At one time, non-profit HR departments might have been primarily responsible for recruiting and hiring with the occasional disciplinary intervention or conflict resolution matters. While today, many HR staffers have added numerous activities to their plate, including administering benefits, providing employee orientation and training, drafting and updating various policies, helping to ensure regulatory compliance, and keeping employee records. In some cases, they may oversee payroll.

That’s a lot of responsibility, and not every non-profit has the resources to do it all in-house. If your organization is understaffed and overworked, you might want to consider outsourcing HR.

Cost Factors In Outsourcing HR

Before you outsource, decide which HR segments to “farm out.” Look particularly at labor-intensive responsibilities, such as employee benefits and compliance requirements. Transferring some or all of them to the right outside party can take your organization to a higher level of professionalism and efficiency in those areas.

The move also might result in improvements. For example, an HR specialist firm is likely to have more tools, contacts, and time to find affordable health care insurance and retirement savings plans.

Indeed, the primary draw for most non-profits to outsource is reduced costs. So, you should perform a cost-benefit analysis (and your financial advisor can help). Even if the cost to outsource is more, you may decide that the extra dollars are worth freeing up staff hours for mission-critical initiatives.

Vetting Providers

Do your homework when considering providers. Ask candidates questions such as:

• How many comparable non-profit clients do you?
• Do you provide services on-site, off-site, or both?
• Who on your staff will we work with?
• What expectations do you have of us?

 
Also ask about rates (hourly, by the job, or on retainer) and billing procedures as well as references.

We Can Help

Contact us for more information on KPM’s Human Capital Solutions practice.