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HR Challenges for the Non-Profit Industry

A list of key challenges and tips on how to tackle them

Elle Mason

by Elle Mason - July 14th, 2021


How has COVID-19 impacted the non-profit industry?

The non-profit industry struggled tremendously as a result of COVID-19, with many having to close their doors for good.

To start, many nonprofits are managing leaner budgets than their for-profit counterparts, and are tasked with reinvesting their money into their services, while often relying on grants and donations to raise money in the first place.

But as COVID-19 swept the nation, indoor events (like crucial fundraisers) were cancelled. People who would ordinarily be donors were managing job loss and budget constraints themselves, and particularly for nonprofits that serve communities and address needs around housing, hunger, and education - demand for services grew.

To date, while many have survived, others are still operating in a state of emergency - with the HR experience being one that requires them to manage extreme budget and staffing restraints while trying to stay on top of the influx of new regulations, staffing challenges and more. With the pandemic also exacerbating existing nonprofit HR pain points, we’ve compiled a list of key challenges and tips on how to tackle them in 2021. 

Key Challenges in the Non-Profit Industry

1.) Unique Staffing Needs: The nonprofit sector has exploded in recent years, at a rate far higher than for-profit businesses. This has left the industry facing high competition as they search for unique skills and critical experience - while also having to recruit and attract people with salaries that often trend far below their for-profit peers.

2.) Record-Keeping and Payroll Challenges: Like all businesses, nonprofits are required to maintain a large volume of records and employee information, but they also have unique payroll and tax circumstances, particularly in terms of FICA taxes, FUTA taxes, and taxable wages when it comes to giving volunteer tangible tokens of appreciation.

3.) Volunteers: Speaking of volunteers, although many non-profits rely on them to help provide services, there are strict federal guidelines around how and under what circumstances they're legally allowed to do. The distinction between whether someone is a volunteer or employee is also often determined by state law - and not at the discretion of the organization. For example, the Fair Labor Standards Act has specific guidelines and there are a number of considerations that determine whether an organization is covered or not.

4.) Compliance Challenges: Because non-profits can often operate under small budgets, they may not feel that they have the resources to compensate an HR department or lead, leaving them to try to navigate complex compliance requires from local, state and federal governments all on their own, through staff members who are already managing full plates.

5.) Employee Engagement and Retention: While many people enter the nonprofit industry with the goal of being mission-driven, world-changing individuals, they often find themselves experiencing burnout after a few years. The combination of often long hours and lower pay (compared to other industries) can leave people feeling disengaged - not to mention the emotional overwhelm that can often come with working face-to-face with some of our most vulnerable populations or critical social issues.

How to Overcome these HR Challenges 

HR professionals in the nonprofit industries are often working without the support of a massive department - meaning they have limited time and resources to manage all of these challenges, in addition to being a resource for "people problems." Given that, an HR software that can automate workflows, answer critical compliance questions, and empower employees to access their own data is one of the best ways to navigate these challenges.

HR Software for Non-Profit Businesses

Manage the Unique Compliance Challenges: Limited HR budgets may leave many nonprofits more vulnerable to compliance risks. GoCo can help with storing and filing employment documents, automating state and federal tax withholdings, and keeping up with the latest IRS regulations.

Streamline Payroll and Tax Calculations: GoCo's payroll solution not only makes benefit deductions and reporting easy, but also helps with tax calculations for voluntary compensation and other sector-specific challenges.

Easily Onboard a Variety of Roles: With paperless hiring documents equipped with built-in e-signatures, self-service benefits enrollment, intelligent payroll setup, and automated onboarding workflows, GoCo can ensure a unified onboarding experience for your entire workforce.

Manage Your Distributed Workforce Virtually: Digital time clocks, self-service benefits, and the ability to track time to specific Labor Groups for job costing are all an integral part of standardizing remote workflows.

Retain Your Best People: GoCo's HRIS helps employees stay in the know by providing at-a-glance self-service employment information, pay stub information, and self-service benefits.

Drive Productivity: Ditch outdated processes and welcome automated workflows. GoCo can help you streamline anything from onboarding checklists to employee requests.

Read more here to see  how GoCo helps non-profits with HR.

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