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3 Unique Challenges faced by HR in non-profit organizations

Posted Tuesday, January 17, 2017 by Unicorn HRO

3 Unique Challenges faced by HR in non-profit organizations

As with for-profit companies, non-profit organizations face the same issues in their day-to-day workings, albeit with limited resources.  As a result of their non-profit status, these organizations face a much more difficult road, as the increase in the amount of non-profit organizations over the past several years has meant a decreased amount of overall funding.  This presents a challenge for non-profit HR staff who need to ensure recruitment of the best possible candidates, despite not having access to the resources that for-profit companies do. 

Below are 3 challenges which face HR staff in non-profit organizations.

Staffing Needs

One of the most important jobs of a non-profit company is to recruit and retain the best people for the job.  This is especially tough, as with a larger number of non-profits emerging in recent years, there is more competition over getting the best possible candidates for any given organization.  This is especially hard, as working for a non-profit means lower earnings and a work/life imbalance for any given staff member; ultimately discouraging a lot of potential candidates from seeking employment in the non-profit sector.  This can present problems for HR staff trying to fill positions which require unique skills.  It’s important for HR staff to identify what the organizations needs are and to work hard to recruit potential candidates accordingly.

Management and HR

HR staff in non-profit organizations also face challenges when it comes to staying compliant with government regulations.  This is especially the case when many non-profit companies have much smaller (or even non-existent) HR departments compared to for-profit businesses.  Indeed, one of the best ways for a non-profit to stay compliant is to consider partnering with an HR Management company, such as Unicorn HRO, which offers a fully integrated suite of HR solutions, to keep up to speed on compliance.  These companies are also able to provide tailored solutions such as Human Resource Information Systems (HRIS). These systems can help with performing important tasks related to benefits enrollment and hiring, as well as recordkeeping related to the interview process, background checks, tax forms, and performance evaluations.

Managing Payroll while being tax-compliant

Unlike for-profit companies, a non-profit’s 501(c3) status means that it has to be compliant with IRS rules relating to special payroll and tax circumstances.  While tax exempt status means that non-profits are not responsible for some FICA and FUTA tax rules which are applicable to for-profits, these organizations should be aware that they are still responsible for things like volunteer compensation, especially monetary compensation, which needs to be counted as taxable wages.  Again, one of the best ways to ensure legal compliance is to consider partnering with an HR and payroll company that specializes in these matters.

HR staffs at non-profit organizations, when compared with those at for-profit businesses, have a much tougher job, in many respects, due to limited resources and smaller staff numbers.  However, when it comes to being compliant with federal laws, they do not necessarily need to take on all of these responsibilities themselves.  Partnering with HR companies and payroll companies means that non-profits can outsource these responsibilities to reliable experts. HR Management Consultants can help non-profits choose the most appropriate HRIS solution, allowing the staff’s focus  to be on achieving the goals set out by the organization.

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