So I've been Dming for a little over two years now and after some serious burnout from it all I'm trying to get back into it. The issue is I hate how I used to do things. When I started 5e I had three resource books, a lot of ideas and literally three days to create a campaign which worked out really well I managed to put together something I was and still am proud of. However I did things in a way that I am now pretty unsatisfied with. Mostly in the creating NPCs department. For non combative NPCs I'm still fine I have no issue pulling names out of my ass and I have a list of all my existing NPC and relevant information in case they ever show up again, but all NPCs that were designed either as helpful adventuring NPCs or as enemies were made as PCs which I now hate for a ton of reasons mostly being that I find they DO NOT work as I intended them too.

The issue is that the ball has really been dropped on actually outlining how you are suppose to make NPCs from scratch. Which in my mind is a huge oversight considering how massively important good NPCs are for player engagement in 5e. but at best the game gives a few suggestions and a ton of finished examples of possible NPC types. 

So I'm asking here how do you build these NPCs? Is there a good way to do it from scratch, because I really really loath just reskinning existing templates. How do you come up with abilities and combat feats? Do i just take those from existing monsters or NPCs? Is there a secret to doing this better because I would really just like my NPCs to work more like they should in game. 

Start with reality. Think about that clerk you always see at the market. Think of that annoying co-worker. Then give them whatever other details you want to add. It makes it very easy to describe how they might look, or sound, along with mannerisms because you already know them.

Break NPCs into two chategories: Players and Monsters.

Very few NPCs will be Players. These are temporary party members that assist your PCs. I suggest having your actual players contribute to the design of the NPCs, but build them like PCs.

Most will be Monsters. Most of their skillsets will be noncombat-related, but they can challenge PCs as appropriate. Consider what an appropriate level challenge would be and give the NPC social skills to match. You might even give them "powers" that are appropriate to their role.

Supposedly a monster builder tool is in the works for Beyond. If it's as good as the character sheet revamp, it would be a godsend for exactly this.

I think Wysperra and Sparketh together have converged on the answer for major NPCs: They're really Player Characters - so build them as such, and make them fully rounded 3 dimensional people.

I think for that you already have the tools at hand to build them quickly, here on DnD beyond.

Give the Major NPC the "fluffy" parts first:

• What is their role in the campaign, both tactically and narratively? ( e.g. They are to act as guide into the region, and act as liaison between the Party and the local military garrison. They are also meant to be comic relief by being an upbeat personality, and a friendly rival at archery  for the Ranger ).

Then just do a full blown character concept. Honestly, with practice, and a familiarity with your campaign world ( and/or some personality or quirk generation tables ), this should take less than 10 minutes.

• What is their backstory? Where are they from, what was their family like, how did they grow up, how did they end up where they are now?
• What is their personality?
• Optionally - what is a notable physical feature.
• Optionally - what is a notable verbal quirk.
• What are their goals? Why are they with the party?
• What are their limits?

Then just build a full blown PC to match the "fluff" - as if they were a campaign characters - using the DnD online character generator. With a little practice, that takes only a few minutes.

At least this is what works for me - and it seems to create NPCs that are complex, completely "stat'd out", and notable for my party ( It was most satisfying the other session when I described a lanky blond soldier getting off a horse to greet the party, lapsed into my - terrible - german accent, and the whole party went "Hey - It's Elmar!" ).

Quote from Cloudseeker42 >>

Well. You do not have to make characters that are useful to make them have character.

You don't, but as per the OP, they're looking for how to build major NPCs - not the throw away "one notable characteristic" NPCs that the party passes in the street.

They seem to have those down pat already.

I do appreciate everyone's advice but I think it might be good to clarify on some specific points.

-I'm totally fine with the creation of NPCs as a concept and making them memorable, both major and minor NPCs. I'm also a writer and an actress so making characters and role playing them isn't an issue at all. My big issue is is making them in the sense of stats, skills, abilities. I can reasonably assess what a persons like but I have no idea what that translates to in the sense of actual combat abilities.

-I understand the making them a PC method but unfortunately Its just not working for me. I'm trying to run the campaign and its rather clunky and time consuming for me to run helpful NPCs as PCs I really do not like needing to have the players handbook open to read through how to use PC class feats I much prefer how the monster stat block NPC are super simplified and all of the feats they have are outlined right there very simply and they have maybe four. the only thing I need to look up is spellcasting which makes running encounters so much smoother. The same goes for villains. 

My method for creating most NPCs is to use a sort of decision tree. Explaining this in words is difficult, but here's roughly what I do with each NPC I need to create.

1. Will this NPC be used in combat?

• No - Give the NPC only the class features, abilities, and proficiencies that are necessary for the story. Ignore everything else.
• Yes - See below.

2. Is there a preexisting NPC block that could work?

• Yes - Use that and modify as needed.
• No - See below.

3. Is this NPC an enemy or an ally?

• Enemy - Pick a target challenge rating. Pick statistics based on CR. This includes armor, hit points, attack bonuses, etc.; everything besides actions and natural/supernatural abilities.
• Ally - Pick statistics as above, but instead base them on a PC of equivalent level X.

The point with this step is to ballpark the statistics. Don't worry about mechanical accuracy. This usually saves quite a bit of time.

4. Does this NPC need to represent a specific class?

• Yes - Add one or two abilities from that class that will be used in combat.
• No - See below.

5. Is this NPC a spellcaster?

• Yes - Pick what level spells the NPC can cast (based on CR or equivalent PC level). Add only spells that the NPC will cast in combat.
• No - See below.

6. What actions and abilities does your NPC possess? Are they natural or supernatural?

• Natural. For attacks, assign attack bonuses and damage based on CR or a PC of level X. For other abilities, create something based on a roughly equivalent combat feat, a monster ability, or a class feature from one of the martial classes.
• Supernatural. See below

7. Is there a spell this supernatural ability can be based on?

• Yes. Use that spell and tweak as necessary.
• No. Create a new supernatural ability based on a somewhat similar spell, monster ability, or class feature.

Finally, spot-check the NPC you've created. Make sure enemy NPCs match the CR you started with and that allied NPCs are roughly equivalent to the PC level you chose. If something doesn't work, change it. Otherwise, that's it.

You already have the personality side down from what you've said, so I don't think there's much to say other than try to give them a quirk to latch on to.

Jot down a handful of skills and abilities on 3x5 cards or whatever medium suits you best. That is the first step to helping you make NPCs quickly, this way you can just thumb through and find what fits the NPC you're looking to build. Melee abilities for the merc that joins from the fighter, ranger or rogue sections, a few spell cards for the priest who needed rescuing, etc.

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5e is really good about bounded accuracy, so the ability to make up AC, HP and Damage on the fly is rather simple in a way. Let's say our current group of players is level 6, they have a +3 to proficiency and an avg +3 to hit with their respective weapons/skills/abilities. So let's look at some starting points:

Your NPC will do well with something like a 15 for heavy armor, 13 for medium and 12 for light, as quick numbers.

HP, again base it off of what kind of NPC you're building: avg d8, go up or down a die for someone who's hearty or frail respectively, then give them as many hit die as their level. Pick up to a +2 con mod so as not to outshine the PCs. Apprentice wizard 6d6 and a +1 con mod = 27 (6d6 +1) HP 

Then damage is based off the weapons/skills they use, I generally do a +2 modifier to hit/damage and a Proficiency bonus equal to the party level.

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These numbers make them weaker than the PCs so they don't take the lime light, but they're also in a mid ground where I can adjust the numbers up/down to fit the needs of the NPC. Much of the rest of what I may need to roll for can be made up on the fly using the idea that +2 is the modifier from 1-9, +3 modifier from 10-14, and +4 from 15-20. That's it, that's the way I put together henchmen, NPCs, and other miscellaneous people that may join the party from time to time. 

There are stat blocks for enemy NPCs.

If you wanted, you could make an quick list of the basic stats of similar enemies at different CR levels: low, med, and high. List AC, HP (with damage dice), ability scores, saving throws.

Example using 3 random spellcaster enemies:

Low: Evil Mage [cr 1]
AC 12, HP 22 (5d8), 9/14/11/17/12/11 || saves: INT+5, WIS+3

Mid: Conjurer [cr 6]
AC 12, HP 40 (9d8), 9/14/11/17/12/11 || saves: INT+6, WIS+4

High: Archmage [cr 12]
AC 12, HP 99 (18d8+18), 10/14/12/20/15/16 || saves: INT+9, WIS+6

So we can see what tends to stay about the same, and what increases, and from that we could fairly quickly adjust the numbers a bit as needed.

It might take a bit of time to set up, but you could easily make a few lists like this based on the "archetypes" of NPCs (melee fighters, archers, atk spellcasters, healing/support spellcasters, mixed spellcasters, nonfighters/civilians/merchants, etc). Then for abilities, you could browse those enemies you're comparing to and just make a list of what abilities creatures around that CR for that type have. (So for "melee fighter cr6" I could look at Hobgoblin Warlord and Half-Red Dragon Gladiator and list: Martial Advantage, Multiattack (x3), Leadership, Brave, Brute, Parry.) You could save the descriptions in a separate doc if needed, ordered alphabetically or however you prefer.

Then whenever you're making up an NPC on the fly, you can decide approximately the CR you want them to have, quickly come up with approximate stats, and pick a couple abilities based on what you think would serve them from your quick list. And if you find they're a bit too OP, say one of their abilities or high stats came from some sort of item they had, and have them lose it - or the inverse if they're not quite powerful enough - and just jot it down as a note wherever you track your NPCs.

Cloudseeker42: You do - and you're describing unexpectedly important NPCs - but if you know ahead of time this is going to be a major NPC, why put off fleshing them out until you're in the game? Making up NPCs as you go and noting them down for consistency is an approach - but typically, I find, NPCs made up on-the-fly tend to be a lot less polished than with a little revision and editing, and if used as the sole method of NPC creation tends to lead to a lot of repetition of types.

ThoughtsofaDame: DMThac0 has a good suggestion with making cards. I'd also recommend becoming better versed with the rules, if you can. There's no reason why you should need to prop open source books. You don't need to memorize all 3 core books, just be familiar with Feats that you know the NPCs have. Or - don't use feats. They're optional. 

There's really 3 approaches being advocated here - any can work for you; choose the one that fits your style/preferences.

1. Pre-plan the NPCs, and learn them. Don't go diving into the books.Have your NPC abilities memorized.
2. Create Summaries profiles ( the 3x5 cards DMThac0 suggests ) for your NPCs. I have a party summary spreadsheet where I can manage to cram 5 PCs into 2 pages - stats, saves, ability scores, and 1-line summary of class ability or feat - so it can be done.
3. Make it up as you go along. There's no reason why NPCs have to be restricted to the same classes or limitations as the PCs ( just don't make them wildly out of whack with regards to one another ), so you can just give an NPC an ability that makes sense to you, in the heat of the moment. Just make notes of abilities as they use them, so that you're consistent from session to session. This can sometimes lead to rougher, less well rounded characters, or you might start to notice repeated types showing up repeatedly, if this is the sole method you use - at least I've seen that happen in a lot of games ( Oh, right ... another mysterious wizard ... named Steve .... )

If the only thing you are struggling with is creating combat stats for major NPCs - then I'd really recommend just chucking feats. If you do that, you only need a few numbers: HP, attack bonus/damage bonus, AC, Initiative bonus. That's it. You can even guesstimate or fudge those, based on player abilities. You can see that a decent martial 6th level character has around +6  to attack/damage ( just looking at some of the PCs in my current campaign ), and that includes proficiency and ability bonuses baked into one number.

Really - if you have that personality/character solid in your head, a major NPC's combat abilities can be boiled down into: 52HP,  +6/+3 Greataxe, -1 Initiative, AC 16

I took it from the OP saying that they were talking about "all NPCs that were designed either as helpful adventuring NPCs or as enemies" - that is, the major NPCs - and your immediate objection to my idea of fully mechanically and backstoried NPCs: "Well. You do not have to make characters that are useful to make them have character", coupled with your ( apparent ) continued stance that you should be heavily improvising these NPCs.

To be fair, I was answering a question the OP wasn't really asking; that was a mistake on my part.

Your approach is an approach - I agree. Clearly it works for you. It may or may not work for the OP's personal style - if it does, great; they have a solution :)

But do not assume what works for you is a universal answer for everyone. It's one thing to say "These are the alternatives" or even to say "This is my strong personal preference which has never let me down, I think this is worth strong consideration". It's dangerous to say "What you should do as a DM...". To be fair, I do a lot of the latter one, even though I aspire to the former; alas, I am human.

As for railroading and outsourcing the plot to the players - ironically, I find that having hyper-detailed NPCs and campaign world, but no pre-planned plot allows me to keep things fluid and non-deterministic; the exact opposite of a railroad. I can quickly tell what NPCs ( individuals and/or factions & organizations ) will do next in the moment, because I know the NPCs so well. I simply ask myself after each block of major player actions "OK, what are A,B,C and D going to try and do in response to the players, and to what each tried to do last", and move the plot along dynamically step by step. It's lead me into some really nuanced and complex story lines that were as much of a surprise to me as they were to the party. That makes for some fun sessions :)

This is my systematic and practical approach to NPC's

1. Name:

2. Race:

3. One physical defining characteristic: need not be super in depth. A scribe with ink stained fingers. Hairstyle done a certain way, facial hair type, scars, always rolling a coin

4. Role: e.g. how do they earn a living, survive, are they a guard, hermit, blacksmith

----These traits alone can take care of many problems. E.g. PC's say, I need to find a poison brewer, and they have already written one thing (role). In two sentences you can say they have a burned hand, human, average height. More than once my players won't remember the name, but they'll say, "the poison brewer with a scarred hand".

5. Stat block: I just go into the monster manual and find a stat block. No need to write brand new stat blocks

6. ideal/bond/flaw: These can be added later and provide just enough to flesh them out, and sometimes parts of it can be relevant to your story. If you need a tax collector, the ideal is greed. A noble fighter has an ideal of honor.

I don't worry about stats for NPC's. They live and die based on whether or not it is interesting.  The Retainer rules or sidekick rules are handy if you just really want some shorthand for NPC's but don't want or need the complexity of running a full character.

Quote from Wysperra >>

Start with reality. Think about that clerk you always see at the market. Think of that annoying co-worker. Then give them whatever other details you want to add. It makes it very easy to describe how they might look, or sound, along with mannerisms because you already know them.

 I agree with this. 

You can also give them a stat block. Just refer to the monster manual. Also you would not need this for every NPC. Just key figures. Even that is not a must.

Quote from jreggers >>

2. Is there a preexisting NPC block that could work?

That's the key to speedy creation.

There are many NPCs in the various rules books. Pick one. Change it if needed (I almost always change spells).

I find that most NPCs can be handled with guard or knight.