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A Nonprofit's Guide to Benefits

Human Resource Requirements for Nonprofit Organizations

Nonprofit HR Requirements

Just like larger organizations, small nonprofits face human resources (HR) challenges that come along with hiring the right team, creating a positive organizational culture, and complying with ever-changing laws and regulations.

This section outlines five best practices for getting an HR program up and running.

1. Know, Understand, and Follow HR Regulations and Law

From the very first day an employee is hired, there are HR laws and regulations covering everything from payroll, employee discrimination and harassment to termination.

2. Keep HR Files Organized and Confidential

It’s important to keep employee files organized and confidential. Ideally there should be two files for each employee: a personnel file and a confidential file.

Items to include in the personnel file are things like the employee’s resume and original job application, salary records, transfers, job evaluations, and any disciplinary actions.

Items to include in the confidential file are medical records, leave requests, I-9 forms, payroll records, and reference checks.

3. Make Payroll on Time

It may sound like a given to stay up to date and timely with payroll, but many small nonprofits struggle to make payroll on time because of time constraints or disorganization. Stay organized with payroll systems and make sure to hand out paychecks on a consistent basis, at the same time each period. Timesheets can help keep track of vacations and sick time, and there are several online management programs that help small businesses stay organized, and be prepared for tax-time.

4. Create an Employee Manual

An employee manual explains a nonprofit’s policies and procedures and communicates expectations to employees. It also helps protect the organization in the event of a dispute.

5. Lay the Foundation for Being an "Employer of Choice"

Being an "Employer of Choice" means that candidates are eager to work for the organization, that people look up to current employees, that the organization receives unsolicited resumes, and that the most talented employees stay with the organization throughout their careers. It's a coveted status. It signals the nonprofit’s brand is top-notch. And, when a brand is reputable, it's much less expensive to recruit and retain key employees.

Any nonprofit can become an Employer of Choice. It's not just reserved for the big organizations and companies. In fact, where small nonprofits may lack resources, they make up by having a unique, tight-knit, and "I can make a difference here" culture.

Ways small nonprofits can build a unique culture is to focus on the nonprofit’s mission, recruiting and hiring, offering the right benefits, providing challenging and interesting work with opportunity for advancement, and recognizing employees.

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