The Best HR Software for Nonprofits

Nonprofit organizations have unique human resources (HR) requirements, but the best HR software can cater to these needs, streamlining functions such as employee and volunteer recruitment and onboarding, time tracking, payroll processing, benefits management, performance management and legal compliance. To help you choose the best HR software for your nonprofit, we examined the top HR platforms on the market, evaluating each one on pricing, usability, features and support.

The cost of HR software for nonprofits can vary depending on the size of the organization, the features required and the vendor chosen. For example, smaller nonprofits with fewer employees and simpler HR needs may find cost-effective solutions that offer basic human resources functionalities for a lower price. These may include features such as employee record management, time tracking and basic payroll processing.

On the other hand, larger nonprofits with more extensive workforces and complex human resources requirements may need robust HR software that includes advanced features such as talent management, benefits administration and compliance tools, which typically come with a higher price tag.

Here are a few things to keep in mind when you’re budgeting for HR software:

• Base subscription fees: Most HR software vendors charge a base subscription fee, which covers the cost of using the software platform. Base subscription fees can range from $25 to $200 per month, depending on the vendor and the level of service.
• Per-employee fees: Many HR software providers also charge a per-employee fee, which covers the cost of supporting each individual employee using the software. Per-employee fees can range from $5 to $20 per employee per month.
• Add-on fees: Some HR software companies charge additional fees for certain features, such as payroll processing, time tracking and performance management. These expenses can vary depending on the vendor and the specific add-on function. While setup fees are somewhat uncommon for HR software platforms, they typically range between $50 and $200 for standard software implementation (if applicable).

Nonprofit leaders should carefully assess their specific needs and budget constraints to select an HR software solution that aligns with their organization’s financial resources while meeting their human resources management requirements.

HR software has a wide range of potential features, many of which are useful for managing nonprofit workforces. Although the specific functions you can access will depend on your HR vendor and software package, here are some of the most popular features to consider.

Hiring and Onboarding

Unlike for-profit organizations that may hire just one type of worker (e.g., full-time employees), nonprofits tend to enlist multiple types of team members, such as full- and part-time employees, contractors and volunteers. HR software can cater to diverse recruitment needs by automating job postings across various online platforms and managing applicant data efficiently. This not only saves time but also widens the reach of job postings, helping nonprofits attract a broader pool of candidates. The software can also facilitate applicant tracking, which makes it easier to identify the most qualified individuals.

When it comes to onboarding new hires, HR software can significantly enhance the experience for employees and volunteers. It enables nonprofits to digitize and standardize the onboarding process to ensure that all necessary forms, documents and training materials are readily available for each new worker. This reduces paperwork and minimizes the chances of errors or omissions. Because HR systems usually include tools for task assignment and tracking, it’s easy for HR managers and supervisors to monitor the progress of new employees and volunteers as they complete their onboarding and training tasks.

Time Tracking and Payroll

Because nonprofits often have a range of worker types, they typically deal with varying schedules and pay rates. HR software can help with this by allowing you to create various schedules and digitally track workers’ attendance. Whether your workers are salaried, hourly or paid on a project basis, these platforms can automatically calculate their pay so you can compensate each person accurately and on time. You often have the choice of payment type, such as checks, direct deposit or pay cards.

HR software can automatically calculate and file local, state and federal payroll taxes on your behalf, which can be particularly complex for nonprofits with varying tax-exempt statuses. This automation saves time, reduces administrative burdens, and enhances financial transparency and accountability, all of which are critical for nonprofit organizations that often rely on donor funding and grants, where accurate financial reporting is paramount. [Read related article: How to Run Payroll for a Nonprofit Organization]

Benefits Management

The benefits administration capabilities built into HR software enables nonprofits to offer their staff competitive benefits packages, which can be a key factor in attracting and retaining top talent. This can be especially crucial in the competitive nonprofit sector, where mission-driven work often must be complemented by attractive employment benefits.

With HR software, nonprofits can easily configure and administer a range of benefit plans, including health insurance, retirement contributions and leave policies. This centralized approach streamlines the enrollment and management process for both employees and HR professionals, thereby reducing administrative complexities. Additionally, HR software can automate benefits-related tasks, such as premium deductions and contribution tracking, to ensure accuracy and compliance with applicable laws and regulations.

Performance Management

Nonprofit employers can use HR software to set clear employee performance expectations and goals, aligning each team member’s work with the organization’s mission. Users can create regular performance review cycles and automate the process of gathering feedback from managers and peers. This approach ensures performance evaluations are conducted consistently and transparently and allows for fair assessments and constructive feedback. [Read next: Employees Are More Likely to Consider Quitting After an Unfair Performance Review]

Compliance and Reporting

Nonprofit organizations often face complex legal obligations related to employment law, tax regulations and industry-specific mandates. HR software can help not-for-profit companies navigate these challenges by automating compliance tasks. This reduces the risk of costly legal issues, fines or penalties that could divert resources away from the group’s core mission.

HR software can also streamline the reporting process for nonprofits, making it easier to generate and submit required reports to various government agencies and stakeholders. This is particularly vital for organizations that rely on grants and donations, as they often need to provide detailed financial and HR data to demonstrate transparency and accountability.

When you’re looking for the right HR software for your nonprofit organization, consider these five key factors as you compare solutions: features, pricing, customer support, usability and integrations.

1. Software Features and Scalability

Before you start your HR software search, analyze your current human resources processes to identify what features you need an HR platform to have. Some smaller nonprofits may be able to get away with a basic HR solution, whereas larger organizations will likely need a platform with more robust features. Identify the features you currently need, as well as the ones you may need in the future if your organization grows; ensure that your preferred software can scale with your nonprofit.

2. Pricing and Budget

HR software is an upfront cost that can save you time and money in the long run. However, nonprofits tend to work with pretty limited budgets, so pricing can be a major factor in your decision. Create a budget based on what you can afford. Then, you can look for HR software that’s within that range and has the features you need. Some HR vendors have simple, upfront pricing, while others may require you to pay for various add-ons. Be sure to compare costs based on all the features you will actually be paying for.

3. Customer Support

Customer support at HR software services can run the gamut. Some companies offer basic email and chat assistance during business hours, while others provide dedicated account representatives and phone support. Sometimes the level of support you get even depends on which plan you choose. Determine how important customer service is to your organization and when and how you may want to seek assistance, and look for a solution that satisfies those needs. It can be helpful to read reviews to see past and current users’ experiences with the vendor.

4. Software Usability

Your HR software is only valuable if your employees understand how to use it. We found all of our top picks to be relatively user-friendly, but they vary in complexity. For example, some platforms provide a more basic and intuitive experience, whereas highly customizable programs have a steeper learning curve. Whether you sign up for a free trial or try out an interactive product demo, it’s always a good idea to test the usability of the software before you commit to a contract. When you evaluate the user interface and navigability, consider the skill level of the people who will be using it. Will they find this solution difficult or easy to manage?

5. Integrations

If your nonprofit relies on other business software, like accounting software or time-tracking programs, you will likely want your HR software to integrate with those applications to create one seamless employee management experience. Most of the HR software we looked at can integrate with hundreds of popular platforms, but it’s always wise to check whether the software will work with the other programs you use.

Manual HR processes can cost your nonprofit valuable time and money and increase the potential for errors. HR software can help you avoid these issues and streamline your human resources operations in many ways.

Here are the top five advantages of HR software for nonprofits:

1. Increased productivity: HR software automates ordinarily time-consuming human resources tasks, such as payroll processing, benefits administration and compliance tracking. This efficiency frees up HR staff to focus on strategic initiatives and mission-critical activities, which are essential for nonprofits.
2. Accurate compliance management: Nonprofits must navigate complex labor laws and regulations. HR software helps not-for-profit companies stay compliant by automating tax calculations, tracking regulatory changes and generating the reports necessary for audits, thereby reducing the risk of legal issues and fines.
3. Improved recruitment and talent management: HR software streamlines your recruitment process, making it easier to attract and hire top talent. It also supports talent management through performance evaluations, training tracking and development planning to ensure that nonprofits have the right skills across their workforce.
4. Data-driven decision-making: HR software provides valuable insights through reporting and analytics tools that enable nonprofits to make informed decisions about their workforce by identifying trends, addressing issues and optimizing HR strategies.
5. Employee engagement and self-service: Many HR software solutions offer self-service portals for employees to access their information, request time off and update personal details whether they’re in the office or on the go. This convenience empowers team members, improves engagement and reduces administrative tasks for HR staff.

These advantages collectively enhance nonprofit operations, thus ensuring that not-for-profit business leaders can allocate resources efficiently, maintain compliance, hire and retain talent, and, ultimately, focus on their core mission.