Nonprofits are letting fewer people go and plan to create more positions in the coming year, but they continue to struggle to adopt new and innovative human resources practices, according to the 2014 Nonprofit Employment Practices Survey, conducted by consulting firm Nonprofit HR.

Of the more than 400 groups surveyed, 46 percent reported increased hiring in 2013, the highest total in the last five years. Only 17 percent said they decreased hiring, the third consecutive year that that number has dropped. And, for the first time since the end of the Great Recession, more groups said they plan to hire new staff to support new projects (45 percent) than use current staff (43 percent).

“The biggest outcome of this survey is the fact that the sector is really rebounding from a hiring perspective,” said Nonprofit HR President and CEO Lisa Brown Morton. “We’re seeing far fewer organizations looking at terminating people, and most of the subsectors are looking at hiring. One of the other things that is important is that almost every area of the sector, in terms of job category, is anticipating growth in 2014.”

Despite the positive hiring data, Morton said findings from the recruitment and retention portion of the survey provide cause for concern. The sector still lags behind the for-profit world in recruiting talent through social networking and hasn’t committed to implementing formal recruitment and retention strategies, she said. Only 15 percent said they have a formal recruitment strategy, and only 17 percent said they have a formal strategy for retention.

“You have to keep in mind that the majority of nonprofits do not have dedicated HR talent or systems,” she said. “The broader theme here is that the sector doesn’t generally invest too deeply in human resources infrastructure or resources. Some of that is driven by the funder community and foundations and their lack of willingness to invest in infrastructure and capacity building. The other part of it is just that human resources is still an emerging function in the sector—it’s not fully matured.”

To fix that, Morton said, the sector needs to raise awareness in the funding community that investing in talent management is just as essential to mission accomplishment as directly funding a specific program.

“There is a general sentiment in the sector that we can get away with giving HR to anybody who’s willing to do it, as opposed to thinking thoughtfully and strategically and intentionally around hiring people who are qualified and experienced and who can help drive a mission forward,” she said.

Editor’s Note: This story has been updated to correct the name of Nonprofit HR.

(iStock/Thinkstock)