4 ways nonprofits overcome their biggest HR obstacles

Nonprofit workforce challenges and retention strategies for leaders 

While leading the Paylocity Advocacy Program, I’ve talked with clients across a wide range of organizations and heard firsthand what HR and payroll teams deal with every day.   

Working at a nonprofit, you know the mission comes first. Your focus is on the communities you serve, so there's no time, or money, for HR headaches to slow you down. And let's be honest: A tight budget leaves little room for error. Without the right tools in place, fixing even a small mistake can eat into other deadlines or pile on costs you didn't see coming. 

Here are four of the biggest HR challenges I hear about, and how our nonprofit clients say they’ve worked through them.  

Pain point #1: Growing inefficiencies from manual and paper-based processes 

Let's face it: Paper-based tasks like onboarding and performance reviews eat up your time. All that manual work adds up fast, and you feel it. 

You rely on seasonal staff, volunteers, and interns to keep things moving. But with fresh faces coming through the door again and again, onboarding never really stops. And when those steps live on paper, things slip through the cracks. Work slows down, admin costs creep up, and your team spends more time chasing forms than doing the work that matters. 

Lincoln Park Zoo felt the strain when paper-based processes couldn't keep up with the way they actually work. Visitor numbers rise and fall with the seasons, so the team regularly onboards and trains new staff to give guests the best experience possible. Without the right setup, they were pouring time and energy into places they shouldn't have to. 

The solution: Building an on-ramp for modern, centralized HR

Once Lincoln Park Zoo switched to Paylocity’s digital platform, they transformed every part of their HR processes and created a unified system. Genevieve Gonnigan, vice president of HR, People and Culture at Lincoln Park Zoo, shared that expanding the onboarding module sped up how quickly they could bring someone into the system. 

Now, when employees log in to Paylocity, they find HR information, pay stubs, and time-off requests in one place. The zoo also uses Paylocity's Learning module to give new hires, volunteers, and current employees access to a wide range of training courses. And they lean on Paylocity’s Community tool as a central hub for communication, with dedicated groups for interns and other employees.

Pain point #2: Struggling to maintain employee morale and recognition

Recognition is easy to push aside when everyone is busy. But when employees don't feel seen for their work, morale can slip, engagement can drop, and turnover can become harder to control. 

The Lawrenceville School knew this challenge well. Recognition was inconsistent and rare, and it took a toll on morale across faculty, administrators, and facilities teams. Human Resources Director Kristen Oberlin noted, “We used to only have an annual Employee Appreciation, but it was a one-off event.”  

The solution: Building daily organizationwide culture 

A little gratitude goes a long way. When people thank their peers and employees, it builds confidence and connection across the whole organization. According to  Gallup, employees who are well-recognized are 45% less likely to voluntarily leave their employer compared to employees who don’t get meaningful recognition. 

Now, Kristen sees a steady stream of notifications as faculty, administrators, and facilities team members acknowledge great work and shout one another out through Paylocity’s Community and Recognition & Rewards modules.  

Pain point #3: Poor internal communication 

For some nonprofit HR teams, one of the trickier challenges is reaching a workforce that doesn't sit at a desk. Whether employees are outside, in a classroom, or in the warehouse, getting the right information to everyone at the right moment isn't always straightforward. Without a solid line of communication, connection can suffer, and that tends to affect both engagement and productivity. 

At Humane Animal Rescue in Pittsburgh (HARP), the team relied on little more than an old SharePoint page to share their mission. They didn't have a real platform to communicate key goals or rally employees around a shared purpose. 

The solution: Strong communication and employee trust  

HARP added a mobile-first approach, and suddenly, deskless employees had real-time communication and HR tools in their hands 24/7. They could check their schedule, request time off, view a paystub, or read announcements from the company without tracking down a manager.  

Dan Cody, Executive Director at HARP, mentioned how employees now clock in through the Time & Labor module on the Paylocity mobile app. “In the past, we placed timeclocks in specific locations, but that felt overbearing,” Dan said. “The geofencing option in Paylocity offers more trust: once people are on site, they just punch in on the app.” By giving employees these tools, HARP delivers real flexibility, builds trust and keeps communication strong.  

Pain point #4: Leaders lack access to meaningful workforce data 

Plenty of organizations collect mountains of HR and payroll data but struggle to actually put it to use. At ACH Children and Family Services, employees support children and families facing difficult, sometimes tragic circumstances. That kind of demanding work can drive high turnover in key roles.  Without clear insight into why employees were leaving, managers had a hard time supporting their teams.  The right data could help ACH retain talented employees and spot burnout early, before they impact staffing.

The solution: Retaining talent with data-driven processes 

Once ACH joined Paylocity, the Data Insights module gave them a way to analyze what was driving turnover, along with other HR trends.  That data helped them support their team and lift morale across the board.  

“If I had to highlight one great thing about Paylocity, it would be the Data Insights module,” said Laura Feghali, ACH’s HR director “The reporting gives us in HR and our team managers hard, clear data on why people are leaving their roles. It enables us to identify the things that we are doing well and the areas for improvement, whether that is offering people more targeted support or changing our compensation model. These are the things that will help us to stabilize our workforce and ensure we do a better job for families and children in need.” 

Transform your nonprofit with smarter HR technology 

After hearing from these nonprofits, one thing stands out: The organizations that treat HR as a priority are the ones moving fastest. Their edge comes from digitizing HR processes and using that foundation to strengthen the whole organization. 

When you reduce the manual work of onboarding, speed up hiring, invest in community, and use data to retain employees, you build a more visible, more resilient organization. 

In my experience, the best nonprofits put HR systems in place that move the work forward. 

But it's always the people who inspire the mission.