How Economic Pressures Are Reshaping Not-for-Profit Recruitment in 2026

The not-for-profit sector is navigating one of its most challenging recruitment landscapes in years. A survey by the Charities Aid Foundation, based on feedback from almost 550 charities, showed 66% of leaders believe the sector is unhealthy, with many pointing to financial strains and cuts in funding.

As cost-of-living pressures impact increasing numbers of workers, those with a preference to work within the charity sector are facing a difficult choice – to move to the private sector out of necessity to increase their earnings. Charities and not-for-profits are struggling to attract and retain talent, especially in specialist roles like finance as well as digital and fundraising roles. With limited budgets, competing with private sector salaries remains tough, but with a push on private businesses asking employees to be in offices for a great proportion of their working week, charities are able to leverage a more pragmatic and flexible approach to hybrid working to attract talent who value flexibility. The average pay award in the not-for-profit sector for the year ending November 2025 was just 3%, while RPI inflation was 4.5%.

The numbers tell a stark story. A third of charities reported making staff redundancies over the previous year, and a similar proportion had cancelled plans for new hires. Half had not filled open positions and one in five had either frozen or reduced salaries.

What I’m seeing across Yorkshire is a fundamental shift in priorities. Boards are scrutinising every hire more carefully, looking for candidates who can deliver transformation and demonstrate tangible impact. Technical competence alone isn’t enough and my role as a recruiter requires me to dig into the details of what people’s experience and expectations are on both sides of the interview desk to ensure hires are successfully beyond the probation period. Ultimately the three levers that can be used to make a role easier or harder to fill are:

• Pay – in most circumstances, but not all, increasing a salary, even by a small amount can improve your chances in hiring and represents a good return on investment if you retain someone for longer as the cost and time of hiring, covering gaps and training is often more than a marginal salary increase.
• Flexibility – now that we are 6 years post lockdown, there is increasing pressure for staff to be physically onsite for a great % of their working week, to broaden your candidate pool a more remote role or more flexible office presence or contracted working hours means you can hugely widen your potential candidate pool in terms of geography, but also from an inclusion perspective as some carers, parents, or people with disabilities are more motivated by the ability to fit work into their life than purely by salary.
• Expectations of experience – the final lever that can be used is to consider candidates who are potentially not the “finished article” and either don’t have previous sector experience, are looking for a step up in terms of responsibility or may not have completed qualifications. By investing in talent that will need development, employers can potentially reduce the salary costs, but increase retention as there is often great loyalty from candidates who feel supported and developed in their skills and career.

In summary, many candidates still value impact over income. Organisations that emphasise purpose, offer flexible working arrangements, good holiday allowance, generous pensions and invest in personal development opportunities can still attract exceptional talent. Anecdotally, I continue to place incredibly talented people into roles where I know (and they know!) they *could* earn significantly more in the private sector, but choose a life which values purpose and flexibility beyond salary.

For hiring managers, the message is clear: be decisive, articulate your mission compellingly, and move quickly. The best candidates have many options.

If you’d like to discuss how we can support any hiring needs within your team or market insights, please get in touch

Lucy Rider
Senior Director

T: 07983 549758
E:lucyrider@brosterbuchanan.com

With more than 23 years of experience in recruitment – including 22 years dedicated to accounting and finance roles across Yorkshire – Lucy is one of the region’s most respected and trusted senior recruitment leaders.