HR consultants: Why you need one and how to find one
Is doing it all yourself really the best use of your limited time and resources?
by Alberta Venture Staff
You run a successful business, and you manage everything yourself, from payroll to policies. Or maybe you’ve hired a controller who’s taken on some of the HR tasks, but you’re getting along well enough. Or so you think.
Is doing it all yourself really the best use of your limited time and resources? Alykhan Bandaly, chair of the Human Resources Institute of Alberta, says that while entrepreneurs typically handle the HR function in small- and medium-sized businesses, that’s rarely ideal. “The top three reasons a business fails are financial management, marketing and HR. Knowing the importance of each of those three areas, there are times you need to understand that you’re going to be in the way of becoming better.”
So how do you know when you need to bring someone in to help, and how do you find them? Read on.
It’s Never Too Late
When should you hire an HR expert? The quick answer, says Janet Salopek, president of Salopek & Associates, a Calgary-based HR and strategic planning firm, is as soon as possible. Before you even start your business, in fact. For entrepreneurs starting a new business, hiring an HR consultant during the planning stage can help them get off on the right foot by working human resources into their business plan from the very beginning. “When they’re doing their business planning, they really need to have a strategic focus on their people,” she says. “It’s about being proactive, not waiting until they have issues before they decide they need HR support.”
The reality is that many businesses wait until they’re established before worrying about human resources. As your business grows, you’re likely to find that more and more of your time is being eaten up by HR issues. You need to make several new hires, handle all the associated paperwork, tighten up your bonus structure and benefits, and start instituting a formal review process. Jim Fries, a partner with Cenera, an HR consultancy in Calgary, says these are all instances where a company might want to bring in an HR firm, especially if you’re trying to do it all at once.
But what if you don’t hire an HR consultant and something goes off the rails? Fries says that while he’d rather companies get in touch before things go wrong, it’s never too late to ask for help. “Most often, people call us when there’s a crisis – someone’s made a serious complaint about behaviour, someone is asking for an exception to a policy, or someone is using email inappropriately.” It may not be ideal, but there’s still an opportunity for a consultant to help you deal with the crisis, whether that involves tightening up your policies, terminating an employee, or just making sure you have the infrastructure in place to deal with future issues. “We often end up working with companies on their first policy manual, because they’ve grown from being a smaller organization, more informal, to an organization where there’s a desire to start treating people more equally and more fairly.”
The Right Fit
If you’re hiring an HR consultant, you want to make sure their values align with yours, and that they have the expertise to handle the issues your business is facing. First, says Salopek, make sure the HR professional you’re considering engaging has their Certified Human Resources Professional (CHRP) designation. “You want to know that someone is trained, certified and continually upgrading.” Both Salopek and Fries suggest reaching out to your network to look for recommendations.
Bandaly says it’s essential to make sure the HR professional or firm you choose will be a good fit for your organization over the long term. “If you’re a small or medium business, you don’t necessarily need too much support right away, but the support you need grows as your business grows.” That means hiring a consultant who understands the needs of larger organizations, even if you only have a few employees right now. Hiring a consulting firm can be a good way to handle this, since a larger team will have more areas of expertise and you don’t have to risk that your independent consultant will be hired away as someone else’s director of HR.
Sit down with your potential consultant and talk about your goals and what you’re looking for. You can even ask for them to sketch out a plan of how they might address your current situation. Ask for references, or to talk to current or former clients to get an idea of how they do business.
One last note, says Bandaly, is making sure your consultant is properly insured. This is something many organizations forget, but ensuring that your consultant has errors and omissions insurance and personal liability insurance is essential.
The Long-Term Solution
Hiring a consultant works well for smaller companies that don’t need or have space for a full-time HR professional on staff, but there comes a point when bringing someone in-house is more economical. Salopek says she frequently advises that companies hire a full-time HR person for every 100 full-time employees, but that math doesn’t always hold up. Fries suggests a simpler calculation: bring your HR in-house when it’s cheaper than continuing to hire consultants. Your HR consultant may be able to help you find the right person to fill that role, although he says that even in cases where companies have hired their own director of HR, it doesn’t always mean the end of the consulting relationship. “If a business needs more specialized expertise, like compensation or a specialty, they’ll get a hold of us.”