Table of Contents
Table of Contents
What Is HR Consulting?
HR consulting is the hiring of an HR professional to provide advice and/or services for a broad array of human resources domains. This can include compensation, benefits, learning and development, performance management, policy development, talent acquisition, employee engagement, succession planning, or even a complete human resources strategic plan.
Should You Become an HR Consultant?
The ideal consultant is strong in two critical areas. First, they have gained the technical competencies of the profession through direct experience within HR. Second, they are able to assess opportunities in other organizations, make recommendations and deliver that information in a compelling manner. With this experience and ability to influence others, an HR consultant is able to build the necessary trust to be successful.
Advantages of Consulting
As with any career choice, there are pros and cons. Here are some of the benefits of HR Consulting:
- Work flexibility. The HR consultant can choose their hours and work when and as long as they want. Taking time off is flexible and they have complete control of their schedule.
- Client selection. A consultant can choose client engagement based on their own set of selection criteria. This means they are never forced to work with people with whom they’re not aligned and can leave the engagement once the work is complete with no ramifications.
- Strengths focus. The HR professional’s service offerings can be designed to focus purely on their strengths This drives not only engagement but also productivity.
- Work variation. Variety is the spice of life, as the saying goes. Because no two clients are the same, even if the HR consultant provides the same services for both clients, its delivery will manifest itself differently.
“The pros of working as a consultant include being able to work with the kind of clients you want to work with, delivering the support you love, [and] the ability to work around your schedule, particularly for those with families. Expedited development is a huge area when it comes to having your own consultancy. There is so much happening right now!” — Sam Eaton
Disadvantages of Consulting
There are a few downsides to becoming an HR consultant. Here are a few:
- Inconsistent revenue stream. There is no regular paycheck. Contracts end or can be broken with little if any, recourse. The biggest challenge to success is to maintain a healthy pipeline of new clients or workstreams on a consistent basis. There are two ways to do this: get the business directly or work as a contractor under someone else. The latter requires donating a hefty amount of potential income, often 25-50%. Late or disputed invoices can also add to the inconsistency of revenue.
- Crowded field. Being able to differentiate one’s unique skills as an HR consultant can be quite challenging in a saturated marketplace.
- Tax planning. As independent contractors, no taxes are taken out of payments consultants receive. This requires a disciplined approach to cash flow and a strategy around how to save a recommended 25% of earnings towards future tax payments.
- Benefits. There is no sponsored healthcare or retirement plan. Finding healthcare coverage on the open market can be quite expensive. Retirement planning will not include 401K IRAs and there are no employer match subsidies. While there are income-deferral financial tools available, meeting with a tax advisor should be an important part of the consideration before pursuing an HR consulting career.
“The main [con] I see is consultants learning the art of selling and realizing that they have spent X years running someone else’s business. Another con I frequently see … is having to work at odd hours to fit in around that schedule.” — Sam Eaton
Responsibilities of HR Consultants
A comprehensive understanding of a client’s business and current pain points is the HR consultant’s primary responsibility. The consultant’s role can vary dramatically in the level of involvement with a client. This role can be broken down into three key areas:
Recommendation and Guidance
A key component of an HR consultant is to make recommendations, not give orders. The client then determines whether or not to accept the recommendations. Once recommendations have been accepted, the consultant can create the process and provide guidance around its execution.
Sometimes a client will have a specific need for a product or process that is currently either broken or simply non-existent in their company. As an example, a client may be seeking an incentive-based compensation structure, so the consultant could focus on creating the steps required to develop this initiative. Frequently the client or employees will be required to collaborate. For more complex initiatives, the consultant should expect to conduct multiple check-ins with the client at key milestones in the process development.
Once an initiative is developed, the HR consultant can help decide if it will be implemented by the company’s staff or led by the consultant. Often a consultant will partner with key employees to ensure flawless execution. Other times it can be a simple handoff, such as writing an employee handbook, covering it with the management team, and then leaving it up to them to disseminate it throughout the company.
How to Build a Career in HR Consulting
While there is no magic formula, here are a few key steps to consider before making the leap from a corporate career to consulting:
Step 1: Determine Your Offering
Be clear about what you will offer and to whom. Having a targeted audience will help attract customers who will need your specific focus.
Step 2: Develop Market-Based Pricing
Find data on competitive pricing. It’s important to offer value based on an understanding of your local market.
Step 3: Create a Social Media Strategy
Your brand and messaging should be clear and consistent across your website, Twitter, Facebook, and LinkedIn accounts. Develop a social media presence by posting original content regularly and publishing for others where you can. Joining groups can help increase your network. HR consultant Sam Eaton advises, “Stay focused on who you want to connect with and how you add value. Just be yourself and stay consistent.”
Step 4: Develop Your Pipeline
Use your network to develop a lead strategy. Ask for referrals. Do pro bono work when possible to get your name and brand established. Ensure your website has an area that enables you to be contacted directly. Be available.
“During those early stages, think about who has the clients that you’d like to work with in a complementary field. For example, insurance brokers or CPAs are great referral partners. This helps to increase your market share quickly whilst you build other opportunities from relevant networking activities.” — Sam Eaton
Questions You’ve Asked Us About HR Consulting
Still have questions? Send them here – we promise we’ll answer them.
Milly Christmann is a high energy, operationally oriented talent management leader with extensive expertise in human resources, sales management, service and operations. She is recognized for collaborating with leaders to achieve their business goals by unleashing the power of an engaged workforce. By using process improvement, technology and strong, impassioned people skills as well as by attracting, developing and retaining top talent, Ms. Christmann drives change that matters.