Many nonprofits and small organizations face the same issue: they don’t have the budget for a full-time human resources specialist, but they need ongoing, expert HR guidance. Or their HR person also has other responsibilities, such as office management, and only has basic HR knowledge, which creates potential compliance exposure.
The solution: A group of organizations can band together to form an HR consortium, giving all of them have access to the HR expertise they need without the financial costs of a full-time HR professional.
Benefits of an HR Consortium
There are three major reasons why nonprofits and other organizations should consider an HR consortium.
The first benefit of forming or joining an HR consortium is cost. Many smaller, community-based organizations don’t have the resources for a full-time HR expert. A consortium that treats an HR expert or HR consulting firm as a shared resource makes expertise available to all members for much less than hiring a full-time person. If the consortium works with a team of HR experts, it can also offer members a much broader range of expertise.
The second benefit is contract management. Many smaller organizations rely on contracts, grants, and other funding from federal, state, and local government agencies. Each of those contracts will have HR-related guidelines. Many will require compliant policies and procedures, as well as reporting of key metrics.
That means that organizations will need someone who understands government regulations and guidelines to ensure compliance with the contract, grant, or loan and to take some of the compliance burden from upper management. When government funding is critical to an organization’s mission, compliance is critical.
Finally, in a related benefit, the combined resources of an HR consortium can allow organizations to apply for even more grants and funding sources. Having the ability to meet the requirements of more potential contracts is significant for many smaller organizations.
For example, the members of one consortium found potential funding for workforce expansion from two dozen federal agencies. Having access to the HR resources needed to meet those contract requirements helped them obtain a $650,000 federal grant to train more than 100 staff members across multiple organizations. None of the members of the consortium could have obtained or managed that grant on their own. The HR consortium lead helped source the funding opportunity and guided the consortium through the application and submission process.
As another example, many organizations recruit based upon job descriptions and pay/benefits structures that may be outdated. Given the constant evolution in technology and skills, a dormant job description and pay structure may result in hiring people with the wrong skill set, creating unnecessary turnover and recruiting costs. In addition, a dated pay/benefits structure may leave an organization non-competitive.
What an HR Consortium Can Provide
By choosing the right expert(s), members of a consortium can benefit from the expertise a full-time HR team can provide, including:
- Policy Manuals
- Benefits-Compensation Plans
- Employee Relations
- HR Technology
- Skills Training (Front-line staff through management)
- Job Descriptions/Performance Appraisals
In future articles, we’ll outline how to set up and manage an HR consortium, how participants should choose an HR expert or consultant, and what participating organizations should expect.
The Lindenberger Group has expertise in helping organizations manage an HR consortium and get the maximum benefits from the shared expertise of HR professionals. For more information or to discuss your HR needs, please contact us at 609-730-1049 or send us an email.