If you’ve only ever worked in the private sector, you may be under the misconception that volunteers largely staff nonprofit organizations. But most nonprofits employ skilled staff to manage operations, handle administrative functions, and help the nonprofit fulfill its mission. Many nonprofits have staffing structures very similar to businesses. Well-established nonprofits may be overseen by a CEO, have departments ranging from accounting to marketing, and employ workers with similar titles and credentials to their private-sector counterparts.
But like their private sector counterparts, nonprofits often need support in specific functional areas. Nonprofits may employ lean staff levels because they have had difficulties raising the funding to hire more staff. Some nonprofit missions require them to cap administrative expenses at a specific level, making additional hiring impossible. It’s not uncommon to find nonprofits with only a couple or a single dedicated HR person. And in some cases, a nonprofit may lack HR staff entirely, with managers in related functions sharing HR responsibilities as needed.
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PEOs can play a vital role in filling the HR personnel gap many nonprofits face. Not only can a PEO help a nonprofit provide their employees with the full suite of HR services that most employees expect from their employers, but they can also help companies offer and manage competitive healthcare plans and benefits.
The Services Employees Expect
No matter what background information a job applicant may have read, many new hires come in expecting a full range of services from HR, including self-service portals, training opportunities, nonprofit-sponsored employee social gatherings, and more. But when nonprofits have limited HR staffers handling human resources and other organizational functions like payroll, it may be a struggle just to get leave summaries updated regularly.
PEOs lend nonprofits their expert staff and access to their human resources information systems (HRIS) to free up in-house HR staff from common, time-consuming tasks. When PEO staff are helping make sure the checks get out on time, or that retiring employees are offboarded properly, for example, in-house staff can focus on organization-wide initiatives. And when employees can access a PEO-established employee self-service (ESS) portal to handle routine requests (rather than deluging HR with them), HR can leverage their limited time and capacity far more effectively on behalf of the nonprofit.
The Benefits Employees Deserve
If you’re a private or public sector organization with fewer than 50 employees, you’re not obligated to offer your employees healthcare benefits, as per the Affordable Care Act. And whether private or public sector, not offering health insurance to employees can hurt an organization’s workforce morale and productivity, recruitment efforts, and reputation.
If a nonprofit does not offer health coverage, employees must scramble to secure their own, often more limited, coverage which can have downstream effects on productivity. Consider an employee who can only afford limited healthcare coverage. If they have a medical emergency requiring costly treatment, they will not only be trying to recover, but also face added financial stress. This can lengthen the employee’s absence from work and possibly contribute to poor performance when they return.
Nonprofit employees often sacrifice potentially higher salaries in the private sector in exchange for satisfying work, stable employment, and solid benefits packages. If a nonprofit employer doesn’t offer healthcare or other common employee benefits, they cannot attract or retain the best and brightest applicants.
Fortunately, PEOs provide a solution to the challenge of how to offer great employee benefits for small nonprofits. Because PEOs work with multiple clients, they can leverage their purchasing power to secure better benefit rates from a broader range of providers. Nonprofits can pay less for healthcare insurance, workers’ compensation, and more, allowing them to offer attractive benefits packages to existing staff and prospective applicants. And because PEOs handle benefits management, overburdened in-house HR staff won’t need to deal with extensive benefits administration work, such as carrier negotiations, managing open enrollment periods, and ensuring legal and regulatory compliance requirements are met.
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A Streamlined Benefits Process
When offering benefits, small nonprofit HR departments may have difficulty sorting through and evaluating all of the alternatives. Further, if they don’t have large staff rosters, they may not be able to obtain benefit coverage at competitive prices. They may be forced to piece together various options from different vendors, which can become quite a headache to manage.
For example, a nonprofit might have a benefits provider that offers two inexpensive healthcare insurance plans, a second benefits provider that offers life insurance coverage, and a third that provides dental and vision coverage. Having three separate benefits providers increases the amount of administrative work HR must perform. If not managed properly, multiple providers can create confusion for employees as well.
A PEO provides a one-stop shop for employees and HR for benefits. The PEO manages carrier relationships and negotiations and makes all options available to clients and their employees through an ESS portal. And the PEO can help provide employees with the appropriate information about each benefit option so that employees can make the right decision for themselves and their families.
A Better Solution
Nonprofits that partner with PEOs receive the extra support they need to turn lean HR departments into full-service shops that provide their employees with the services they expect and the benefits they deserve. PEO staff leverage their expertise, technological resources, and manpower to manage, streamline and automate tedious administrative tasks so that in-house staff can focus their attention on training and professional development, policy management, employee performance management, and other key HR initiatives.
PEO staff will not only help provide operational support but also can help nonprofits secure the benefits packages nonprofits need. Working with a PEO can give nonprofit employees more benefit options and better benefits coverage. You can learn more about the benefits of working with a PEO here.
