Nonprofit organizations understand what it means to be nimble, doing grand work with small, mighty teams that work tirelessly to address pressing issues. According to Zippia, nonprofits employ only 10% of the U.S. workforce, but contributed roughly $1.5 trillion to the U.S. economy in Q3 2022. That is a big lift.
Such Herculean effort day in and day out can take a toll on nonprofit employees, who often wear several hats that come with time-consuming administrative tasks. Not to mention the other factors that make achieving goals a steep climb: limited resources and tight budgets.
Many nonprofits tap outside help from a Professional Employer Organization (PEO) to boost their access to state-of-the-art technology. They also look to PEOs to alleviate much of the administrative burden for their nonprofit, and for help in streamlining their HR functions so staff and volunteers can focus more on the mission and make a bigger impact in their community.
In this blog post, we’ll explore some common challenges that limit nonprofits’ impact and how a PEO can help overcome them.
HR Tasks Can Burden Nonprofits
Working in HR is a tough job. In a recent report from the Society of Human Resource Management, more than 95% of HR professionals surveyed said HR is too much work and 81% said they are personally burned out.
Most people who go into nonprofit work are compelled by their passion for their organization’s cause, not to spend their time on recruitment, new-hire onboarding, employee file maintenance, and disciplinary guidance. Many nonprofits struggle to find employees who are both passionate about their cause and about performing the many time-consuming HR functions needed to keep a nonprofit running effectively.
Manage HR Functions with Ease
PEOs provide up-to-date HR guidance and support that help nonprofits stay compliant and avoid risks and penalties. They typically assist organizations in four key areas:
- Compliance: Reducing employment-related liability arising from government mandates including those issued by the Equal Employment Opportunity Commission, Occupational Safety and Health Administration, and the Department of Labor.
- Support: Personalized guidance and support from a team of knowledgeable HR experts.
- Efficiency: Streamlining HR operations with lower overhead costs that save time and reduce stress.
- Technology: Providing customizable technology platforms that deliver seamless, user-friendly experiences for management and staff.
PEOs Help Nonprofits Navigate Payroll Challenges
When it comes to paying employee wages, there is little room for error. According to The Payroll Edge, “24% of employees will look for a new job after the first payroll mistake with another 25% choosing to leave after a second issue.” Nonprofits, whose teams are already lean, cannot afford to lose staff due to avoidable payroll missteps.
Payroll mistakes are not just inconvenient for employees, they can incur serious penalties from state and federal wage and hour agencies, which may severely impact a nonprofit’s bottom line. Running payroll is a nonstop job. The most common pay period frequency is bi-weekly, or every two weeks. Processing payroll at such a regular cadence can be stressful and time-consuming.
PEOs’ payroll and timekeeping solutions give your management team immediate access to secure web-based payroll software reports, payroll and HR experts, and helpful customer service when they need it.
Optimizing Talent Management Efforts
Finding the right employees for a nonprofit can be challenging. With limited recruiting budgets, nonprofits may not have the luxury of advertising their job listings to the widest audience. Furthermore, the right talent may not leap at the salary that a nonprofit has to offer.
As such, nonprofits may opt to recruit from within, upskilling existing talent without growing their team. While this may be more cost-effective and less risky in the near term, it does not allow a nonprofit to scale their organization and free up staff to focus on additional tasks.
PEOs have recruiting experience placing skilled professionals across a range of industries. They can help nonprofits attract and retain qualified candidates. In addition to recruitment assistance, PEOs can help nonprofits establish the right pay and benefits, thereby ensuring salaries remain competitive and reducing the cost of hiring and training new employees.
What Could a PEO Do for Your Nonprofit Organization?
At the end of the day, your nonprofit is a business with a bottom line that needs to stay in the black. PEOs can help you specialize in a variety of business functions without the expense of hiring multiple experts. By leaning on external services like those provided by SWBC PEO, you can optimize your efforts with cost-effective strategies, remove the burden of time-consuming administrative tasks, and champion your cause without being mired down by day-to-day HR functions.
