Non-profit institutions face many of the same challenges as their for profit counterparts, although with more limited resources. The rapid growth of non-profit organizations over the last decade has led to a heavily saturated market where it is harder to get funding. This has created HR challenges for staff members who are responsible for recruiting the top candidates, without having the resources to do so. Here are some additional human resource challenges that non-profit institutions face.
Being Tax Compliant While Handling Payroll
Non-profit organizations are designated as a 501(c3), and as such must remain in compliance with IRS mandates regarding special tax and payroll status. While the tax exemption means that these organizations do not have to adhere to FUTA or FICA taxes as is the case with for profit organizations, they are required to manage things such as volunteer compensation, which is considered to be taxable wages. Many non-profit institutions turn to payroll and HR software or firms who specialize in these issues.
HR staff members who work for non-profit organizations will often have a harder job than their for profit counterparts. This is often a result of insufficient staff and lower funding. When you combine this with their need to be compliant with federal regulations, it makes the situation even more challenging. However, collaborating with HR and payroll firms is the best way to shore up these weaknesses and transform them into strengths.
One of the most important requirements for any institution, whether for profit or non-profit, is the recruitment of qualified people. This can be particularly difficult for non-profit organizations due to their rapid growth which makes finding qualified individuals difficult. Additionally, many people want to be compensated well for the work they do and aren’t thrilled with the idea of working for an institution that is not for profit. This discourages many great candidates from joining and makes it tough to fill positions that require specialized skills.
Human Resources Management
This is the third greatest challenge that many non-profit organizations will face. Human resources management requires the organization to be in compliance with federal regulations, of which there are many. A lot of non-profits have small or understaffed HR departments which makes this difficult at best. This is why it is highly recommended for these institutions to work with human resources management firms, as they provide a comprehensive suite of solutions which are completely integrated.
This will make it a lot easier for non-profit HR departments to remain in compliance with the law, especially if they use systems which are tailored such as HRIS, or Human Resource Information System. These systems will help with key tasks related to recruitment and enrollment, as well as with record keeping, background checks and interviews, as well as tax forms. Using HR software is also a great way to make non-profits more effective, helping them achieve the goals they set out to accomplish.