Does My Nonprofit Need an HR Consultant? 7 Signs to Look For
This is a guest blog by NEXUS
Between hiring, retention, performance reviews, and training, a lot goes into HR. Some busy nonprofit leaders might even find themselves overwhelmed by HR-related tasks when their actual job focus is supposed to be program management.
One solution to this problem is hiring an HR consultant. HR consulting firms can provide the expertise and resources your team needs to untangle your current HR policies and create any new ones you may need. However, hiring a consultant is also an investment in and of itself.
To help your nonprofit assess its HR strategy, we’ll review seven signs that indicate now’s the right time to hire an HR consultant.
1. Leaders Spend More Time on People Issues Than on the Mission
This is often the first issue leaders notice. If your executive director or program leader is spending the majority of their time on hiring, scheduling, and employment paperwork, then you need help with HR.
To determine if you need help from an external nonprofit consulting firm, ask yourself these questions:
Is one leader fielding HR questions by default because no one else owns them?
How often do people-related issues interrupt your planned work?
Have you missed any deadlines or opportunities due to a lack of available staff time?
Do managers pass team concerns on to you instead of resolving them?
Does your team have the expertise to handle complex HR needs?
If you know you need additional time in your day for HR, consider whether you need part-time or full-time assistance. HR consultants can act on a project or retainer basis, so you can get the support you need without having to commit to hiring a new full-time team member.
2. Turnover Is High or Rising
Frequent departures cost time, money, and institutional knowledge. Plus, replacing an employee requires restarting the time-consuming hiring process.
High turnover is usually a symptom of workplace struggles, such as burnout, inadequate compensation, or poor management. A consultant can help you diagnose the causes behind high turnover and recommend solutions.
For example, after conducting exit interviews with a few former employees, the HR consultant might uncover that your nonprofit’s informal training process leaves employees feeling underprepared, causing stress and confusion. The consultant might then help you develop new training programs focused on preparing and engaging new employees.
3. You're Struggling with Recruitment
If you have roles sitting open for months, few job applicants, or regularly end up hiring ill-suited candidates, you may benefit from turning to an HR consultant. Your consultant can help improve your recruitment process by:
Creating job description templates
Designing a system to quickly review applicants
Refining your interview process and questions
Implementing policies to ensure promising candidates aren’t left waiting for responses
Streamlining your referral and background checks process
Additionally, at many small nonprofits, volunteer recruitment and management fall under HR’s purview. Recruiting, onboarding, and training for employees and volunteers follow many of the same best practices, but some differences remain. Better Impact’s guide to volunteer training emphasizes the importance of creating unique policies for employees and volunteers. For example, volunteers may have different attendance and scheduling policies as they lack formal paid time off.
4. You Don't Have Clear Compensation Policies
Due to tight budgets, compensation can be a challenging topic for nonprofits. However, your organization will still need consistent policies to prevent pay inequities and offer packages that are as competitive as possible with those of similar organizations.
Compensation services a nonprofit HR consultant may offer include:
Compensation design
Pay equity analysis
Market analysis and benchmarking
Executive compensation
Incentive compensation design
While HR and compensation are closely related, keep in mind that not every HR consultant can provide compensation assistance. Research each consultant to check whether they have all the services you need, and create a request for proposals (RFP) that outlines your compensation challenges.
5. Your Policies Are Inconsistent or Out of Date
For many nonprofits without formal HR, policies often develop on an ad hoc basis. For instance, you might not have a policy for when employees need to take time off but run out of sick days until a team member gets a bad case of the flu.
An HR consultant can help formalize your current policies, create new ones, and ensure your documented practices line up with how your organization operates in practice. Specifically, a consultant may help you:
Update employee handbooks: Employee handbooks should be the ultimate source of truth for employee conduct. A consultant can help you word specific policies and ensure your current handbooks reflect your actual practices.
Create performance review criteria: When employees know what they need to do to advance, they’re able to set target goals, improving engagement and minimizing confusion or frustration over advancement and compensation decisions.
Develop a dispute resolution framework: Clear, fair processes for handling employee complaints can help your nonprofit stay on top of potentially fraught situations before they escalate.
6. You're Unsure Whether You're Compliant
Even if your nonprofit lacks expertise in employment laws, it is still your job to maintain compliance with all relevant federal, state, and local regulations.
If your nonprofit is having trouble adapting to a new policy or just isn’t sure whether you’re currently compliant, consider bringing in an HR consultant. It’s these experts' jobs to keep up with changes and understand policies, meaning they should be able to answer all of your compliance questions.
For example, a consultant may help you sort out your work classifications to determine who should receive which benefits. Or, a consultant may help you edit all of your job descriptions to comply with a new pay transparency law.
7. Your Organization Is Going Through Rapid Change or Growth
Growth is exciting, but it can lead to instability. Rapid hiring, mergers, and new location openings all raise questions related to compensation, hiring, and organizational structure. If your HR team is struggling to keep up, it may be a good idea to bring in a consultant to ease the transition.
HR consultants can also help individual employees grow into new roles. ProspectHR’s guide to employee coaching explains how, unlike mentoring, which is usually conducted internally, coaching benefits staff by having an outside expert come in. These external consultants are bias-free, meaning their focus is on helping each employee grow rather than simply adhering to current training practices.
If one or more of these signs sound like your nonprofit, then it’s time to start reviewing HR consultants. Look for firms that specialize in nonprofits to partner with an expert who will understand your organization’s unique challenges.
