2017 Nonprofit Employment Practices Survey

Interactive Data Portal

The Nonprofit Employment Practices Survey has been the leading source of data on nonprofit employment, talent and culture since 2007 and is trusted by human resources professionals and nonprofit leaders alike.

This Interactive Data Portal is intended to provide a snapshot of key findings on current employment practices and the economic implications of employment in the nonprofit sector in 2017.

Click “EXPLORE” or simply start scrolling to begin viewing 2017’s key takeaways.

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Nonprofit hiring remains healthy this year.

50% of nonprofits report they anticipate increasing staff size in 2017. This is the third straight year during which a majority of nonprofits reported plans to increase their staff size.

Nonprofits have been hiring more aggressively than for-profits and will continue to do so in 2017. However, the gap is narrowing.

The percentage of nonprofits that plan to hire shrunk 7 percentage points between 2016 and 2017. Meanwhile, the corporate hiring outlook is the best it has been in a decade and grew 4 percentage points between 2016 and 2017. This shift is due at least in part to the growth of social enterprise and purpose-driven business.

Yet nonprofits are not improving their talent and culture practices in order to keep up with the competition and advance their missions. For example, consider current practices related to recruitment strategy.

64% of nonprofits have no formal recruitment strategy. Without such a strategy, competing for top talent is more difficult today than ever.

Unfortunately, this trend is moving in the wrong direction.

Fewer nonprofits reported that they had a formal recruitment strategy in 2017 than in 2016 or 2015.

Most organizations (81%) also lack a formal retention strategy.

That’s equally problematic, because as corporate hiring continues to heat up and social enterprises and purpose-driven businesses continue to grow, mission-driven talent has more options than ever before. If nonprofit employers don’t put in a concerted effort to retain their top performers, those employees are likely to look elsewhere.

Many nonprofits fare only slightly better when it comes to strategies and programs for diversity, equity and inclusion (DEI).

Despite the fact that nonprofit leaders ranked diversity, equity and inclusion (DEI) as their top talent management priority in the beginning of 2017,* 52% of respondents to this survey reported they do not have a DEI strategy. Our country’s current political climate has made it more necessary than ever for employers to advance their DEI practices and take a firm stance on building inclusive work environments. Nonprofits must take the lead.

*Based on data from Nonprofit HR’s 2017 Nonprofit Talent Management Priorities Survey, January 2017

Without recruitment, retention, DEI and other talent and culture strategies in place, nonprofits continue to face familiar talent challenges.

Hiring qualified staff, maintaining salary budgets against market pressures and finding qualified staff all ranked in the top three greatest talent challenges for the last several years during which this survey was conducted.

So what can your organization do?

If you hope to continue to advance your nonprofit’s mission in the face of growing competition from the for-profit sector, changes in government support, shifts in funding and other challenges, it’s time to take action. Consider these steps.

Develop talent acquisition, retention and DEI strategies.
Align your talent strategies with your organization’s strategic plan.
Advocate for an increased investment in nonprofit talent.

If your nonprofit hopes to keep up with increasing competition for talent, you must make the appropriate financial resources available to support your people. Less than 1% of nonprofit funding has historically gone toward supporting nonprofit talent and only 0.03% ($450M) of the sector’s $1.5 trillion annual spending has been allocated to leadership development. Show your leadership, board and funders these data and discuss what you can do together to begin to drive change.

Understand where your organization stands on talent and culture in comparison to other nonprofits and choose 1-2 areas in which you can work to improve over the next year.

Read on for more data that can help.

Health was the sub-sector most likely to report the presence of a recruitment strategy in 2017, likely because many organizations in that sub-sector have high-volume staffing needs.

Do a large percentage of organizations in your sub-sector have a recruitment strategy in place? Talk to your peers to learn what’s working well for them before developing your strategy.

As in past years, direct services was the most challenged with retention of all functional areas.

Program management and fundraising came in second and third, respectively, as the hardest functional areas for organizations to retain in 2017.

Arts, Culture and Humanities organizations were most likely to have a DEI strategy or program in place in 2017, while education and research organizations were least likely.

DEI is an area no organization can afford to overlook in 2017. According to research from McKinsey, gender-diverse organizations are 15% more likely to outperform their peers than non-diverse organizations and ethnically-diverse organizations are 35% more likely to do the same.

When asked about their greatest diversity challenge, a majority of nonprofits chose balancing ethnic/cultural diversity.

Retaining younger staff (those under 30) fell close behind. What is your organization doing to address that challenge?

Of course, recruitment, retention and DEI strategies are not the only elements of a strong approach to talent and culture. Your organization should also consider current social sector benchmarks for things like onboarding, turnover, talent budgets, succession and more in order to find new areas in which you can improve. Let’s turn to onboarding.

In 2017, 63% of nonprofits reported they have a formal onboarding/orientation process and 31% reported they have an informal process. This is one area where the sector is quite strong, and it is important because onboarding sets the tone for an employee’s experience at your organization.

Fortunately, only 11% of organizations said they expected their turnover rate to increase in 2017.

However, a majority (59%) expected turnover rates to hold steady. Working to decrease turnover is an important goal for nonprofit human resources departments as well as any nonprofit leader who is concerned with long-term sustainability.

A plurality (18%) of organizations allocate 30-39% of their total operating budget to salaries.

Salary budgets are growing slowly, but many nonprofits still struggle to offer competitive compensation. When planning your salary budget, remember: people are not overhead.

Salaries are not the only piece of the talent and culture puzzle that should have their own formal budget.

Recruitment, retention, learning & development, diversity and other areas should all have defined budgets as well. However, 71% of nonprofits reported they have no formal recruitment budget.

Does your organization have an employment brand or employment branding process? A majority of nonprofits do not, despite the important role brand plays in attracting top talent.

Consider how you can leverage your social brand and mission to attract the people your organization needs to achieve its goals.

33% of nonprofits reported they use an Applicant Tracking System (ATS) or CRM in 2017.

An ATS or CRM can make talent acquisition far more efficient and improve the candidate experience. Can you make upgrading your organization’s technology a priority in the year ahead?

40% of nonprofits indicated they had a succession plan in place to replace senior leadership in 2017.

With baby boomers aging out of the workforce, succession planning is more critical than ever. Is your organization prepared for the future?

Survey Respondent Details

About the Nonprofit Employment Practices Survey

The 2017 Nonprofit Employment Practices Survey is intended to provide a snapshot of current employment practices and discuss the economic trends and implications of employment practices in the nonprofit sector. This report, which has been produced annually by Nonprofit HR since 2007, includes responses from 420 nonprofits in the U.S. and Canada that serve as a representative sample of the makeup of the sector. In this year’s survey, as in years past, researchers collected information on nonprofit staffing, recruitment, and retention practices. The survey included a mix of multiple choice, rating scale, and short-answer questions to gain context on the current practices of nonprofit organizations and the employment trends they see in the nonprofit sector. The 2017 Nonprofit Employment Practices Survey was produced with support from GuideStar and The Improve Group.

About Nonprofit HR

Nonprofit HR is the nation’s leading human resources firm that works exclusively with the nonprofit sector. Since 2000, the firm has provided human resources consulting, executive search and talent acquisition services for organizations supporting advocacy, health and human services, arts and culture, education, the environment, the faith community and more. Nonprofit HR has offices in Washington D.C. and Chicago.

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