Guest post by Astron Solutions
Whether you’re new to the nonprofit world and just getting ready to hire your first staff members, or yours is a well-established organization with a large team of employees, you know that your internal team is what powers your mission.
And while you wear a number of different hats as a nonprofit leader, one of the most important is being an employer. This is because effectively managing your human resources (HR) is imperative for providing a great employee experience and, consequently, having a well-run organization that is able to meet your beneficiaries’ needs and further your cause.
In this beginner’s guide, we’ll walk you through the basics of nonprofit HR and help you prepare to level up your nonprofit’s HR strategy. Let’s begin!
Do Nonprofits Even Need HR?
Yes, nonprofits do need to have HR practices and policies in place. Even though the setup and tax landscape for your organization looks different from that of a for-profit company, and you raise money for a specific cause instead of selling goods or services to customers, you have one big thing in common: just like a company, your nonprofit is an organization with employees.
According to Astron Solutions, this means your nonprofit must comply with any applicable employment regulations or policies, which makes having a strong HR strategy in place critical. In addition to complying with the law, an HR strategy also empowers you to keep your employees’ needs top-of-mind, which can positively impact your recruitment and retention efforts.
There are a number of unique challenges that your nonprofit will face as an employer, including:
The mission-driven nature of your organization. In a for-profit organization, the focus is on pulling in revenue, and HR helps to support the organization’s efficiency and profitability. But for nonprofits, your mission is at the heart of everything you do, and it can be much more challenging to tie all of your HR efforts to that mission.
Limited resources for HR work and compensation and benefits. Many nonprofits find it difficult to make time for HR responsibilities and to have enough in the budget to put toward employee compensation and benefits. This makes it hard to compete with for-profit organizations for talent. A popular approach to tackle this challenge is to emphasize total rewards in your compensation strategy, where you focus on both direct and indirect forms of compensation.
Complex staffing needs. Many nonprofits turn to grants to help fund specific programs or projects. These sometimes leave nonprofit organizations more limited in how they schedule and staff different initiatives as they meet the requirements of funders and work on tighter budgets and stricter timelines.
In addition to considering your employees’ needs and the challenges your organization is faced with as an employer, think about how a strong HR strategy can empower you to do more for your mission. When you have the policies and practices in place to optimize the employee experience, your employees will be satisfied in their jobs, and your team will be in a position to do more for your beneficiaries.
HR Responsibilities for Nonprofits
If your nonprofit doesn’t currently have the resources to support an entire HR department or hire an HR professional, consider planning ahead to hire an expert in the near future. For the time being, you could outsource your HR needs or work with a consultant.
Regardless of what HR looks like at your organization, here are the responsibilities that your HR professional will need to take on:
Talent management. From writing eye-catching job descriptions to hiring the right candidates to onboarding and engaging employees, there’s a lot that goes into the employee lifecycle. Your HR team will develop the strategies your organization needs to find great employees and retain them.
Compensation strategy. Compensation will greatly affect your organization’s ability to attract, hire, and retain top talent. Take a total rewards approach to make the most of limited resources, and ensure that you have a strong communication strategy in place to ensure that your employees understand how performance impacts pay and how they can advance their careers at your nonprofit.
Compliance, documentation, payroll, and tax reporting. One of the most important things your HR team will help your organization manage is avoiding risk and documenting and maintaining compliance with all employment regulations, such as employee classification. Your HR team also may be in charge of payroll or be involved in submitting your 990 form to the IRS, though these responsibilities often fall to financial professionals.
Culture building. Internal culture plays a big role in how satisfied employees are with their jobs, and your HR team will take on the task of developing a positive, collaborative culture within your organization. For example, your HR team may implement an employee recognition program, lead trainings in diversity, equity, and inclusion (DEI), or promote a healthy work-life balance.
Volunteer management. While larger nonprofits usually have a dedicated volunteer coordinator or program manager, your nonprofit may be in the position where your HR team manages your volunteers, helping to recruit and retain individuals for your program and ensure they have a positive experience working with you.
While your HR team will be primarily responsible for managing all of these different tasks, remember that it will take a concerted effort by everyone at your organization to make your nonprofit a great place to work and to keep it that way!
3 Best Practices for Stronger HR Management at Your Nonprofit
Whether you’re getting started with HR responsibilities for the first time or you’re fine-tuning your current strategy, there are three best practices you can leverage to take your efforts to the next level:
Partner with an HR consultant. Whether or not your organization has a full HR department, a nonprofit HR consultant can be a valuable partner for improving your HR strategy. These experts can take a critical look at your existing HR structures and policies and give you tailored recommendations for how to improve, whether you need assistance with your compensation strategy, employee communication efforts, or another aspect of HR.
Prioritize employee engagement and health. Double the Donation suggests providing opportunities for continued learning and career development, giving employees meaningful and challenging work, and celebrating milestones and special occasions. You also can champion mental and emotional well-being by doing things like encouraging employees to use their PTO, holding seminars on the importance of self-care, or leading weekly meditation sessions.
Solicit employee feedback. HR is all about focusing on the people who make your nonprofit’s work possible. So, if you’re wondering how your employees feel about a certain policy or initiative, don’t hesitate to ask them. Collect feedback in meetings with employees or through anonymous surveys. Then, ensure you’re acting on that feedback to make your HR strategy even more effective.
Another general best practice is to be open and transparent with your employees and to encourage two-way communication. This will help employees develop trust in and loyalty to your organization, which will lead to better retention rates and better outcomes for your cause.
Just like their for-profit counterparts, nonprofit organizations need HR policies and practices in place to ensure they’re being the best employers they can be. Use the tips in this beginner’s guide to kickstart or strengthen your HR strategy, and remember that you can always turn to an expert consultant for assistance.