Human resources generally encompass both the structured and more informal interactions between an employer and employees. This includes, but is not limited to, hiring, compensation, training, and maintaining organizational culture. All organizations, for-profit and nonprofit, need concrete human resources policies and goals in order to achieve long-term, sustainable success.
However, the human resources needs of nonprofit organizations are often subject to additional pressures. Nonprofits simply have more unique demands when it comes to HR strategy and management. HR professionals at nonprofits must adhere to and balance a number of different factors to make the best decisions for their organizations:
- State and federal employment laws — Nonprofits aren’t exempt!
- Nonprofit-specific tax, accounting, executive compensation, and employee classification needs
- Tight or unpredictable budgets
- Heavily mission-driven goals
Here at Astron Solutions, we understand these unique challenges that nonprofits face, especially when it involves tight budgets. During times of crisis and instability like now, it’s not uncommon for nonprofits of all sizes to rethink and optimize their HR strategies.
After conducting our recent Pulse Survey on the effects of COVID-19 on employers, it’s clear that compensation programs have already been challenged across sectors. Therefore, a fully fleshed out HR and compensation strategy is crucial to maintain employee engagement and keep retention rates up.
Many organizations look for the help of an outside expert when it’s time to build out or refresh their approach to human resources. Even for larger, more established nonprofits, an outside perspective is almost always the best choice. Choosing and hiring a nonprofit human resources consultant, though, can be tricky (especially if you’ve never done it before). In this guide we’ll walk through all the essentials you’ll need to know to get started, including:
- Why Nonprofits Hire HR Consultants
- Nonprofit HR Consultant Services
- How to Hire a Nonprofit HR Consultant
- What to Look For in a Nonprofit Human Resources Consultant
- Best Practices for Working with a Nonprofit HR Consultant
Use the list above to jump to a specific section, or follow along with us from the top. You’ll be ready to start researching potential human resources partners in no time!
1. Why Nonprofits Hire Consultants
There are a number of reasons why a nonprofit organization might decide that it’s time to seek outside human resources guidance. Some of the most common reasons include the following:
- The organization is going through a transitional period. Times of quick growth or changes in leadership are typical examples. These periods are great opportunities for organizations to make any important changes or updates to their human resources structures that they might have been putting off.
- The nonprofit is experiencing retention or recruitment issues. Nonprofits experience these issues like any other type of organization, and HR often represents the first line of defense for combatting turnover and developing stronger, more holistic compensation strategies.
- The organization simply needs to build out its first set of human resources processes. As mission-driven organizations with fairly tight budgets, growing nonprofits often postpone developing concrete human resources policies, processes, and departments until they’ve been up and running for a while.
- Outside forces (like a global pandemic or mass social movements) begin to affect the nonprofit’s internal operations and leave them unsure of next steps. There will always be situations and events that are outside of an organization’s control. Revisiting and improving their current HR strategy is a great way to keep employees engaged and motivated during times of instability.
Of course, the exact reason an organization decides to hire a nonprofit human resources consultant will vary. However, all of the situations listed above have one thing in common: the organizations want or need more stable foundations on which to grow.
Well-developed and properly-scaled human resources programs will strengthen your organization’s ability to grow sustainably. An outside expert is in a great position to help determine which strategies will be most effective in the long-run.
2. Nonprofit HR Consultant Services
If you’ve never worked with a consultant before or if you’re trying to build out your organization’s first HR policies, it can be tricky to know what to look for without understanding the field more generally. For some additional context, let’s cover the types of services that nonprofit human resources consultants typically provide.
So what does an HR consultant do? Their services can span a fairly broad range, including the following:
- Evaluating or auditing your existing human resources structures and policies
- Retention-focused strategy development to help you retain more of your key talent
- General compensation consulting and role-specific strategy development
- Incentive program design to encourage project-specific and long-term employee engagement
- Employee communication support, including survey design and administration
- Performance management guidance or training, or management software support
- Work-from-home program guidelines and support
- HR support during economic and social challenges
- COVID-19-related compliance and strategy support
Your organization will likely have one or two specific goals in mind when searching for a human resources consultant. Candidates with general experience in HR consulting might do the trick for more general projects, but always make sure to ask about their experience as it relates to your particular needs and the general social climate, too.
Remember, a human resources consultant is not an appropriate replacement or filler for a dedicated, in-house HR team. Many consultants don’t offer the types of services that these teams would perform, like payroll administration. However, consultants are strong partners for helping you to develop and train a well-equipped HR team. For further research, explore this list of human resources consulting firms to learn more common specializations and how each one might help your growing nonprofit.
3. How To Hire a Nonprofit HR Consultant
Next, let’s walk through the basic steps you’ll need to follow to hire an HR consultant for your own organization:
1. Examine your own goals and needs.
Think about why you need a human resources consultant and what you need or want to accomplish by working with one. Chances are your reasons will fit into one of the general situations listed above, but your exact goals will probably be a bit more varied.
Clearly defining your goals and needs (or at least having a clear sense of what you need to accomplish) will go a long way to both help you find the perfect partner and streamline their job later on.
2. Meet with your nonprofit’s board and outline key guidelines.
In order to get started hiring an HR consultant, you need to ensure your leadership is on the same page. Make sure you discuss the plan with all board members to ensure everyone aligns on the need to hire a consultant and your goals for working with one. This way, there’s no confusion, time wasted, or future pushback.
When you meet with your board members, this is also a good time to outline some key guidelines to follow in your search for an HR consultant. This should include a general budget or maximum cost you will pay, a target start date for services, and a general timeframe for the entire engagement. With these guidelines laid out, you can focus your research more accordingly.
3. Build a hiring team.
Getting multiple perspectives on potential HR consultants will help ensure you find the best fit. Many organizations create hiring teams or committees to focus more directly on this effort. Hiring teams also are useful for delegating tasks, like who should research candidates and who should review proposals.
Your team should consist of leaders in your organization plus any staff members that will be working directly with the consultant, like existing HR staff. If your consultant is helping you build your organization’s first human resources department, a key staff member who will lead future HR tasks should be included.
4. Conduct some preliminary research.
Start searching online for top nonprofit consultants. There are plenty of useful resources out there that break out top consultants and their specialties (like our own guide to compensation consultants). Most human resources consultants don’t necessarily specialize in working with nonprofits, so determine in advance if you’d want a partner with experience primarily in the nonprofit sector.
Don’t forget to reach out to your colleagues and contacts in other organizations, too. If you know another organization worked with a nonprofit human resources consultant, ask them about their experience. They’ll most likely have recommendations and insights to share.
5. Draft your nonprofit’s RFP.
With your hiring team, work on drafting a request for proposal for a human resources consultant. An RFP is important in order to effectively communicate your organization’s exact HR needs and goals. This way, you can ask each HR consultant candidate for their proposal in an easy to digest and fully standardized format.
Your RFP will depend on your organization’s unique situation, but there are a few common points that are crucial to include. In order to yield the best results, consider the following elements:
RFP Template for Hiring a Nonprofit Consultant
- A description of your organization, including your history, mission, and donor audience
- A description of your HR needs, including the specific services you’re looking for
- The guidelines that you and your nonprofit board laid out earlier
- The expected outcomes for the engagement, including a list of concrete deliverables
- Any questions or requests you have for information, background, and approach of the HR consultant or consultant team
- Any additional information as needed
Basically, your RFP is a concise representation of your entire HR needs to all of your consultant candidates. The more focused and direct your RFP is, the better and more useful your proposals will be.
6. Reach out to your top candidates.
Once you and your team have narrowed down a shortlist of candidates, reach out to the top two or three. Start by introducing your organization, requesting more information on their services, and asking for references. If you want a proposal, send out the RFP that you’ve already written. Once the consultants complete and present their proposals, you can begin narrowing down your choices even further.
While not specifically about nonprofit human resources consultants, this guide to hiring a fundraising consultant includes useful explanations of what to look for in consultants’ proposals and how to rework them as needed.
7. Make your pick and get started!
Once you’ve reviewed the proposals that your organization received from candidates, it’s time to make your pick. Work with your team to settle on your favorite candidate, then notify them of your decision. You’ll most likely then need to finalize their proposed plan, agree on some logistics, and sign a contract.
Remember, any consultant should serve as a partner for your organization, not simply an outside expert who’ll come in, fix your problems, and leave. In order to make the most of your engagement, your organization should prepare any and all questions and learn from your consultant’s insights.
4. What to Look For in a Nonprofit Human Resources Consultant
There are a few key characteristics to look for in any potential nonprofit human resources consultant for your organization. These might be fairly self-evident, but it’s still important that your team is aware of them. A strong proposal from a candidate is great, but unless you can see your team successfully working with them, that partnership might not be the best choice.
Here are some top things to consider in your HR consultant:
- Experience working on projects similar to your own, and with nonprofits similar to your own, ideally in terms of both mission and size. This helps ensure that the consultant fully understands your particular circumstance and unique pressures.
- How they describe their methods or general approach when you reach out to discuss their services and your project. As with practically any important project or initiative, a flexible and individualized approach is always more effective than a one-size-fits-all solution.
- Strong communication efforts, including quick responses to your questions and thorough explanations of key concepts.
After screening for these key characteristics, look for positive reviews online, or, better yet, reach out directly to their past clients for references. This is a great way to get a sense of how the consultant works in action. Make sure that the consultant’s work had a lasting impact on the performance of their previous clients’ human resources programs, not just a one-time fix that shortly wore off.
5. Best Practices for Working with a Nonprofit HR Consultant
After you’ve picked your nonprofit HR consultant, it’s time to start working together. However, in order to go forward, it’s important to ensure you have a firm understanding of what strong nonprofit HR looks like. This is especially crucial if you’re a smaller organization without a current human resources department or well-defined policies.
Once you have a foundation of what strong nonprofit HR looks like, you can then determine how to best work with your nonprofit HR consultant. To understand both of these processes, we’ll be reviewing the following best practices:
Nonprofit HR Best Practices
- Take a mission-driven, project-oriented approach. A nonprofit’s priorities are shaped by its overarching mission, but its strategies will vary greatly from one campaign to the next. Nonprofit HR should be guided by the core mission but be able to adapt to changing projects.
- Make communication a top priority. Even more so than in a for-profit business, communication is key in a nonprofit. The unique pressures of the nonprofit sector and the campaign-by-campaign approach means everyone will perform better when they’re on the same page.
- Develop strategies for managing unpaid staff. Nonprofits rely on dedicated volunteers for all kinds of essential tasks, and they require clear management in order to effectively support your goals, just like paid staff members do. A well-organized volunteer program will include human resources elements.
- Take an assertive approach to recruitment. Recruiting top talent is hard work, especially for positions in nonprofit organizations. Don’t be afraid to take a strategic and assertive approach to recruit new staff members. Study up on the Total Rewards concept of nonprofit compensation to learn more.
- Try to anticipate changes and hardships. Tight budgets, leadership changes, and shifts in funding sources can all throw a wrench into your organization’s strategies. Human resources should plan ahead by developing executive succession and emergency fundraising plans, for instance.
As you examine your own HR goals and needs and prepare to hire a nonprofit human resources consultant, keep these best practices in mind. You and your consultant should be on the same page about how to best prioritize and approach nonprofit human resources tasks and responsibilities.
Preparing to Work with a Nonprofit HR Consultant
- HR consultants should act as a partner to your organization. Make sure your consultants take the time to get to know your organization and genuinely understand your mission and audience. This way, they have all the context they need to finalize their HR strategy recommendations.
- Your team should understand the purpose and scope of any changes you implement with your consultant. Members of your staff might not be familiar with the full scope of nonprofit HR and its responsibilities, so clearly communicate new developments across your organization.
- Ask for documentation and training whenever you need it. When you partner with an HR consultant, you’re working to improve your HR strategy for the present and as your organization grows. Make sure you have everything you need to ensure long term success before your engagement with the consultant officially ends. Having documentation and training materials from the HR consultant can help you better communicate new processes with the rest of your organization and act as resources if you come into any new issues.
Partnering with a nonprofit human resources consultant can do great things for your organization, but make sure that your organization is ready to make the most of the engagement. This way, you avoid any confusion or wasted time. Following the best practices above can help keep you on the right track and ensure success for your nonprofit HR strategies.
Strong strategy and management of human resources underpin all successful organizations, both for-profit and nonprofit. With the unique pressures of the nonprofit sector, though, it’s crucially important that these organizations get it right. An expert guide is often the best bet for building out or correcting strong HR policies and structures that will support sustainable growth.
Hiring a nonprofit human resources consultant can be a game changer for the organizations that are ready for their services. Take your time conducting your research, and you’ll be sure to find the perfect partner. Keep exploring with a few additional resources:
- Compensation Consulting Firms: 12 Top Picks for Any Sector. Strong compensation strategy should be a foundation for your larger recruitment and retention goals. Explore the different services offered by some top experts in the field.
- DNL OmniMedia’s Guide to Creating a Nonprofit Technology Plan. For more tech-heavy projects, like major CRM updates or overhauls, a new tech plan might be your best bet. Learn from these leading nonprofit tech consultants.
- HR Functions and Outsourcing. Human resources departments are increasingly outsourcing some of their more tedious tasks to third parties and tech solutions. There are a number of different ways nonprofits might do this, so explore your options if you think this might be a good move for you.