Your best programme manager just quit. Again.
But when you pitch proper HR investment to your board, they point to your overhead ratio and kill the conversation: "We're a charity, not a corporation. Where's the mission money going?"
Organisations that crack the HR equation don't just retain talent, they multiply their mission impact whilst actually reducing per-programme costs.
Here's the forensic breakdown of how to build HR capacity that serves your mission instead of draining your budget. ⬇️
Corporate Australia deals with employees. You deal with employees and volunteers and clients who often become advocates and board members who think they understand operations and funding bodies with contradictory requirements and media scrutiny that can destroy you overnight.
Consider large food relief organisations. They manage substantial staff numbers whilst coordinating thousands of volunteers across hundreds of locations. Each volunteer requires police checks, food safety training, manual handling certification, and cultural competency workshops. Their "HR to employee ratio" appears reasonable until you factor in volunteer coordination complexity — the real workload often equals managing double their traditional employee count.
Unlike their corporate cousins, Australian NFPs navigate a regulatory minefield that would terrify most HR professionals:
Here's the catch-22 destroying good organisations: boards demand low overheads, but mission delivery requires exceptional people, and exceptional people need proper support.
The organisations that solve this paradox reframe HR investment as "mission infrastructure." Progressive boards track metrics showing strategic HR investment generates significantly more programme impact per dollar than bare-bones approaches. 🙌
Key insight: Every dollar invested in proper HR support multiplies across your entire organisation through better recruitment, retention, compliance, and volunteer coordination.
Before diving into specific recommendations, let's establish how to properly calculate your HR team size. The HR to employee ratio measures the number of HR professionals per 100 employees, expressed as a percentage.
The Formula: HR to Employee Ratio = (Number of HR FTEs ÷ Total Employee FTEs) × 100
Critical considerations for accurate calculation:
✅ Use Full-Time Equivalents (FTEs): Part-time employee working 20 hours = 0.5 FTE
✅ Include all HR functions: Recruitment, employee relations, compliance, volunteer coordination
✅ Exclude certain roles: Payroll-only positions, dedicated L&D roles
✅ Count hybrid roles appropriately: Volunteer coordinators often straddle HR and programme delivery
Research consistently shows that smaller organisations require higher HR ratios due to baseline staffing needs. Here's what the data reveals:
However, these figures reflect general business benchmarks. Not-for-profit organisations face additional complexities that typically push their requirements above these baseline figures.
But NFPs face the "Multiplier Effect" — additional capacity requirements including:
|
Factor |
Additional Capacity Required |
|
Volunteer coordination |
+0.5-1.5 FTE per 100 volunteers |
|
Enhanced compliance (NDIS/Aged Care) |
+0.2-0.4 FTE per 100 employees |
|
Grant reporting and funding cycles |
+0.1-0.3 FTE per major funding stream |
|
Crisis management capability |
+0.2 FTE baseline regardless of size |
Several factors unique to the not-for-profit sector create what we call the "NFP multiplier effect": additional HR capacity requirements beyond standard business ratios.
The National Standards for Volunteer Involvement outline eight comprehensive standards that require dedicated attention:
Managing volunteers requires specialized skills in motivation, flexible scheduling, recognition programmes, and often, managing individuals with varying skill levels and commitment levels.
Volunteer coordinator to volunteer ratios vary significantly:
Different NFP subsectors face varying compliance burdens that directly impact HR capacity needs:
Many NFPs operate on project-based funding cycles, creating unique HR challenges:
Rather than applying a one-size-fits-all ratio, use this strategic framework to determine your organisation's specific HR needs.
Baseline HR Capacity: 0.8-1.2 FTE
The conventional wisdom says 0.5 FTE is sufficient. That's catastrophically wrong for NFPs. Why? Because even tiny organisations need:
Most successful small NFPs use a 0.7 FTE dedicated HR coordinator plus 0.3-0.5 FTE fractional expertise (usually a senior HR consultant on retainer for complex issues). At this stage, many organisations rely on:
Essential functions to establish:
Baseline HR Capacity: 1.8-2.4 FTE
This is where most NFPs either flourish or implode. At this stage you're too big for informal systems but too small for corporate-style HR departments.
The structure that works:
⚠️ Critical success factor: The HR Manager needs protected time for strategic work or you'll stay trapped in crisis management.
Key developments:
Baseline HR Capacity: 3.2-5.1 FTE (1.6-2.55% ratio)
Here's where NFP HR becomes genuinely complex. You need specialists, but not the same specialists as corporate organisations.
The architecture that works:
🎯 Volunteer management is a full profession at this scale. Organisations trying to bolt it onto existing HR roles consistently underperform.
Advanced considerations:
Baseline HR Capacity: 4.8-8.2 FTE (2.4-4.1% ratio)
Large NFPs face complexity that rivals multinational corporations but with nonprofit constraints and accountability pressures.
The sophisticated structure:
At this scale, your HR function must integrate seamlessly with programme delivery, funding management, and stakeholder relations. It's not support, it's core infrastructure.
Every NFP leader underestimates volunteer management complexity until they experience it firsthand. Here's the forensic breakdown of what works. 👇
The refreshed National Standards for Volunteer Involvement are the benchmark against which your organisation will be judged by funders, regulators, and volunteers themselves. Implementing them properly requires significant capacity:
| Standard | Capacity Requirement | Key Activities |
|---|---|---|
| Standard 1: Leadership Integration | 0.1 FTE ongoing | Governance policy development, board education, risk framework |
| Standard 4: Equitable Recruitment | +25-40% recruitment time | Inclusive processes, accessibility planning, diversity monitoring |
| Standard 6: Safety & Wellbeing | Dedicated expertise | Safety planning, mental health support, incident management |
Standard 1 (Leadership Integration): Requires governance policy development, board education, risk framework integration – approximately 0.1 FTE ongoing capacity.
Standard 4 (Equitable Recruitment): Demands inclusive recruitment processes, accessibility planning, diversity monitoring – adds 25-40% to basic recruitment time.
Standard 6 (Safety and Wellbeing): Mandates comprehensive safety planning, mental health support, incident management – requiring dedicated safety expertise or extensive training.
| Programme Type | Coordinator:Volunteer Ratio | FTE per 50 Volunteers |
|---|---|---|
| Simple coordination (events, admin) | 1:80-120 | 0.4 FTE |
| Standard programming (ongoing delivery) | 1:45-70 | 0.7 FTE |
| Complex intervention (crisis, mentoring) | 1:25-40 | 1.1 FTE |
| High-risk programmes (child protection, mental health) | 1:15-30 | 1.4 FTE |
Simple coordination (event volunteers, basic administrative support):
Standard programming (ongoing service delivery, regular training):
Complex intervention (crisis support, mentoring, advocacy):
High-risk programmes (child protection, mental health, disability support):
Outsourcing isn't about saving money, it's about accessing expertise you can't afford to employ directly. Here's when it makes strategic sense.
Can't justify $140,000+ senior HR director but need strategic capability beyond coordination level.
Solution: Fractional senior practitioners 1-2 days weekly for strategic planning, board reporting, complex employee relations.
Cost: ~$50,000 annually vs. $140,000+ full-time.
Sexual harassment investigations, workplace injuries, unfair dismissal cases — specialist expertise needed rarely but critically.
Solution: Qualified investigators on retainer rather than developing in-house capability.
HRIS selection, volunteer platform implementation, payroll transitions — project-based activities requiring specialist knowledge.
Most Australian NFPs can't afford full HR departments but desperately need more than basic coordination. The smart money's on hybrid approaches that mix permanent capability with targeted expertise:
Foundation model (30-80 employees):
Partnership model (80-150 employees):
Your board cares about two things: maximising mission impact and minimising overhead percentages. Here's how to make HR investment speak their language. ⬇️
What you're actually spending:
| Item | Annual Cost |
|---|---|
| HR Coordinator salary + super + leave liability | $85,000-$95,000 |
| Emergency recruitment for senior roles | $12,000-$18,000 per hire |
| Fair Work legal advice (reactive) | $350/hour (recent case: $4,200) |
| Volunteer management platform | $2,160 annually (200 volunteers) |
| Basic HRIS system | $7,200 annually (50 staff) |
| Hidden turnover costs | $45,000+ annually |
Quantifiable benefits:
Framework for board presentation:
Compelling arguments for NFP boards:
Investing in your people isn't overhead, it's the foundation that enables everything else you do.
Every life your organisation touches, every community problem you solve, every systemic change you drive happens because you have the right people, properly supported, working toward shared goals.
The Australian not-for-profit sector faces unprecedented challenges and opportunities. Climate change, social inequality, demographic shifts, and technological disruption all require mission-driven organisations that can attract, develop, and retain exceptional people.
Your HR function is your strategic enabler for greater impact.
Tired of losing your best people to better-supported organisations? Subscribe HR understands the brutal reality of Australian NFPs: you need corporate-level HR systems on charity budgets.
➡️ With budget-friendly pricing designed for not-for-profits and tools for performance management that align with mission-driven cultures, see how Subscribe-HR helps NFPs do the HR basics well so you can focus on strategy. Request a demo to see Subscribe-HR's not-for-profit solutions. Subscribe-HR for Not-for-Profit Organisations.