N.Y. and D.C. Nonprofits Plan New Hiring and Raises, but Turnover Worries Some

This year promises steady increases in pay and hiring at nonprofits in the New York and Washington metropolitan areas, according to a pair of new surveys.

The uptick in raises and jobs signals a slowly recovering economy. Professionals for NonProfits, a recruiter, surveyed about 1,200 nonprofits in the two East Coast metropolitan areas.

Forty-nine percent of nonprofits in the New York area said they plan to increase the size of their staffs this year, and 44 percent of Washington-area groups said the same.

Nearly 40 percent of such groups in New York and 32 percent of those in Washington say they are likely to give employees raises of 3 percent or more.

The figures are an improvement over survey results last year, when 27 percent of organizations in both New York and Washington expected to give their workers more than cost-of-living increases in 2013.

Only 8 percent of New York employers and 12 percent of Washington groups foresee flat salaries for their staffs in 2014.

Last year, nearly half of the New York groups predicted that, as did 40 percent of the Washington organizations.

Leadership Changes

Despite the good news for workers, the studies revealed growing worries for employers about increased turnover, as opportunities to move to better-paying or more-satisfying jobs increase.

For example, 23 percent of organizations in the Washington area and 16 percent in metropolitan New York reported unusually high turnover, according to the studies.

Roughly one-third of all organizations in both metropolitan areas experienced changes in their leadership in 2013.

In both regions, recruiting and retaining workers was the staffing issue of second-greatest concern to organizations as they look ahead in this year. Improving employees’ performance ranked as the top concern.

The threat of losing good workers makes it vitally important that nonprofits give top priority to ensuring strong management, says Gayle Brandel, president of Professionals for NonProfits. Poor management drives the best employees away, she says.

“In the years to come, not only will nonprofits have to be competitive in terms of salary, but they will really have to run a good ship,” she says.

One of the most important ways to do that, says Ms. Brandel, is to adopt a smart succession plan well before it’s needed.

She says about 70 percent of her clients don’t have such plans in place, haven’t made decisions about whether to promote from within the nonprofit, or don’t know how to conduct a hiring search.

“If they don’t have a succession plan, then they have a problem,” she says. “When you step into a competitive marketplace, if you don’t have a plan it takes a long time” to find the right candidate.

Among the study’s other findings:

• Washington nonprofits said their main goal in 2014 was to increase their efficiency; New York groups cited plans to add skilled staff members in key areas. Last year, organizations in both regions cited plans to diversify their fundraising strategies and develop new revenue sources as the action they most urgently needed to take in 2013.
• Fifty-three percent of groups in Washington and 48 percent in New York said they developed new programs and services last year.
• Entry-level openings at nonprofits were increasingly filled last year by people in their 20s who had worked for businesses—the result, says Ms. Brandel, of growing interest among young people in finding meaningful work.

“Young people now are looking to the nonprofit sector as a way to add value to their lives,” she says.

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