In every sector, from agriculture to transportation, the most valuable asset to any company, organization, association, or small business is human resources. Taking the time and care to invest in and manage a workforce effectively can be a key element to a business’s success. The road to success is, however, not one smoothly paved. HR challenges such as recruiting the best talent, retaining staff after recruitment, and effectively training employees to deliver their best performance and produce results – all while adhering to company policies and codes of conduct are common demands employers face. Along with the person-to-person aspects of HR, there are also a plethora of administrative tasks that fall under HR, such as implementing and administering payroll, benefits packages, and managing vacation requests and leaves of absences that can overwhelm an employer. Before reaching that tipping point, it’s common to realize that the time has to come to consider investing in HR consulting.

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What are HR consulting services?

HR consulting is an outsourced service retained to assist employers design, implement, and execute essential HR operations without obstructing the existing, in-house HR team - if there is one. An HR consultant could be a generalist, who would assist with a broad range of HR-related responsibilities, or they may perhaps specialize in a particular area such as benefits administration. The services of an HR consultant are commonly called in when a company is in start-up mode, during a merger or acquisition, at a peak time for production, or when a significant change in management is being undertaken.

What types of HR consulting services exist?

As in most services sectors, the range of HR services is broad. Some examples of HR consulting services are:

  • Human capital management (HCM) – the set of practices a company or organization uses to recruit, manage, develop, and optimize employees to increase their contribution and value
  • Specific HR programs, like forming a company workplace culture, establishing a management structure, organizing workforce management schedules, and keeping track of absences, as well as promoting diversity, equality and inclusion (DEI) to support and meet HR goals

What services do HR consultants provide?

Like any profession, HR administers a wide array of services, and an HR consultant service can help in the following ways:

  • Compensation management – determining, managing, and monitoring the salary, incentives, bonuses, and benefits of individual employees
  • Researching and setting compensation ranges that are competitive and fair
  • Benefits administration – this includes managing group health benefits, retirement plans, and other benefits
  • Talent management - recruiting new hires and managing workforce performance and employee engagement
  • Learning and professional development – educating and training employees to allow them to grow with the organization while supporting corporate objectives and core values
  • People analytics and reporting – using HR data, analytics, and insights to drive decision making and anticipate future workforce needs such as recruiting new and/or specialized talent
  • Payroll technology – implementing or integrating payroll and HCM solutions to streamline workflows so employees find them easy to use and manage
  • Compliance – ensuring that company policies and procedures follow all applicable federal, provincial, and municipal guidelines

Organizations that benefit from HR consulting services

HR consultants are well-honed professionals, from generalists to those that zero in and specialize in a particular area. With this expertise and experience, HR consulting services can support companies and organizations of all sizes from Mom-and-Pop shops to large enterprises in any given sector.

What are the benefits of HR consulting services for small businesses?

Managing HR, payroll, benefits, and talent can be overwhelming for small businesses to manage internally, so reaching out for HR consulting services can take the pressure off and allow these tasks to be undertaken by experts while the small business can focus on what it specializes in. A small business could enlist the services of an HR consultant for a one-off project, such as recruiting during a time of expansion or over the long-term for ongoing services such as managing payroll and/or benefits.

What are the benefits of HR consulting services for large enterprises?

As with any department in a large company, it will most likely have a comprehensive HR department made up of a highly skilled team, with members that specialize in certain areas such as payroll or recruitment. However, for reasons such as mergers, acquisitions, restructuring, downsizing, or a rapid company growth spurt, bringing in a Human Resource consultant is a good call. Human Resource consulting can offer an outside-of-the-box perspective to improve existing processes in partnership with the existing HR team. They can provide their expertise to various departments and individual employees to help them adapt to whatever changes the company or organization is undergoing and navigate the shift in environment, company culture, and in some cases, locale.

What to look for in HR consultant companies

Employers will likely find themselves grappling with the notion of outsourcing an external HR consulting service in times of drastic change - when their internal resources are either too limited, or their existing team simply does not have the skills or experience to assist in making whatever transition is on the horizon a smooth one. When selecting a Human Resource consultant or a Human Resource consulting team, it is of good judgment to ask themselves “what services do HR consultants provide that are relevant to the company’s current situation?” The following are tips on what areas of expertise and experience an HR consultant should have:

  • Excellent communication skills with the types of people they will be addressing and coaching. If your company is a manufacturing facility that operates in a union environment, an HR consultant with experience in such a sector will be beneficial. Likewise, if your company is a pharmaceutical lab, an HR consultant experienced working with health researchers will make the most sense.
  • An HR consultant must have a full understanding of their client’s HR issues in order to address them and provide the right services. Do they know the sector? Are they fully aware of the current company situation and in what direction it is headed? This requires the HR consultant to meet and interact with people at various levels and positions across the organization to see and learn about the big picture.
  • Experience – Look for a solid track record of client successes and strong industry leadership in an HR consultant. This is vital when partnering with an HR consultant company.
  • Employee relations – providing inspiration to various members and teams within an organization to deliver top-notch performance requires stellar leadership and motivational skills.
  • Tech-savvy – HR consulting requires in-depth knowledge of a wide variety of ever-evolving software programs to ensure systems such as payroll and Human Capital Management are in place and running without incident. These hard skills are crucial for a company’s success amid competitive talent markets and fluid industry regulations.
  • Ability to make decisions – an HR consultant must have the ability to make thoughtful, at times quick, and in many cases, hard decisions when making recommendations for organizational change management. It is the primary focus of an HR consultant to put the company’s future well-being and success front-of-mind. The HR consultant must be both capable and confident in their decision making, with a proven track record of positive outcomes resulting from their professional recommendations.

Frequently asked questions

What does an HR consultant do?

An HR consultant is hired by a company or organization to effectively manage HR services and administration. Their responsibilities may include tactical activities such as managing payroll, or strategic activities during an acquisition. An HR consultant may work independently or as a team of many HR consultants with the objective of delivering a wide range of impactful and essential services.

What are the various types of HR consulting services?

Human resource consultants can be HR generalists who are trained and experienced in a broad range of HR functions across multiple industries, or they can be HR specialists who cater to one area, such as restructuring. HR consulting services experts can come on board to fulfill your company’s needs for either short-term or one-off projects, long-term projects, or in some cases, complete corporate overhauls.

What is the difference between HR consulting and management consulting?

The primary task of both HR consultants and management consultants is to strive to improve processes and act as a problem-solver for their clients. The difference between the two is that is that HR consulting focuses on human capital (HR, talent attraction, payroll, benefits, employee engagement, performance, and compensation), while management consulting addresses wider-scale business issues such as increasing revenue, management restructuring, recommendations of new systems or methods, and finding solutions to internal issues.

Whom does a human resources consultant work with?

When an HR consultant is retained, they are often tasked with analyzing current issues and providing solutions that can manage expectations and can roll out during times of change or restructuring. When onboard, an HR consultant may work with business owners, decision-makers, department heads, finance leaders, IT specialists, attorneys, and the existing internal HR professionals.

What is the cost of HR consulting services?

As with any consulting service, HR consulting has many variables when it comes to cost. A short-term HR generalist consultant may charge an hourly rate, depending on the level of expertise and scope of work required. For a longer-term engagement, an HR consultant who is a specialist in your company’s sector and/or current situation that requires their expertise – for example, a massive restructuring – may charge by the project, per diem, month, or even year. In some cases, a long-term HR consultant may even draw an annual salary. Cost is a very important factor when retaining an HR consultant or a team of HR consultants, and as with any business decision, the primary objective is achieving goals and demonstrating results. An agreed-upon rate and schedule between the client and the HR consultant is a must before a task or project of any size is undertaken.

Learn More

Are you looking to hire an HR consultant to manage your organization’s talent, recruitment, payroll, or other human resource challenges? With ADP’s solutions, our highly experienced technology and business consultants will help you make the most of your investment.

Talk to us about your HR challenges, and we’ll walk you through our solutions — including how companies like yours benefit from them. Call 866-622-8153 or schedule a meeting to get started.

This guide is intended to be used as a starting point in analyzing HR consulting services and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.