Overcoming HR Challenges in a Nonprofit: A Strategic Guide

Nonprofit organizations are feeling the pinch — staff turnover is high, succession plans are unclear, and funding is uncertain.

Stepping into the fray are HR departments. Their task? Foster a workplace culture that keeps passionate talent onboard, driving impact on a tight budget.

As the saying goes, every challenge is an opportunity. And the myriad issues facing nonprofit HR  truly are an opportunity for leaders in the field to have a powerful impact on their organization and its mission.

Here are 17 action steps you can take to address five of the most pressing nonprofit HR issues in 2024, from offering wellness programs to making your recruiting more inclusive.  

Funding Uncertainties

The Challenge

Nonprofit organizations have been facing significant funding challenges, especially as a result of inflation. Given that government grants are not indexed with inflation and most nonprofits report donations are flat year-over-year, healthy funding streams are a critical issue for any nonprofit leader.

The Strategic Actions

• Diversify Funding Sources: To stabilize finances, nonprofits should explore a mix of donations, grants, corporate sponsorships, and other funding avenues. This diversification can help cushion against financial volatility.
• Enhance Donor Engagement: Utilize technology to streamline operations and create engaging donor experiences. This can help in attracting and retaining donors, a critical component in maintaining steady funding.
• Cost-effective Partnerships: Form alliances with other organizations or businesses to share resources and reduce costs, thereby maximizing the impact of available funds.

Addressing Staff Turnover

The Challenge

Staff turnover remains a top challenge for nonprofits: Three out of four nonprofits report they have job vacancies right now. 

The Strategic Actions

• Emphasize Non-Monetary Benefits: Highlighting the intrinsic rewards of nonprofit work, such as the impact on communities and the opportunity to make a difference, can attract and retain employees who are motivated by more than just financial compensation.
• Offer a Wellbeing Program: Wellness is critical to talent retention — 87% of employees would consider leaving a company that does not support employee wellbeing. Giving your employees access to a holistic platform that lets them move, eat, sleep, and feel well shows you value them.
• Invest in Employee Development: Providing opportunities for professional growth and development can enhance job satisfaction and loyalty among staff.

Succession Planning

The Challenge

Many nonprofits are facing a leadership vacuum due to retirements and pandemic-related exits for which they are unprepared: Only 27% of respondents during Plante Moran’s 2023 Nonprofit Summit said they were aware of a succession plan for their organization’s leadership positions.

The Strategic Actions

• Develop Internal Talent Pipelines: Cultivate potential leaders from within the organization through an intentional succession plan that involves mentorship and leadership training.
• Proactive Succession Strategies: Implement a succession plan that identifies potential future leaders and prepares them for eventual management roles.
• Inclusive Leadership Recruitment: Broaden the search for new leaders to include diverse candidates who can bring fresh perspectives and ideas to the organization.

Volunteers

The Challenge

Nonprofits often rely heavily on volunteers. Integrating these individuals effectively into the organizational culture is an HR responsibility that cannot be overlooked. Clear communication, proper training, and recognition programs for volunteers can ensure they remain motivated and aligned with the nonprofit's goals.

The Strategic Actions

• Structured Volunteer Onboarding: A robust onboarding process is key to helping volunteers understand their roles and the organization's mission.
• Recognition and Reward Systems: Recognizing and rewarding people can significantly enhance their engagement and satisfaction, helping you have a stable volunteer pool.
• Regular Training and Development: Ongoing training opportunities for volunteers ensure they remain up-to-date and invested in the organization’s goals.

Diversity, Equity, and Inclusion (DEI)

The Challenge

DEI is crucial in the nonprofit sector, which often serves diverse communities — yet over half of full-time NGO employees are white. HR departments need actionable tactics to increase diversity in their organizations.

The Strategic Actions

• Inclusive Recruitment Strategies: Developing inclusive recruitment processes – such as partnering with professional groups for people with a shared identity – supports diversifying your talent pool. 
• DEI Training and Awareness Programs: Regular DEI training and awareness sessions educate staff and volunteers on inclusivity and diversity can make your culture more welcoming. 
• Community Engagement and Feedback: Actively engaging with the communities you serve and seeking their feedback on your organization's DEI efforts can further enrich and guide your initiatives. This could involve creating advisory boards that include community members, conducting surveys to gather input on how your organization can better meet the needs of diverse populations, and hosting community forums to discuss DEI progress and challenges.

Fostering Employee Wellbeing in the Nonprofit Sector

The Challenge

Half of nonprofits say their shortages are driven by stress and burnout. Such chronic levels of low wellbeing degrade productivity and drive turnover, making workforce wellness a critical aspect of nonprofit success.

The Strategic Actions

• Comprehensive Wellbeing Programs: Implement programs that address mental and emotional wellbeing, work-life wellness, and physical health.
• Supportive Work Environment: Create a culture that values employee wellbeing, with supportive management and access to mental health resources.
• Flexible Work Arrangements: To the extent possible, offer flexible scheduling and remote work options to accommodate diverse needs and lifestyles.

Make the Most of Your Budget

Every dollar counts. Whether it comes from a foundation or a donation, you want to maximize the impact of every cent available.

Wellness programs help you do just that. Employee wellbeing initiatives can reduce turnover and increase productivity. There’s a reason nine out of 10 organizations that track the impact of their wellness spending see a positive return! This can free up funds for you to spend on your core mission.

Let Wellhub help you reap the rewards of wellness. Speak with a wellbeing specialist today!

References:

• ASAE. (2023). Four Trends That Will Affect Nonprofits in 2023. Retrieved from https://www.asaecenter
• Wellhub. (2023, October 18). The State of Work-Life Wellness 2024. /en-us/resources/research/work-life-wellness-report-2024/
• Plante Moran. (2023). The top five challenges for nonprofits in 2023. Retrieved from https://www.plantemoran.com
• National Council of Nonprofits. (2023). 2023 Nonprofit Workforce Survey Results. Retrieved from https://www.councilofnonprofits.org/reports/2023-nonprofit-workforce-survey-results
• Statista. (2023, December 19). U.S. nonprofit full-time staff 2023, by race and ethnicity. https://www.statista.com/statistics/1374592/nonprofit-full-time-staff-race-ethnicity-us/