Nonprofits, as well as their counterparts in the private sector, traditionally took care of all human resources matters in-house, from recruiting new talent to retaining productive employees, nonprofit organizations spent the time and money required to complete all HR tasks. Have you ever thought about outsourcing HR?
How the times have changed.
Once considered an outlier for nonprofit organizations, more than one-third of all employers registered in the United States outsource at least some HR functions. As part of the management team of a nonprofit organization, the time has come to consider delegating HR functions to another party for several reasons.
Frees Up Considerable Time
As the saying goes “Time is money,”. For cash-strapped nonprofit organizations, the timeless saying is even more true. Addressing HR responsibilities takes a considerable amount of time, from processing payroll to maintaining updated volunteer files. With your nonprofit’s HR outsourced, you and your team gain more time to pursue the other objectives of your nonprofit organization, such as planning more fundraiser drives and scheduling speaking arrangements with local movers and shakers.
Lower Administrative Costs
Outsourcing HR functions means you pay a fee to another company to handle all HR tasks. The one-time fee is accounted for in your nonprofit’s ledger and end-of-the-year financial statements. Although you might think a one-time fee might put a huge dent in your budget, the fact remains that outsourcing HR saves your nonprofit organization money.
Think about all the paperwork you no longer have to process and maintain on file. Think about the elimination of in-person onboarding sessions. Think about not having to learn about the new rules and regulations government agencies impose on employers.
The bottom line is outsourcing HR saves your nonprofit a substantial amount of money in the form of lower administrative costs.
More Productive Employees
Nonprofits are known for trying to get more out of less, especially when it comes to staffing. It is common for nonprofit employees to address a wide variety of responsibilities. This includes incorporating human resources functions into otherwise extremely busy workdays. Outsourcing HR functions alleviates the workloads of your employees, and in return, you should discover a dramatic improvement in morale.
Higher morale typically means higher productivity, which positively impacts your nonprofit organization’s financial statements. Labor costs decline and output increases to boost the financial health of your nonprofit organization.
Just one violation of a government-mandated HR regulation can set your nonprofit organization back hundreds, if not thousands dollars. By outsourcing human resources functions to an experienced company, you minimize the financial risk that is associated with violating HR laws. You can expect accurate recordkeeping, as well as strict adherence to government rules regarding hiring new employees.
State and federal laws frequently change, which means it is a good idea to hire a professional team of human resources experts to stay on top of the rapidly changing laws and regulations.
At Ernst Wintter & Associates LLP, we provide comprehensive audit, review, examination and compilation services as well as tax services that fit your business needs. Our professionals have specific expertise in the financial services industry, nonprofit sector, and employee benefit plan audit requirements. Please contact us today.