May 24, 2022
Why Outsource HR for Your Nonprofit

Spending some of your nonprofit’s funding on HR outsourcing might send your heart into overdrive at first thought. We get it! Nonprofits often have lean teams and limited budgets. 

But your staff probably doesn’t have the experience or bandwidth to handle HR matters — especially the complex ones. This can lead to productivity and legal issues and even put your organization at risk, which takes away from focusing on your mission.

So if your people are maxed out and you know it’s time to find a new solution, here are the top benefits of HR outsourcing for nonprofits. Stick around to the end for three quick tips to find the right fit for your organization! 

Benefits of HR Outsourcing for Nonprofits

Manage Administrative Costs Better

As a nonprofit organization, you must report administrative costs as a part of your annual financial report.

Instead of piling complex HR functions and issues on inexperienced staff who don’t have access to necessary tools and support, invest in outsourced HR, and be more transparent about your spending with help from an HR consultant. Depending on which tasks you outsource, you can:

  • Keep costs low by partnering with a firm that offers pay-per-employee pricing or lets you pick and choose your services (that way, you don’t have to pay for services you don’t need).
  • Provide detailed reports highlighting the organization’s internal spending.
  • Lower administrative costs by taking HR paperwork and tasks off your team’s plate.

Reduce HR Expenses & Inefficiencies

Speaking of lowering costs, we know that efficient processes, updated technology, and experienced staff who get along all help drive your nonprofit’s mission. On the other hand, excessive time spent on poor operations and employee relations can impede progress.

Allowing your team members to get back to their zone of genius will positively impact your mission. After all, you hired them for their skills and expertise in their respective fields — not so they could struggle through operations where they have little to no knowledge. An HR consultant will be able to complete essential HR tasks, projects, and training in a fraction of the time.

Remember, just because you can keep a valuable task like HR in-house doesn’t mean you should. Nonprofit HR outsourcing is an upfront cost that will pay off by ensuring you have the proper systems in place and your organization is compliant. This includes time-consuming and costly responsibilities, such as: 

  • Payroll
  • Benefits
  • Recruiting and hiring
  • Compliance and risk management
  • Workplace conflicts and investigations
  • Performance management

Check out our complete list of the 10 most popular outsourced HR functions

Focus on Your Nonprofit’s Mission

As mentioned above, outsourcing HR for your nonprofit organization will free up employees to make a greater difference in your mission. But when they waste their time, resources, and energy on HR matters, it prevents them from taking meaningful action. 

Investing in an HR consultant will benefit your overall purpose. They will help you: 

  • Develop and manage recruiting, hiring, and termination processes.
  • Keep up with laws and regulations and update relevant policies and procedures.
  • Administer day-to-day HR duties, including payroll and PTO requests.
  • Create policies, an employee handbook, and employee documentation.

We’re guessing your passionate team would rather focus on fulfilling your mission and helping others without interpersonal issues, operational bottlenecks, and other distractions. Nonprofit HR outsourcing will take these core functions off your team’s shoulders and allow you to get back to your critical work.

Give Your Team Top-notch Resources

As a nonprofit leader, you might have to fight to prove that your staff deserves an income, let alone benefits and support for other issues. For example: 

  • Who should they call if they have a payroll or tax question?
  • How can they call in sick or request time off? 
  • What is your new hire onboarding process, and who manages it?
  • Do you have a workers’ compensation process?
  • Is there a neutral party they can turn to with a concern or complaint about a coworker? 
  • Who will manage those concerns when they arise (because people problems are inevitable when you work with humans)?

You may hardly have time to consider the above, but they are crucial standards in every organization. An experienced HR firm will be able to help you find the most cost-effective solution for providing fair compensation and benefits packages to your employees. They will also act as that resource for your team, conducting everything from onboarding and performance reviews to handling everyday questions and concerns. 

HR for Nonprofits: 3 Quick Tips

So, is HR outsourcing right for your nonprofit organization? How do you find a good fit? Here are three steps to help you decide.

1. Assess Your HR Needs

First, answer the following questions as you evaluate: 

  • Do you have internal HR staff? If so, what is their experience and bandwidth? 
  • How many employees do you have? 
  • What are your growth plans for the organization? 
  • What are your primary HR challenges and pain points? Consider the commonly outsourced HR tasks we mentioned earlier.
  • Do you need one-off assistance or ongoing support? 
  • Do you need an HR consultant to be onsite? 

Whether you need help with one area or complete outsourced HR, you should also do a cost-benefit analysis. Will outsourcing free up enough employee time to make it worth it? Should your HR partner have a deeper understanding of your organization’s culture and history? What is the impact of letting current HR employees go? Consider all the pros and cons.

2. Do Your Research

Once you’ve assessed the gaps in your organization and have support from your team and board of directors, start researching HR consultants. Be sure to ask if they: 

  • Have worked with other similar nonprofits.
  • Offer the full scope of services you need.
  • Are licensed and certified by trusted industry organizations like the Society for Human Resources Management (SHRM).
  • Have case studies and testimonials to share.
  • Provide onsite, offsite, or hybrid services.
  • Offer flexible packages and pricing.

Always have your attorney review any contract BEFORE you sign it. 

3. Set Internal Controls

How will you manage the relationship with your new HR firm? Put controls in place to ensure an internal manager has a direct insight into the work and costs. This could be an internal HR manager or specialist if you have one. Then, have them and another manager review the vendor’s invoices.

Learn how to choose the right outsourced HR consultant in our guide.

When it comes to HR for nonprofits, there are unique challenges to consider — but when done right, it can help launch your organization to the next level! To discuss your HR needs and find out if BlueLion’s services are a fit for your nonprofit, contact us at 603-818-4131 or today.

The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.