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3 HR Challenges Facing Nonprofits in 2015

Every business will face its fair share of challenges, whether from stiff competition, government regulations, economic downturns or HR issues. The truth is that challenges are the stuff of life; overcoming them is what makes people and companies great. But for nonprofit organizations, the impact of tribulations can be amplified by restricted budgets and a smaller workforce. Key to surviving and growing in the midst of today’s obstacles are knowledge and preparation.

With tips to help you prepare, here are three HR challenges nonprofit organizations will face this year:

1. The Affordable Care Act

As with all other employers in the U.S., nonprofit organizations with 50 or more employees are subject to the employer mandate of the Affordable Care Act (ACA). The employer’s obligations under the ACA can be burdensome – like tracking employee hours, ensuring affordable coverage, filing reports with the IRS and providing employees with statements of coverage and exchange notifications.

With typically smaller HR teams than their for-profit counterparts, charitable companies will have to work harder to ensure all obligations are met to protect themselves from risks such as legal fees and penalties. Human capital technology companies like Paycom can make things a lot simpler for payroll and HR teams by accurately and automatically tracking important information, filing forms with the IRS, obtaining employee signatures and enrolling employees in benefits. Employers should develop a strategy for how they’re going to be compliant with all ACA regulations now and in the future.

 2. Minimum Wage Increases

Minimum wage rates will increase in at least 25 states across the country. Some states, like Maryland and California, will actually see more than one raise this year. Wage increases can take a toll on any business, but they can be especially difficult for organizations with variable budgets that are dependent on charitable giving and grants. Even if your employees aren’t paid at or near the minimum wage, it can still impact your business in certain situations, from overtime-exempt employees to a rise in supplier costs.


Having an effective system for monitoring wage increases at all levels is vital to careful workforce and budget planning. The Society for Human Resource Management (SHRM) points out that it’s also important to train HR, payroll and managers on increases, posting and notice requirements.

3. Retention and Recruitment

In a recent study, one out of five nonprofits indicated that turnover was the biggest employment challenge. That’s not surprising when you consider that 86 percent of people who currently are employed are looking to change jobs, according to a recent survey.

Turnover is costly and because your employees wear so many hats, it can be harder to find a replacement with the right skill set. Your mission and the communities you serve depend on having passionate and driven employees. Finding ways to engage and retain your top talent will be important to your success in 2015.

The best thing about the start of a new year is all the possibility and promise it holds. Difficulties and challenges will come with it, but the more obstacles you overcome, the stronger your business will be.