As a nonprofit Executive Director, you are probably accustomed to needing to wear multiple hats to continuously run your organization while saving funds. But did you know, doing it all on your own could actually be costing you money?
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Human Resources is one of those areas you might be managing on your own, even when it is not within your area of expertise. This could mean you are wasting your hours and dollars on a single aspect of your business. It is also the reason why the lion’s share of Canadian nonprofits outsource their HR.
We understand that working with nonprofit status and limited financial resources exacerbates your HR challenges, and sometimes you don’t have a choice but to take everything on your shoulders. However, when you outsource your Human Resources to qualified professionals, they can handle all HR responsibilities for you at a lesser cost, while freeing your time to run the other aspects of your nonprofit.
HR Challenges of Nonprofits
There has been a substantial increase in the number of nonprofit organizations in Canada, and this has increased the competition, scarcity of volunteers, funding issues, and their HR challenges.
The following can be considered as some of the most significant HR challenges faced by nonprofits in Canada.
- Recruitment and onboarding
- Limited funding and time constraints
- Inefficiency in hiring specialized skill sets
- Provincial and Federal compliance
- Employee classification and benefits administration
- Documentation
- Employee engagement
- High employee turnover
Understanding HR Outsourcing
What does HR outsourcing mean?
It means you would be assigning some of your Human Resources functions to a third-party firm with a team of qualified HR professionals. In other words, you’d have an external team functioning like your own HR department for a much lesser cost.
Which HR functions can be outsourced?
This varies from firm to firm. However, reputed firms like HR Covered Inc. can assist you with almost all Human Resources functions such as hiring, onboarding, documentation, training, employee management, engagement, termination, health & safety, regulatory compliance, legal support, and more.
What is the cost?
Most HR firms charge you based on the number of employees you have employed at your organization. Several experienced firms like HR Covered have outsourcing options starting from $300 a month.
If you hired an in-house HR expert, it would cost you at least $4000 a month. If you hire a lawyer to write or review employment contracts, you’ll need to spend anywhere between $200 to $600 per hour. If you try to handle the HR on your own, it costs you valuable time that could be better spent elsewhere and puts your business at risk.
The amount of money you can save by outsourcing can be greatly beneficial. As a nonprofit working on limited funds, every dollar saved is a fortune.
$135.8 Billion was spent by Canadian charities on salaries and other compensation expenditures in 2015.
Check how much Outsourcing HR can save you.
7 Great Reasons to Outsource HR
1. Professional expertise in key HR areas
When employers think of human resources, they probably envision a team solely for hiring, firing and making employees happy. HR is so much more than that! From keeping the workplace safe and positive to ensuring compliance, an HR team handles critical functions that balance the business.
Writing HR documents, handling employee issues, complying with health and safety regulations, and recruiting A players might not be your area of expertise or the inexperienced HR professional at your organization.
Outsourcing providers are seasoned and qualified experts who are adept in Human Resources Management and can handle critical HR functions efficiently.
2. Professional assistance in employee management
Employee management is a holistic process that helps your employees perform at their best. This series of processes include hiring, training, performance management, interaction, rewards and recognition, and discipline. Outsourcing gives you expert assistance on employee engagement.
When you outsource HR, you are also offloading the task of communicating with your employees. When you have a dedicated team for employee communication, your employees get their issues resolved quickly, and you stay stress-free.
3. Catch up with compliance
With the constantly changing regulations, HR compliance laws can be complex matters to understand and implement for nonprofits. There is a lot at stake when it comes to HR compliance, and that’s why every nonprofit needs the expertise of experienced HR professionals.
Outsourcing gives you access to seasoned professionals who monitor the compliance landscape constantly. You will not have to stress about what needs to be done whenever there is a legislation change.
4. Custom documents
Many nonprofits rely on internet templates for employment contracts and HR policies. While these templates save time, you will have to spend extra hours and a few more dollars checking legislation or getting these documents validated by your lawyer.
Outsourcing providers like HR Covered custom write your documents based on your organizational culture and goals. Such providers not only write for you but also ensure the documents follow the latest provincial and federal regulatory guidelines.
5. Recruit A-players
Have you ever heard of A-players? These are the ideal employees always working to better themselves and meet your end goals. They love challenges and work relentlessly to make your organization better. Qualified HR professionals know where to find A-players and how to attract them to join your organization.
6. Handle terminations smoothly
Terminations are awkward and sensitive situations to handle. Not only that, they can leave your organization open to litigation. HR professionals understand how to apply employment standards, human rights legislation, and common law. This means they know how to manage terminations in a way that mitigates legal risk and preserves your good reputation. They can save you money for many termination situations, but they also understand when it’s necessary to involve legal services to protect your business, and they can counsel you as such.
7. Legal support
No matter how excellent your HR team is, there are times that businesses need legal support across all industries. The nonprofit sector is no exception. Your in-house HR professional might not always have the expertise in employment law that is required but keeping a lawyer on retainer is an expense most businesses try to avoid. A viable option is to look for a Canadian HR outsourcing company that includes legal services or partners with a legal team at a reduced price, so you can have access to a lawyer if needed, at a lesser cost to your organization.
Aren’t these reasons good enough for a nonprofit like yours to consider HR outsourcing?
Things to remember
What are the things you should keep in my mind while selecting an outsourcing firm?
- Services offered + customizable packages
Get a deep understanding of the services offered by the outsourcing firm. Check if you need all of those services. If not, check if you can get a customized package based on your needs?
- Pricing is based on the number of employees
Say yes to a firm that offers pricing based on the number of employees and try to avoid the ones with a flat, fixed price.
- Easily accessible client support
It is absolutely necessary for your outsourcing partner to have an available support team or a dedicated client support contact. Being able to get the answers when you need them can be a huge difference when dealing with more time-sensitive HR concerns.
- Reports and tracking
Check if your provider gives you an option to track the work done. For example, do they provide weekly or monthly review calls or reports? Ensure there is transparency in the services offered.
- Know your partner
During your initial interactions with a provider try to understand the scope of the services they offer. Will they act as your outsourced ‘in-house’ team or would they be available to you as an external consultant for project-based work? Both can work for your organization, but make sure you find a solution that is aligned to what you need and understands your business after meeting with them. You need someone who can handle all the HR functions on your behalf efficiently and responsibly.
Turn HR into a profit centre by outsourcing
The whole idea of outsourcing is about offloading HR to experts so you can focus on the core activities of your organization. Your outsourcing partner can save you time, reduce your risks, and actually help you transform your HR into a profit centre that’s contributing to the growth of your organization. An outsourcing partner can assist you in recruiting A-players who can help you scale up the organization. Nonprofits like yours can save a significant amount of time and funds by outsourcing HR so you can spend your time and funds on other essential activities like improving your online presence or fundraising.
Need to know more? Talk to an expert today.
About HR Covered: At HR Covered, we have a deep understanding of the critical organizational needs and processes specific to Canadian nonprofits. We ‘get’ your culture, your goals, and what drives you, too. We are focused exclusively on and dedicated to delivering the most effective HR Outsourcing experience for our clients. We are well-versed in monitoring the compliance landscape and applying HR strategies that will save you time and money. Our unparalleled responsiveness and impeccable service have helped more than 200 nonprofits in Canada to focus on their core activities. For more info visit our website: www.hrcovered.com or call us at +1 647-496-6096.
