Almost 80% of organisations in the charity and volunteer sector have reported a loss of paid staff in the past year, according to a report.
The research conducted by Ulster Bank and CO3 revealed that 77% of employees had left the third sector with most going to other sectors in the economy - 31% to the private sector and 44% to the public sector.
Nearly half of the respondents (48%) indicated improved terms and position elsewhere were behind the move. Insecurity over funding (30%) was also cited as a major contributing factor.
But the report said demand for the services provided for the voluntary and charitable sector was rising.
And with staff numbers going down, today's report warns of skills shortages with half of respondents reporting a deficit in key skills or roles.
Just under a third said their organisation is lacking expertise in marketing and communications, fundraising and operations.
The report found that 71% believed political stability will worsen over the next 12 months and 79% anticipate the local economy will worsen, with 40% suggesting a return to direct rule in the absence of a functioning Assembly.
Despite this 47% expect turnover to increase, up from 37% in the previous quarter, and 82% describe their cash flow as stable.
Nora Smith, chief executive of CO3, said: "It's positive to note greater cash flow stability and a more positive outlook for turnover over the coming year for an increasing number of third sector organisations, but skills shortages still exist across the board.
"A majority of our membership is in receipt of government funding, and the longer we continue without a functioning Executive the greater funding insecurity becomes. This is a major barrier when attracting new talent into the sector."