When Do You Need A Human Resources Consultant For Your Business?

Hiring the best candidates for your company is crucial, but making these decisions alone can be overwhelming. Human Resources consultants provide various services to businesses, such as developing benefits packages, managing recruitment, making reorganization recommendations, and mediating disputes.

Human resources consultants can be individuals or companies specializing in specific areas of HR. They may work as part of a consulting team or provide direct services to companies with specific needs.

In this article, we’ll explore the difference between HR consultants and HR managers, the benefits of having an HR consultant, and when should your company hire an HR consultant.

HR manager vs HR consultant

HR includes all the administrative functions of a business, from payroll and benefits to hiring and training. Managing these functions can be challenging for small business owners busy with leading and growing their business.

Some businesses may need an HR manager, while others are better off with an HR consultant.

The biggest difference between the two is that HR consultants act as external experts, hired to provide strategic direction to a company.

Meanwhile, HR managers are internal employees responsible for overseeing routine and strategic HR functions as well as other HR personnel.

HR managers can collaborate with HR consultants on larger HR projects such as budgeting, employee engagement, developing a good HR strategy, and so on.

Benefits of working with a human resources consultant

The job responsibilities of an HR consultant can vary depending on each company’s specific needs. Nonetheless, many HR consultants get involved in a range of duties, including:

• Initiating and/or leading human resource programs and projects.
• Using various research methods such as data collection and surveys to identify and understand issues such as high employee turnover. Offering valuable advice and recommendations to HR personnel to resolve issues and conflicts effectively.
• Developing practical and strategic plans to address business and HR matters.
• Playing a role in the recruitment cycle, training, and managing personnel.
• Creating plans and strategies to drive positive change and manage organizational culture.
• Assisting in the development and policies to support the organization’s objectives.
• Identifying and using suitable HR technology to enhance HR operations.
• Reviewing existing systems and processes to make modifications and address any identified issues.
• Staying updated with the latest advancements in the HR field and introducing innovative ideas to support organizational growth.

When does a company need a human resource consultant?

Although the role of HR is becoming increasingly vital in today’s business landscape, many companies don’t have the resources or expertise to handle HR functions effectively.

This is where a human resource consultant can provide valuable support.

But how can you assess whether your company needs one? Here are the key indicators to consider.

1) Early stage startups

Small businesses and startups with fewer than 10 employees typically don’t require a dedicated HR specialist. At this stage, it’s  possible to manage most HR tasks and challenges in-house with a little foresight and preparation.

Alternatively, you can outsource your payroll and benefits to an HR company to manage it on your behalf.

However, it is crucial to have strong HR foundations in place to ensure your HR operations run smoothly.

2) Legal Risk 

Not having HR expertise poses a significant risk of legal non-compliance. Employment laws are complex and frequently updated, and a small oversight can lead to costly lawsuits or penalties.

An HR consultant can help small companies stay compliant with current laws, anticipate changes, and avoid legal missteps.

3) Retaining Talent

An HR consultant can help small companies attract and retain talent by providing insights into compensation, benefits, and training needed.

They can also help create a positive work culture that fosters engagement, increases employee retention and reduces the costs of turnover.

4) Focusing on Growth 

As a stakeholder, owner, or founder of a small or medium-sized company, your primary focus should be scaling your business by boosting partnerships, sales, and revenue.

However, without HR expertise, you might find yourself embroiled in tasks like payroll processing, conflict resolution, or benefits administration.

Hiring an HR consultant allows stakeholders to delegate these crucial yet time-consuming tasks, ensuring they are handled professionally and free up invaluable time for business leaders.

This streamlines operations and ensures everyone works at their highest potential, driving the company forward.

5) High Employee Turnover

A high employee turnover rate is a sign your company may need a human resource consultant. They can help you identify causes for this high turnover and improve employee retention.

6) Inefficient HR Processes

Sometimes companies create HR processes that become inefficient or outdated with time. Instead of supporting business growth and productivity, these inefficient processes end up wasting time and resources.

Working with an HR consultant allows you to identify which processes need to be updated and how to update them to meet current business needs. They help you improve efficiency and increase team productivity.

7) Employee performance issues

If your employees aren’t performing well, a human resource consultant can help you identify the causes for this weak performance by conducting or offering performance management systems, training, and strategies.

They can also help you setup a performance appraisal system in your company to monitor and improve employee performance.

8) Need for strategic HR planning

Strategic HR planning is essential if your company is growing or undergoing significant changes. A consultant can assist in developing a strategic HR plan that aligns with your business goals, ensuring that your HR functions support your company’s growth and success.

9) Employee Handbooks and policies

An employee handbook helps employers communicate the organization’s mission, values, policies, procedures, culture, and benefits.

Establishing these guidelines is crucial for managing employee expectations and ensuring legal compliance, especially as the company grows.

Need help managing HR functions but don’t know where to start? Considering an HR consultant? Get in touch with Tawzef, your partner and HR consultant for all your HR needs.