As a new small business owner, you may not have in-house HR. Now that you know what an HR consultant does (see our last blog) and that it can save you time and money, let’s delve into why you should hire one as soon as possible.
This blog will discuss why, how, and when to hire an HR consultant.
Why do you need an HR consultant?
Even with an HR department, a consultant can advise you on HR functions that can maintain employee productivity and performance. Ineffective recruitment strategies can cost small businesses time and money. An HR consultant can advise you on how to attract suitable candidates.
Hiring human resources consultants reduces the cost of hiring individual employees, time, and resources to train and develop them in-house, retain the trained talent, and invest in HR-related technology and tools. This time, money, and effort can be better utilized in developing core business.
Benefits of hiring a HR consultant
- Competencies. An outsourced HR Consultant can provide you with Leadership and Navigation, Ethical Practice, Business Acumen, Relationship Management, Consultation, Critical Evaluation, Global and Cultural Effectiveness, Communication, and HR Expertise (SHRM Competency Model, 2021).
- Compliance. They can ensure your contracts are amenable and your employee handbook includes equal employment and non-discrimination laws, anti-harassment laws, and workers’ compensation laws (Square, 2021).
- Urgent Response. They will ensure compliance with workplace safety and wellness. They will create a proactive set of plans, policies and procedures, so it is clear to everyone involved what is to be done in unexpected situations.
- Time Management. They will assist in the coordination of tasks and activities to maximize the effectiveness of your team’s efforts. Enabling each employee to get more and better work done in less time. They may recommend software to help you track your team’s time and remain compliant.
- Employee Development and Training. They will help your team develop and improve technical and soft skills and knowledge to do each job more efficiently, productively, or safely. They may help you create development plans for each employee, which supports and tracks their progression.
- Performance Management. They will ensure that a set of activities and outputs meets an organization’s goals effectively and efficiently. They may focus on the performance of an organization, a department, an employee, or the processes in place to manage particular tasks.
- Recruitment/retention. They will help you identify, source, screen, shortlist, and interview candidates. They will also help you keep and sustain your employees. They will provide you with strategies and evidence-based plans.
How can an HR consultant specifically help my business?
They will assess specifically what your business’s needs are and create an action plan. HR consulting helps train and coach your employees to help them improve in specific areas and develop professionally. HR consulting can work with management to handle various HR issues, such as retention, recruitment, terminations, compliance, and performance management, and help improve daily operations, such as time management.
When to hire an HR Consultant?
You should hire an HR consultant as soon as your business allows, which for most small startups is whenever you have raised around 500K through fundraising. Many believe an HR consultant is essential before you even hire anyone else, as they can help you with the entire hiring strategy.
When revenue increases
When your revenue increases to over a million dollars, you may hire an internal human resources employee. You must ensure that you can hit all milestones in your business plan and work within a robust financial model.
Considering costs as you scale
Employees are expensive to hire and retain. But hiring and firing in the same position is much more expensive than retention, so retention is an essential goal for all employees you hire (independent contractors [IC] may be useful when a project has a known completion date, and the IC understands the probability of the work ending). If your employees are not bringing you an ROI within a set amount of time, an HR consultant can help you consider layoffs and devise a plan for better hiring in the future.
Scaling will be organic
Having an HR consultant will also help you as your business scales up because you will have someone on hand to help hire and onboard new employees as new work and/or new clients come in. They will help you in nearly every single stage of your business.
When NOT to hire an HR consultant
Hiring an expert full-time for your team can be very expensive, so as long as you have budgeted for HR consultant work, full-time or part-time, including their benefits if they are in-house, then you should definitely keep that HR consultant close.
Hiring an HR consultant is a good decision if you care about the growth of your business. Your people are your most important asset. Without them, you are doing everything yourself and will never be able to scale competitively.
Companies such as Startup Tandem offer outsourced HR solutions for startups and small businesses in various industries all over the country. Learn more about Startup Tandem and the Tandem Culture and give them a call for a free quote on services.
Society for Human Resources Management (2021, August 25). SHRM Competency Model. SHRM. Retrieved September 19, 2022, from https://shrm.org/learningandcareer/career/pages/shrm-competency-model.aspx
Square (2021, August 4). Employee handbooks – how to write one and what to include. Retrieved September 19, 2022, from https://squareup.com/us/en/townsquare/how-to-write-an-employee-handbook