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For many nonprofits outsourcing human resources is a smart move. Outsourcing human resources can free up time for staff to spend more time on mission-driven programs and the core duties of the organization.
The first step to outsourcing is to decide which parts of HR to redistribute. Payroll, recruiting, training, benefits planning and administration, compliance monitoring, leave management, and performance reviews are HR tasks that could be farmed out. Each of these responsibilities is labor intensive, and expertise is essential. Transferring all or some of these tasks to an outside party can aid your organization in meeting the highest standards of efficiency and professionalism.
The next step is performing a cost-benefit analysis. The cost is likely more to outsource, but it could pay off in freeing up hours for staff to work on other projects.
There are drawbacks to consider when outsourcing HR. Some tasks could require an intimate understanding of the organization’s history and culture. Also, consider the impact of letting go of current HR staff.
Things to Consider
Before outsourcing ensure that your nonprofit’s staff and board of directors buy-in. The Nonprofit Coordinating Committee of New York suggests asking the following questions of potential HR service providers:
- What is the scope of your service?
- How long have you been in business?
- Where are services typically provided?: on-site, off-site, or a combination?
- How many nonprofit clients do you have in our area, sector, and size?
- How do you charge for services – hourly or retainer?
- Whom will we be directly working with?
- What will you expect of our organization, including the board and staff?
Once you have met with outside service providers and selected one, consult your attorney to review the contract. Before making the switch be sure that controls are in place to monitor the quality of your new HR arrangement. We can assist you in this process. Contact us at 818-334-8623 or click here, and we will contact you.