HR for Nonprofits: How an HCM Platform Can Resolve Common Challenges

HR manager holding a tablet while smiling at the camera

Human resource management is a vital part of any business, but it’s particularly significant in the nonprofit sector. Behavioral health and human services organizations and other nonprofits with social missions are not like most other businesses. Managing HR for nonprofits requires a unique skillset — and the right tools — to effectively manage employee relations, best serve the community, and stay within constrained budgets.

Because nonprofits rely on grants and various funding sources, they typically have tighter budgetary constraints than traditional for-profit businesses. This can make it challenging for nonprofits to recruit, hire, and retain top talent as they often cannot offer the same level of compensation as for-profit organizations. 

As a nonprofit HR professional, you need innovative solutions. Learn how to navigate the challenges of your field and how to streamline HR processes to improve outcomes for your organization and clients.

Maintaining Financial Sustainability With Limited Funding

HR for nonprofits: HR employee using a laptop

One of the top challenges when handling HR for nonprofits is maintaining financial sustainability while operating with limited funding. With various criteria attached to specific funding sources — and employees split between different programs and cost centers — keeping track of where and how each dollar is being spent can be incredibly challenging. (Not to mention making sure each program is sustainable.) 

HR departments play a key role in maintaining the financial sustainability of nonprofits, and using the right human capital management (HCM) platform can make a significant difference.

Accurate Budget Allocations

In this day and age, there’s no reason to be relying on manual processes for budget allocations. The right HR and payroll software can provide your nonprofit with the solution you’re looking for — but only if it’s designed to suit your operations and address your needs.

Most software caters to standard for-profit companies that don’t deal with the same challenges as nonprofits. As such, you need HR and payroll software specifically designed to address your budget allocation needs. 

With ContinuumCloud’s HCM and payroll platform, nonprofit employees can easily allocate their time to different cost centers or programs for more accurate budget tracking. The platform also automatically allocates time on a percentage basis for employees who regularly work across multiple areas.

Managing Labor Costs

Managing labor costs is another focus for nonprofit HR management professionals. Labor costs are often one of the biggest costs. This is especially true in behavioral health where staff members need advanced credentials and you cannot rely as heavily on volunteers to fill staffing gaps. 

It can also be tough for nonprofits to decide which positions to prioritize for hiring when balancing increased staffing needs and strained budgets. One tool that can address these challenges is a Position Control framework.

For instance, ContinuumCloud’s Position Control organizes your workforce by position rather than by employee, enabling better visibility and budgeting. This tool lets you compare budgeted versus actual costs and can prevent common problems like over-hiring. This position-first system can help your organization stay on top of its workforce by providing a clear and reliable view of your entire labor pool.

Robust Reporting

Since nonprofit organizations often rely on fundraising and donations, it’s crucial to maintain detailed data on how money is being spent to show donors that you’re using their contributions appropriately. As such, nonprofits must have comprehensive and easily accessible data to provide board members, donors, or other stakeholders with detailed reports to demonstrate financial responsibility and positive outcomes for the population they serve. 

It’s not enough to have piecemeal reports about individual programs or departments. You need to break through these information silos with robust reporting capabilities that draw data from multiple departments, cost centers, or funding sources. This gives you the big picture while also enabling you to drill down into whatever details you need. 

Compliance With State and Federal Laws

HR for nonprofits: HR manager looking at a computer

Compliance with state, federal, and local employment laws is an ongoing challenge that small businesses and large corporations face. Behavioral health and human services organizations are usually subject to more stringent requirements, particularly when it comes to taxes and credentialing.

Payroll and Tax Compliance

Automation is the key to maintaining payroll and tax compliance. ContinuumCloud’s HCM software can ease the burden of managing payroll and federal taxes by automatically calculating and deducting liens, employee wage garnishments, and taxes each payroll cycle. ContinuumCloud’s HCM also guides employers in completing IRS tax forms and required tax payments. 

Credential Compliance

Managing credentials is another area where automation can make a difference. Instead of manually tracking employee credentials, why not let your HR system do it for you? Some systems, such as ContinuumCloud’s HCM solution, allow for credentials to be tracked on their own, with automatic reminders sent out when credentials are approaching expiration or in need of renewal.

Hiring and Retention 

In the 2023 Behavioral Health Industry Trends Report, behavioral healthcare leaders and executive directors ranked recruiting as a top priority for their organizations. However, they also noted that it was a major challenge. Restrictive budgets and a demanding work environment can lead frontline staff to burnout and compassion fatigue. This makes it difficult for organizations to make headway with their recruiting initiatives or retention targets.


When it comes to recruiting, the problem is twofold: organizations struggle to offer competitive pay and benefits while recruiters cite a lack of qualified applicants. These may not be challenges that nonprofits can fix directly, but there are still opportunities to find solutions.

Candidates consistently report that they use their experience to determine how they would be treated as an employee. Therefore, ensuring a good candidate experience is essential for attracting talent to your organization. ContinuumCloud’s recruiting management tools can provide a more efficient and effective hiring process for all parties.


The onboarding stage is when employees naturally exhibit a high level of engagement, and organizations can help maintain that with a streamlined and structured onboarding process. This means minimizing paperwork and focusing on acclimating the new hire to the people, culture, and job responsibilities instead. 

One way to streamline the hiring process and cut back on paperwork is to use a digital onboarding solution. HR software can simplify tasks such as setting up new employee profiles, completing onboarding paperwork, enrolling in employee benefits, and enrolling employees in training courses. With a single unified platform, new employees can quickly view and complete pending onboarding tasks in an organized manner without having to remember different logins for various HR and payroll systems.


Going hand-in-hand with recruiting, retention is about keeping the talent already at your company. Some top retention strategies for behavioral health and human services include more communication and transparency and creating open door policies that enable and encourage employees to have a voice and provide their feedback. After all, no one is in a better position to tell you what your employees need more than the employees themselves.

Nonprofit HR teams can also boost retention by prioritizing and working to prevent employee burnout and promote work-life balance within the organization. Nonprofit employees are particularly at risk of burnout and compassion fatigue due to the industry’s strenuous and emotionally taxing nature. 

Nonprofit HR staff members can use ContinuumCloud’s HCM platform to track labor needs and hours in real-time to obtain actionable workforce management insights and identity when employees are being overworked or at risk of burnout. If the HR team sees that employees in a specific department or program are consistently accruing large amounts of overtime, they’ll know it’s time to look for extra help to support that team.

Employee Engagement and Satisfaction

HR for nonprofits: team having a meeting

High retention rates and an inclusive culture are also related to better employee engagement and satisfaction. Conversely, high turnover can be a sign of low engagement among your employees. There are several main strategies that nonprofits can use to help improve employee engagement and satisfaction.

Recognition Systems 

Providing consistent employee recognition is an HR best practice — and it can go a long way in improving morale among frontline staff. Moreover, it doesn’t cost a thing. 

But that also means it can be easy to overlook or ignore if recognition is not intentionally considered and shared. Having a system in place that makes it easy to shout-out employees or provide appropriate recognition can motivate team members and foster a greater sense of confidence and satisfaction. In fact, a study reported in the Harvard Business Review found that employees with managers who recognized them were “more than 40% more engaged than those with managers who were not.”

ContinuumCloud’s HCM solution offers several features designed to help employers provide more frequent recognition for high-performing team members. The platform facilitates more consistent manager recognition through convenient check-in tools and templated messaging. It also includes a built-in peer-to-peer employee recognition with the “Shout Outs” features that allows individuals to recognize their peers publicly.

Employee Benefits and Compensation Strategy

Providing the benefits your employees really want and need can certainly bolster employee satisfaction. This is particularly helpful in the nonprofit sector as small nonprofits typically cannot offer large salaries or frequent raises. 

However, offering key benefits like health insurance is only an effective employee satisfaction strategy if employees know that those benefits are available. ContinuumCloud’s HCM system provides a streamlined benefits administration process for employees, and makes it easy for employers to track enrollment and communicate benefits offerings to eligible employees. 

Talent Management

On a more individual level, talent management has to do with setting goals and ensuring that employees can meet them. This means providing the tools, resources, and time for them to do their jobs to the best of their abilities. 

Along with tasks for their existing role, many employees want training and ongoing development opportunities for their personal and professional growth. In fact, the APA’s 2023 Work in America study found that 91% of employees feel it’s important to have a job with consistent opportunities to learn.

Nonprofit HR professionals can utilize tools like ContinuumCloud’s HCM platform to support common talent management activities like conducting performance reviews, managing employee goal-setting, assigning training, and providing regular feedback. With streamlined communication tools, templated feedback messages, and transparent goal tracking, you can improve performance management and support employees in their professional growth.

Centrality of the Organization’s Mission

Tying all of these nonprofit HR solutions together should be an organizational mission that serves to unify your workforce and provide a clear sense of purpose. All organizations should centralize their mission in all of their key activities, but it’s especially paramount when managing HR for nonprofits.

Developing a Clear Mission Statement

Identifying and succinctly stating your organization’s mission statement can help make it clear and easy to remember for your entire workforce. Everything about the organization begins and ends with its mission, and a mission statement can tie that all together.

Promoting Diversity and Inclusion

Diversity and inclusion are essential for building a great company culture — one that makes your workforce proud to be part of your organization and also helps attract top talent to join. Ideally, diversity and inclusion is incorporated into the organization’s mission, vision, and values.

Communicating Your Mission to Employees

Once you’ve created a clear and compelling mission statement, it’s important to reinforce your focus on that mission regularly with team members. Nonprofit employees want to feel a sense of purpose in their work. They want to know their contributions help clients or the community as a whole, even if their role is not client-facing.

This is something to work into performance management discussions and employee recognition. HR teams can also use company-wide messaging tools, like ContinuumCloud’s Company News feature, to share organization milestones, announcements, and messaging that supports the nonprofit’s mission and core values.

Simplify HR for Nonprofits With ContinuumCloud

ContinuumCloud’s HCM platform is a unified solution that can simplify nonprofit human resources while supporting your organization’s mission. The platform was built specifically with HR for nonprofits in mind, particularly behavioral health and human services nonprofits. From managing day-to-day HR functions to supporting long-term organizational strategies, ContinuumCloud’s HCM can help with all of your HR needs in one centralized platform.

Get in touch to learn more about how your organization can streamline its HR processes today.

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