Key Findings from the 2017 survey include:

  • Nonprofit vs. For-Profit Projected Growth
  • Nonprofits have been hiring more aggressively than for-profits for the last several years, but the gap is now narrowing.
  • 50 percent of nonprofits plan to hire in 2017 (down seven percentage points from 2016).
  • In comparison, 40 percent of for-profit companies plan to hire in 2017 (up four percentage points from 2016).

Recruitment

  • 64 percent of nonprofits do not have a formal recruitment strategy.
  • 56 percent of nonprofits have no plans to change the way they source for talent in 2017.
  • 28 percent of nonprofits cite an inability to hire qualified staff within a limited budget as their top staffing challenge in 2017. This was the most commonly cited top challenge among nonprofits surveyed.

Retention

  • 81 percent of nonprofits do not have a formal retention strategy.
  • 27 percent of nonprofits have plans to develop a formal retention strategy in 2017.
  • 11 percent of nonprofits said they expected their total turnover rate to increase in 2017, while 59 percent said they expected it to stay the same.

Diversity, Equity and Inclusion

  • 52 percent of nonprofits do not have a diversity, equity and inclusion strategy or program in place.
  • 42 percent of nonprofits name balancing ethnic/cultural diversity as their greatest diversity challenge, while 35 percent list retaining staff under the age of 30.

"The results of this year's Nonprofit Employment Practices survey clearly illustrate the need for nonprofits to prioritize their people, and the talent and culture strategies that support them," said Lisa Brown Alexander, CEO of Nonprofit HR.

"With social enterprises and purpose-driven businesses experiencing tremendous growth, it is only going to get more difficult for nonprofits to attract and retain the top performers they need to advance their missions. The time for organizations to get serious about recruitment, retention, culture and human capital is now."

For more information and to view the survey infographic and interactive data portal, visit https://www.nonprofithr.com/2017-nonprofit-employment-practices/

About the Nonprofit Employment Practices Survey

The Nonprofit Employment Practices Survey has been conducted by Nonprofit HR on an annual basis since 2007. The 2017 report surveyed 420 nonprofits nationwide (a representative sample of the sector) in order to provide a snapshot of current employment practices, economic trends and their implications on the nonprofit sector. Research addresses nonprofit staffing, recruitment and retention practices, including information on projected growth, recruitment strategies, budgeting and staffing challenges.



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