In research conducted in late 2011, 501 Commons sought to define the need for contracted Human Resources support within the nonprofit community. 168 survey respondents, 18 interviewees, and 1 focus group offered feedback on this issue. There is a demonstrated need for professional HR support in both a short-term and ongoing capacity, although organizations reported a stronger initial need for short-term support. Click here to download the full report.

Most nonprofits reported having some formal HR practices in place (employee handbook, personnel policies, etc), but only 23% of respondents report feeling “very confident” that their materials are up to date. Furthermore, 57% of people who manage HR within these organizations have no formal training in Human Resources management; instead, they learned on the job.

In addition to policy issues, our findings pinpoint other primary areas of concern: personality conflicts at work (64% of respondents are challenged by this) and separation from employment, whether due to layoff (55%) or termination (71%). More than half of organizations are looking to update employee policies and procedures, evaluate compensation, or even restructure job responsibilities in the near future.

This research indicates that organizations willing to contract for ongoing HR services are most likely to be in the budget category of $500,000 to $2 million, although survey respondents in all budget categories expressed an interest in short-term HR support. Generally, those with budgets below $500,000 are looking for assistance in developing basic systems such as HR policies, while those with larger budgets are interested in services like specialized internal training to augment staff resources.

One interviewee said, “I would definitely turn to this program for additional HR help or expertise. We need help dealing with challenges, and this is an awesome plan.”

75% of respondents expressed an interest in learning about contracted HR support, and the top cited reason was “because of the risk in HR, I would feel more secure if I had access to an HR professional.” Nonprofit managers seemed to report feeling that they can handle HR management day-to-day when operations are running smoothly, but they recognized the benefits of specialized support in policy review/creation, performance management, compensation & benefits, training, termination, and regulatory compliance. For one survey respondent, the extensive range of potential HR support made all the difference: “We don’t have the budget to bring on an HR person; this will be so helpful.”

Based on the reported needs, the Human Resources Program from 501 Commons will be offered through both short-term contracting and ongoing services. Short-term services would include reviewing and updating policies or compensation structures, whereas ongoing services can contribute to an organization’s ability to handle the cycle of human resources: recruiting, hiring, training, performance management, professional development, and separation from employment.