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Blog: 5 Signs It’s Time to Outsource Your Nonprofit’s Human Resources Management

<strong>5 Signs It’s Time to Outsource Your Nonprofit’s Human Resources Management</strong>

For a nonprofit, human resources best practices can mean the difference between strategic growth and major headaches. In many cases, issues don’t arise until an organization has grown to the point that the executive managing HR alongside other duties simply can’t keep up. Waiting too long to prioritize human resources can lead to staff and stakeholder complaints, high turnover, and non-compliance.

Below we outline five signs that it’s time to reprioritize HR by outsourcing this critical department. With the support of a human resources outsourcing consultant, nonprofits can easily put practices in place to better support staff and stakeholders.

1. You have a challenge that needs to be solved

A specific challenge is often the first driver encouraging nonprofit organizations to consider human resources outsourcing. Without specific expertise in compliance, employee relations management, benefits administration, or other nuanced aspects of HR, it can be easy for an organization to overlook the required items. This is a key area where an outsourced consultant can deliver valuable nonprofit human resources best practices.

Missteps in seemingly simple areas can carry potentially expensive consequences for non-compliance. Outsourced HR experts can provide tremendous value in putting proactive best practices in place. Once those issues are addressed, an outsourcing expert can dig deeper into organizational needs to create even greater value.

2. Your organization is growing

As organizations grow, so do their employee management and compliance obligations. A tipping point often comes at the 50-employee mark, when there are obligations to meet in administering federal COBRA for health insurance, providing information about FMLA, and many other requirements. There are enough obligations that an organization can benefit from an assessment to ensure they’re in good shape. In addition to providing areas for improvement, the assessment can address nonprofit human resources best practices.

Once organizations recognize there’s a point at which they can’t manage HR without this specific expertise, they often turn to outsourcing as the most efficient way to ensure compliance.

3. Turnover is rising

High rates of turnover are generally a sign of an underlying issue—a potentially expensive issue. The cost of making a single hire averages $4,700, according to benchmarking data from the Society for Human Resource Management. One common solution for getting to the bottom of turnover issues is an employee survey. However, organizations can face challenges when it comes to analyzing and acting on this data. An expert in this area can provide an objective assessment to understand HR relationships and employee relations issues, and identify strategies to slow turnover.

Outsourced HR experts can also provide more nuanced support, such as delivering a cross-generational approach to employee management. For example, many organizations are currently questioning how best to retain Millennials and manage Generation Z’s entry into the workplace. These generations tend to have different expectations of their workplaces than previous generations, and this requires a different approach to benefits and management. An HR consultant can offer strategies for how to mentor younger employees, help them grow in your organization, and help managers feel comfortable with this approach.

4. You are changing the workplace structure

Growth isn’t the only reason for an organization to change its structure. Many nonprofits are navigating new expectations about work, including a shift to remote or hybrid work. These changes in structure are excellent times to touch base with an HR professional.

Many organizations making this switch to more remote work are struggling with the process of how to operate in different states. There’s often confusion about regulations across state lines. While this issue can be easily resolved by registering as an employer in any state in which its team is working, this isn’t an obvious fix. This know-how comes with specific HR expertise.

5. There are silos between HR and other departments

Some human resources outsourcing consultants can provide a big-picture perspective that helps nonprofits better understand connections between siloed departments. Consultants can create bridges between HR and Finance, for example. These two departments are responsible for a number of shared areas, yet do not always work closely together in large organizations. Connecting these two departments can help streamline payroll, compliance, and other issues where responsibilities overlap.

In other cases, nonprofits may benefit from a stronger connection between their HR department and research functions. After all, salary surveys and professional development tools aren’t just benefits for members or stakeholders. There may be areas of utilizing these tools to create greater value for your organization’s staff as well.

Reprioritize your nonprofit’s human resources best practices

Every organization faces unique challenges, but it can be hard to see this from the inside. A third-party consultant can provide an objective assessment of your structure, culture, or activities. This assessment process can give nonprofits human resources best practices that can strengthen their organization. There are also more tactical areas where an outsourced HR team can help, such as project-based training or in-person professional development opportunities for staff. This tailored approach can help provide your team with the skills needed to succeed—and provide a hint at the deeper value of an outsourced HR department.

Nonprofits don’t have to wait for a clear sign to decide it’s time to outsource their human resources management. If you’re ready to learn what outsourcing HR can do for you, contact Vault Consulting today.

Kendra Janevski, SPHR, SHRM-SCP
Kendra Janevski, SPHR, SHRM-SCP
Kendra’s varied background in non-profit organizations, associations and consulting is the perfect fit to lead Vault’s HR strategy, organizational development, and personnel investment initiatives. She drives creative process improvement for internal systems, designs...
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