5 HR Trends in the Nonprofit Industry

If you’re running nonprofit HR the same way you did five years ago, it’s time for an upgrade. HR is continually evolving, and that’s especially true in the nonprofit space. HR professionals need to adapt, adjust, and pivot based on market and employee trends.

We interviewed HR leaders in the nonprofit and social advocacy sectors about the trends shaping HR in the industry, including employee mental health, retention, AI, and more.

Read on to discover the top five trends and get insights on how you can better support your employees and build nonprofit organizations with impact.

*Editor’s note: Quotes have been lightly edited for clarity and concision.

1. Growing support for employee mental health and wellness

Employee mental health is a top priority for HR professionals in all industries, but especially in the nonprofit sector. Dealing with sensitive issues, limited funding, and high-stress situations can be draining on employees’ mental health and lead to burnout.

95% of nonprofit leaders are concerned about employee burnout, and half are more concerned about burnout than they were even just a year ago.

Nonprofit employees often excel at caring for people and causes they're passionate about, but they may overlook their own wellbeing. That’s where the company comes in to support and encourage wellness in real, tangible ways that resonate with employees.

One HR pro in our survey highlights two initiatives: First, “implementing wellness programs to support mental health, stress management, and work-life balance.” They also pair that with ”reviewing the workload distribution and providing resources for employees who do face burnout.”

Other wellness-centered employee initiatives include:

• Employee assistance programs (EAPs)
• Stress-reduction and mindfulness programs
• Flexible work options
• Increased paid leave and time off

When employees’ mental and emotional wellbeing suffers, it impacts every part of their work and life. When employees are stressed and overwhelmed, they often can’t fulfill the organization’s mission, leading to a ripple effect across communities.

2. New approaches to retain purpose-driven talent

In an emotionally demanding nonprofit industry and a challenging economy, retaining great talent is more difficult than ever. Nonprofits also experience higher turnover rates than the private sector, with the top reasons being:

• Low pay or funding cuts
• Stress and burnout
• Lack of competitive benefits like remote work or flexible hours

Juggling all these retention challenges puts a lot of pressure on HR, adding even more stress to the situation. As one HR pro puts it, “Non-profits don't pay as much, and trying to keep talent in a pay structure that we know will never be able to compete with corporate is sometimes difficult.”

Despite these hurdles, HR can still be a champion, building purpose in the work, programs, and a transparent, supportive culture to compete with for-profit employers.

Here are some of the top strategies to implement:

Recognizing direct impact
Purpose-driven work is powerful, but it can be challenging for some nonprofit employees to see the impact of their work. Praise your people for the meaningful impact of their work, so they can see how they’re supporting the organization’s mission.

Career development and upskilling
Employees want to continue learning and growing, especially as technology evolves. Nonprofits can offer personalized development plans, mentorships, or courses and workshops in partnership with other educational or professional groups. Upskilling is a win-win: employees gain valuable skills to grow their careers, and nonprofits have access to a talented group of employees.

Creative benefits

In the face of limited funding, HR professionals can shine by prioritizing people. Nonprofits that offer tailored benefits packages have a 33% higher retention rate than those with standard benefits. For example, the HR leaders in our survey mentioned:

• 401(k) matches
• Supportive insurance providers
• Top technology tools
• Partnerships and discounts with local businesses and services
• Volunteer days
• Flexible work arrangements
• Generous PTO

3. Navigating politics

More so than many other organizations, nonprofits are significantly impacted by the political landscape. Regulations on the local and federal levels can affect everything from funding to hiring and the focus of an organization.

Politics in the US have become increasingly divisive, with a record 80% of Americans stating that the country is greatly divided on the most important values. Employees naturally have questions and concerns amid the evolving and unknown political landscape, but it’s important for HR teams to remain neutral and nonpartisan and not let their personal beliefs impact the experience for other employees.

But that’s easier said than done. “The intense political polarization we're experiencing right now makes it challenging to foster a positive and inclusive workplace,” reflects one HR pro.

Instead, HR teams need to focus on what they can control and work closely with their leadership team to do the following:

• Proactively identify and address political or ideological tensions.
• Provide regular training on diversity, inclusion, and respectful dialogue.
• Establish open lines of communication for employees to ask questions or share concerns.

Navigating politics as a nonprofit HR professional is challenging, especially in such a volatile environment. Maintaining open communication with employees and leaders and holding strong to company values can help HR teams stay even-keeled as they lead their nonprofits.

4. Cautious curiosity about AI

Many of the HR pros we talked to are divided on their feelings about AI. Some point out its lack of empathy and human emotion, which is central to many successful HR teams. On the flip side, AI has staying power, and many nonprofit HR teams are excited to embrace it for things like data analysis and customer service.

That attitude tracks with broader trends in nonprofits, as they’re integrating AI faster than the private sector, with more than half of nonprofits using AI.

For nonprofit teams working with limited budgets, AI can automate repetitive tasks and provide employees more time for strategic, creative, or emotionally-complex tasks, like running programs, connecting with donors, and building community relationships.

Within HR specifically, AI tools can help with hiring and retention processes, including:

• Screening potential job candidates for relevant skills and experience
• Analyzing employee data to highlight trends about when employees leave and why
• Gathering employee feedback about benefits and culture, and analyzing results for insights
• Creating training plans for in-demand skills and upskilling opportunities

As with all use cases for AI, HR teams can’t rely solely on automation and technology to make crucial decisions. AI can help highlight valuable insights and monitor employees and job candidates, but the ultimate decision about hiring, benefits, and other HR tasks needs to be made by humans.

5. Volatility and HR burnout risk

In our interviews, many of the HR pros highlighted the unique challenges of their role—navigating cultural differences across regions, a wide range of stakeholders (leadership, employees, volunteers, community members), and the many shifts in policies.

As one HR pro puts it, “One of the hardest parts is just dealing with all the political changes and regulation changes that happen among these countries, especially since a lot of them change them monthly. It's exhausting."

The bottom line: You’re getting a double helping of compassion fatigue, and you’re dealing with the hectic business that is nonprofit and advocacy work. And while you should definitely take advantage of the same wellness initiatives (EAPs, mindfulness programs, etc.) you offer employees, that’s not going to fix the organizational issues.

You might not be able to change how the nonprofit sector works, but you can influence key workplace dynamics like your company culture, leadership’s behavior, and how employees feel ‌about HR.

We've collected our top resources to help you relieve some of your HR team’s stress.