When You Need an HR Consultant

Eric Mochnacz
July 9, 2020

HR Consultants Bring All the Experience of a Seasoned CHRO

As the owner of a small or mid-sized business, having the right HR resource is essential to the growth of your company.  The first instinct for any business in hyper-growth mode is to go to market for their first Human Resources Manager.  Depending on the size of your organization, an external HR hire may not be the most effective or cost-efficient way to go.  Instead, making the choice to engage with a skilled HR consultant or consulting firm can provide your business with the experience of a seasoned chief Human Resources officer…potentially at the fraction of the cost of a full-time hire.

What is an HR Consultant?

An HR consultant is an experienced professional with a wide range of human resources management and people operations experience that can be hired to build your HR function from scratch or refine and scale already existing processes.  The right HR consultant for your company is able to leverage their years of business experience and develop scopes of work based on your individual business needs.  An experienced consultant works with senior leadership (or even your current HR department) to elevate your HR function and support the change management initiatives needed to scale your business.

The immediate benefit of bringing an outside consultant into the fold (rather than relying solely on your current HR team) is a qualified consultant or consulting firm can bring a fresh perspective to your organization by looking at problems differently.  Theoretically, everyone involved in the growth of your business has direct industry experience in that business.  That level of expertise, plus tribal knowledge, sometimes makes it difficult for an internal resource to see the company’s blind spots.  When you opt to engage with an external partner, they are able to assess every aspect of your company and ask questions that may have gone unanswered for years because it’s “just the way we’ve always done it” or “that’s how it works in this industry.”  The skilled HR consultant is the person who responds with “That’s great, but let’s try it this way – because I think you’ll get the better results you’re looking for.”  Trying new approaches and developing new solutions to people problems that have always seemed insurmountable with the guidance of an HR consultant can provide your business the competitive advantage it needs to stand out in your industry.  If job seekers in your line of work are tired of the same old experience with all the other industry leaders, a consultant’s innovative approach to employee-facing processes can set you apart among your professional peers.  

Engaging with an HR consulting firm isn’t limited to large businesses.  Startups and small businesses can also draw immense value from a consulting relationship with an expert HR and change management consultant.  If your headcount is under 50, you may not need, or be able to afford, a full-time HR Manager.  But, you do need a subject matter expert to help you navigate common HR tasks; writing your organization’s first employee handbook, creating an efficient and effective recruitment and hiring process, or dealing with day to day employee relations issues.  In that case, you can partner with an HR firm that offers project-based engagements or a subscription-based program that provides you access to a qualified HR professional for a set amount of hours per week to help build your people operations function from the ground up.  If the consultant yields positive results, and your company begins to scale, and there is a need to scale your HR team, the consultant is now uniquely qualified to identify the people who will be able to implement the newly created processes, procedures and solutions long term, even after the consulting relationship ends.  But even if the end goal of the engagement is to source a head of HR, your business can always keep the consultant on in a long-term advisory role.  An effective consultant is able to pivot among different roles and responsibilities to help your organization meet its full potential. 

If you’re satisfied with the results of your consulting partner, you may consider engaging with them on an interim basis.  This is advantageous because you want appropriate guidance to navigate the unique legal requirements and personnel challenges that come with growing a business with more than 50 employees.  Continuing the relationship with the consultant at that point is beneficial because they have the unique insight into your organization and pre-existing relationships and rapport with your people.  

To note, depending on the consulting firm, you may have access to skilled consultants and a full suite of HR services for the fraction of the cost it takes to bring on an internal hire.  Consultants are in a position to negotiate pricing terms and can often offer their services at a fixed price bid.  Also, there is an additional cost savings when it comes to employee benefits – you aren’t responsible for them if you engage with a consultant, whereas you assume the benefits cost if you go to market and hire a permanent HR resource.

How to Know if Your HR Consultant is the “Real Deal”

There are a number of metrics you can use to see if the consultant trying to earn your business is the “real deal.”

First and foremost, an effective way to gauge the “street cred” of a consultant or consulting firm is their proposal process.  At Red Clover, when we receive an inquiry from a business interested in engaging with us, we take the time to learn about the business before suggesting any solutions.  Generally, we know how we can help, but before we put together a proposal with detailed solutions, we have an intentional conversation with the prospective client to determine if we’re the right fit for their organization, the problems facing the business, the case for change, and the scope of the project.  For our interim management projects, which require a larger time investment on our part and a large financial investment on the client’s part, we put together a “Week Zero” report after our assessment meetings with the key stakeholders of the business.  This report is an in-depth analysis of the business –  what’s working and what isn’t, immediate threats to business continuity if there isn’t intervention, and how Red Clover can help.  Ultimately, our goal is to earn the trust of the prospect, whether they choose to engage with us or not.  If you are a business owner and you reach out to a consulting firm, and they email you a generic proposal, promising some templates they’ve created, they aren’t the firm you want to work with, because what works for one business probably won’t work for your business.  Your business has unique HR and people problems, and you want to work with an HR consultant who is able to deliver solutions unique to your business needs.  

Also, the business needs to understand what it truly means when they say “We need Human Resources help.”  In the traditional sense, people think HR is payroll, benefits administration, and workplace investigations.  PEOs, or Professional Employer Organizations, will often market their HR Support Services, but what they mean is they will enter into a shared employment agreement with you so they can run your payroll and offer you affordable health care rates.  They may also be able to automate some of your HR processes – but, if you’re serious about growing your business and creating scalable processes with longevity, you want to engage with an actual HR consulting firm.  A progressive consulting firm recognizes HR is not just payroll and benefits, but it is about developing strategic approaches to people management to create long-term, sustainable change for the better in your organization.  

Additionally, there are a number of certifications available for HR professionals to further demonstrate their expertise.  They aren’t required for individuals to be successful in the Human Resources field, but certifications are a way to gauge if someone has proactively worked to further their knowledge as an HR practitioner.  For example, Red Clover includes Society for Human Resources Management (SHRM) certification as part of its professional development plan for all new team members.  Red Clover consultants engage in the intensive study program and take the formal exam to earn the Certified Professional or Senior Certified Professional designation.  When you work with an SHRM-certified HR consultant, it means they have demonstrated expertise in working within the SHRM Body of Competency and Knowledge and leveraging that knowledge to elevate your organization and its HR function. Also, active members of SHRM have access to a wide variety of resources and knowledge centers to make sure they are providing your company with the most up to date information. You may also encounter consultants who are designated as PHR or SPHR, which is a different certification that HR professionals can earn.  

Now, you may also ask if your consultant should have an HR degree or even a degree at all.  The question of the value you put on a college degree is connected to your organizational values.  If you don’t require it for applicants, it may not be something you require of your service providers.  In terms of what degrees you should look for in those suppliers, again, that’s a company decision.  But, there are a number of degrees that can positively influence the work your HR consultant is able to do within your organization, so don’t feel limited to only partner with those who have an HR degree or corporate HR experience.  There is value in partnering with a consulting firm that values diversity of thought and experience who are uniquely poised to provide guidance to clients from all industries.  Our consultant team at Red Clover may not have traditional corporate HR backgrounds, but we are at the forefront of providing innovative people solutions and building customized HR processes for our clients.

Projects Within the Scope of Work of an HR Consultant

Any engagement with an HR consultant should be tailored to the unique needs of your business.  As mentioned, a qualified consultant will have clearly identified a case for organizational change, and their work plan to accomplish that change.  Depending on their expertise, HR consultants can work to improve a number of your business processes, even ones you may not think because a large number of changes in a business have a direct impact on your people.  

If you’re looking for a consulting firm to help you guide your people strategy, then you want to partner with HR consultants who focus on strategy.  Meaning that a company that tries to earn your business by saying they will take over payroll and benefits while offering supplemental HR services probably isn’t the right fit for your business.  Their supplemental HR services are often templates or automated processes that are not customizable to your company’s specific people’s needs.  Ultimately, you aren’t able to set yourself apart from your competitors if you all are using the same PEO or vendor to automate HR processes that should be individualized for your industry or your organization.  For unique, customized solutions you need a unique consulting supplier on your side.

Generally speaking, HR consultants are able to execute on any project that involves the life cycle of your employees.  An HR consultant should be qualified to put together your company’s first employee handbook, especially if you are scaling from a 3 person start-up to an anticipated business with a headcount of 20 or more.  A handbook becomes even more crucial once you’ve hit the 50 headcount mark.  Your chosen consulting partner should have built a strong employment law network to help support the legal intricacies associated with growing your team.  Then, you look to an HR consultant to help build out the handbook-adjacent processes.  

Traditionally, HR consultants are equipped to help you build out your recruiting, hiring, and onboarding processes.  An HR consultant can revise job descriptions, being sure to introduce and include core competencies, to help attract the talent you want by comparing resumes to required skills for the job.  They can also work with managers and leadership on improving the candidate experience, refining the interview process, developing better interview questions, and training managers on effective interview practices.  We are partial to Behavioral Interviewing at Red Clover.  The right HR consultant can then develop learning outcomes for a thorough onboarding process, as a thorough and positive onboarding process has a direct impact on an organization’s ability to retain talent.

With the newly acquired knowledge of your organization, your HR consultant can also be on-hand to help support with employee relations issues as they occur.  They are also in a position to provide guidance to managers with ad hoc employee issues or develop long-term management development programs for your team leaders.  As a consultant or firm becomes more familiar with your organization, and you begin to trust them, they may be able to leverage some of their non-HR experience on other organization initiatives.  For example, we had completed an interim engagement with one of our small business clients, with whom we had been working with for over a year in one capacity or another.  At the conclusion of the engagement, with my experience of working closely with them for six months and contributing as a member of their leadership team, I knew exactly what the business needed to continue to elevate themselves.  I had direct experience in management development, there had been an expressed interest in leadership coaching, and our managing director had worked on a large-scale employer branding project for a major company in her past life, so we proposed these as projects to the client.  Although these assignments may not necessarily fall under what an HR consulting firm typically does (and there are probably a number of firms and consultants who aren’t qualified in these areas and have no business proposing them), our relationship with the client and our previous professional experience gave us the confidence to propose scopes of work outside of our traditional service offerings.

HR Consulting firms can also prove to be beneficial partners in leveraging assessments in hiring and professional development processes.  As a business, it’s important you do your due diligence about the reliability and use case for certain assessments and you partner with consultants who have invested in the appropriate certifications to interpret assessment results and debrief your people appropriately.  Red Clover has DISC-certified consultants (from a thoroughly vetted partner)  on our team who are adept at using DISC properly and can run individual or group debriefs to help your team reach their maximum potential by acknowledging their different communication styles and how they influence their work together.

How to Measure the Success of an HR Consultant

If you’ve made the choice to partner with an HR consultant to improve and innovate your HR function, the best way to determine if they’ve been successful is to evaluate if they “moved the needle” based on their proposed scopes of work.  In the planning stages, you and your consultant should outline the plan of work and develop KPIs and key metrics to guarantee progress towards established goals.  Throughout the engagement, the consultant and a member of leadership should schedule regular checkpoints; the consultant can report progress and the business representative can provide feedback and confirm progress towards goals.  Return on investment should be evaluated throughout the lifespan of the engagement, not just at the end.  At the end of the day, the success of a consultant is based on their ability to deliver what they promised on time and within the proposed budget.  

At Red Clover, we have a number of success stories.  Our SHRM-certified HR and Change Management consultants have a long track record of successfully meeting the needs of our diverse portfolio of clients.  We always bid for the first project, it’s rare we need to bid for the second.  Looking for a skilled HR consultant to help transform your organization?  Reach out here.

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