Nonprofits are expected to continue increasing staff for the second year in a row in 2013, but they are lacking innovation in the human resources department and are not well prepared for leadership succession, according to the 2013 Nonprofit Employment Trends Survey [PDF] conducted by the consulting firm Nonprofit HR Solutions.

Of the more than 550 nonprofits surveyed, 44 percent said they plan to create staff positions this year. That’s almost identical to last year’s numbers, but up 10 percent from 2011.

“Turnover is remaining steady as well, which is a good sign,” said Lisa Brown Morton, president and CEO of Nonprofit HR Solutions. “We’re not seeing an increase in turnover, although there is an expectation that retirement and voluntary resignations will increase in 2013.”

While overall statistics show a strong nonprofit sector, the lack of innovation in HR practices is a concern, said Morton.

“The approach to being innovative really comes from having the opportunity to be intentional around doing new things. We need to look outside of our circle as nonprofits for creative ways to attract, retain, and develop talent,” she said.

According to the survey, nine out of 10 nonprofits lack a formal employee-retention strategy. And many appear to be unprepared for leadership succession. Nearly 70 percent of the groups surveyed do not have a succession plan in place for senior leadership.

“It really starts at the board level,” said Morton. “The board has to deem it a priority, and then it becomes a priority for the CEO and subsequently the HR leader. Then there has to be someone to execute on that succession plan, someone to put it together and hold folks accountable.”

For smaller organizations, that job tends to fall to the executive director or CEO, who is generally weighed down by other tasks, she said. “It becomes something that we know we should do, but we never get around to. That is a constant theme and has been for some time.”

To address it, Morton said, a top executive must make the board recognize the business impact of failing to plan for the future.

“What if it took six months or a year—which is not out of the realm of possibility—for a group to find the right leader?” she said. “Show your volunteer leaders the business, financial, and programmatic implications for you organization if you didn’t have someone qualified at the helm for an extended period of time.”

How has your organization worked to address recruitment, retention, and succession issues? Share your story in the comments.

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