Hiring and Pay Are Expected to Remain Flat in East Coast Cities Through 2013

The sluggish economic recovery continues to keep most nonprofits from giving employees raises or hiring new staff members, according to a study of 6,500 nonprofits in five East Coast metropolitan areas.

Two-thirds of the groups said they planned to maintain current programs without adding staff members or providing pay increases, while one-third said they were conducting restructuring and strategic planning with hopes that they could add programs and jobs in the year ahead.

Gayle Brandel, chief executive of Professionals for Nonprofits, said much of the staff expansion would come from midsize charities that are seeking to improve their fundraising and marketing and expand their programs.

Smaller nonprofits can’t afford to expand, she said, while large charities, those with budgets of $20-million or more, often have entrenched bureaucracies that make them slow to change.

“It’s that group in the middle that’s leading the changes in the sector,” she said. “They can take more risks and they’re flexible enough to make changes easily.”

The recruitment firm gathered data from charities in Baltimore; Newark, N.J.; New York; Philadelphia; and Washington.

Rewarding Performance

While few nonprofits are increasing worker pay, the survey found changing attitudes among managers about how to decide who gets raises. More increases will be based on performance standards rather than what has long been done: basing pay on the tenure of staff members or rewarding everyone equally, Ms. Brandel said.

She said that in past surveys, very few nonprofits said they were changing their salary policies to emphasize performance, but now enough groups say they are examining such revisions that she expects a significant shift in the coming year.

Behind the changed attitude, she said: pressure from donors to run programs that show results and limited resources that intensify managers’ focus on making sure every employee is doing a great job.

Among the studies’ other findings:

• In New York, 59 percent of nonprofits said they would focus on rewarding staff performance in 2013; 61 percent of Washington groups said the same.
• In Washington, 40 percent of groups surveyed said they plan to keep staff salaries flat this year; in New York, 47 percent of groups predicted the same.
• Forty-one percent of groups surveyed in Washington and 42 percent in New York plan to increase their fundraising staffs.

Free copies of the survey results are available at nonprofitstaffing.com.