8 must-have features in HR software for nonprofits

Fact: effective HR software for nonprofits has become vital rather than optional. By streamlining management and payroll tasks, reducing costs, and ensuring compliance, HR software allows essential organizations to allocate more resources to their core mandates. And that—let’s face it—is what it’s all about. 

Nonprofits are under ever-increasing pressure to manage a massive range of HR tasks with little to no support. Whether it’s designing new ways of working remotely or tackling compliance issues, HR challenges are far too numerous to count. 

Maybe that’s why as many as 60% of nonprofit leaders report feeling “used up” at the end of the workday. The nonprofit sector is experiencing turnover rates of 19%, much higher than the industry average of 12%. Of course, high turnover only adds additional costs to already stretched HR budgets.  

It goes without saying that this endemic labour shortage is also having a direct impact on the communities served by nonprofits. When nonprofits go under, the effects ripple throughout communities and people lose access to invaluable resources like food, shelter, and mental and physical health services. 

Still, HR software that addresses all the needs of a given nonprofit organization can be difficult. In part, this is because most software is designed for traditional, revenue-oriented corporations. Ultimately, the best way to find the right HR software for your organization is to determine what features you’ll need to operate efficiently. 

Essential features of HR software for nonprofits 

The key features of HR software for nonprofits should cater to the unique requirements and challenges nonprofits face on a regular basis.  

The following features should be considered essential: 

1. Recruitment and applicant tracking:

Your software of choice should offer tools for posting job openings, accepting applications, and tracking candidates throughout the recruitment and onboarding process. Why? Because all of the above facilitate cost-effective and efficient hiring. Additionally, given the volunteer-oriented nature of many non-profits, software should be capable of handling both volunteer and staff hiring needs.  

2. Payroll and benefits administration:

HR software for nonprofits should have stellar payroll processing capabilities. It should also be a great help with navigating tax deductions and administering employee benefits. The ability to manage your finances effectively, pay your staff on time, and provide attractive benefits packages goes a long way toward attracting and retaining talent. And top talent, as we all know, is integral to success in a competitive job market. 

3. Time and attendance tracking:

Nonprofits often deal with flexible schedules, part-time employees, and volunteers, which makes accurate tracking crucial. Well-suited HR software facilitates the tracking of work hours, attendance, and PTO for a diversity of employee types. 

4. Performance management:

Because nonprofit work is often mission-driven, employee performance and development need to be continually improved. To this end, HR software must facilitate setting objectives, conducting regular appraisals, tracking progress, providing feedback, and recognizing employee achievements. All while aligning with an organization’s goals and values, of course.

5. Employee self-service:

An employee self-service portal worth its salt empowers employees. How? By allowing them to access and update personal information, view pay stubs, request time off, and manage benefits. The result is fewer administrative burdens and enhanced employee engagement and satisfaction. Oh, and a reduced HR workload, which means more time freed up for big-picture tasks. 

6. Compliance and reporting:

Nonprofits are often held to different regulations and standards than for-profit entities. As a result, features for ensuring compliance with labor laws, tax regulations, and grant requirements are key. So are comprehensive reporting capabilities that help maintain transparency and accountability. The right HR software will offer tools that help with maintaining records, monitoring any changes in labor laws, and generating reports. 

7. Training and development:

Given the heavy focus nonprofits place on training and development, adequate tools for planning and delivering professional development initiatives is everything. Worthwhile HR software for nonprofits should include a comprehensive learning management system (LMS) that can handle everything from training enrollment to the delivery of online development resources. 

8. Customization:

The reality is that nonprofits often have distinct HR requirements, and the ability to adapt HR software to these unique needs, policies, and workflows is integral. Customization features empower your organization to address needs effectively and promote operational efficiency. This, in turn, ensures alignment with your specific mission, values, and workplace culture. 

Budget considerations for nonprofits

In the quest for HR software, nonprofits should carefully consider their budget constraints.   

The cost of HR software can vary widely depending on its features, number of users, and other factors. Striking a balance between affordability and value is important when making your choice.  

In the process of determining which software is best suited to your organization’s needs, it can be helpful to consider the following factors:  

• Transparent pricing. Look for solutions with upfront pricing structures—ones that offer plans specifically tailored to nonprofits. 
• Long-term costs. Be sure to evaluate long-term costs like subscription fees, maintenance, and potential customization.  
• Cost-effectiveness. Factor in costs associated with staff training, data migration, and ongoing support to ensure that the software stays cost-effective over time. 

If you’d like to go one further, try calculating the ROI of your HR software by identifying and quantifying the benefits it provides. These might include time saved in HR processes, a reduction in compliance violations, or a decrease in employee turnover thanks to better performance management. 

At the end of the day, selecting the right HR software for your nonprofit organization is a critical decision. It impacts your organization’s ability to manage personnel efficiently and focus on its mandate. Careful consideration of features, customization options, and budget limitations is the best way to ensure that your chosen software aligns with your unique needs. In turn, landing on the right software solution is sure to advance both operational effectiveness and the pursuit of your organization’s goals. 

Not sure where to begin? Consider PurelyHR. Tailored to helping nonprofits manage HR efficiently, it offers a user-friendly interface, comprehensive features, and cost-effective pricing—for starters. 

At PurelyHR, we offer all nonprofits a discount of 15%, and plans start at less than $5/month. Not ready to commit? Try us on for size with a 21-day free trial.