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Written by: Alex Andrews, CPHR
Human Resource Consultants – to hire, or not to hire – this is a really good question.
Over the course of my career, I have had the privilege of working with some incredible Human Resources (HR) consultants in a variety of capacities. From full blown project managers to administrative support, they have all served a purpose filling a specific need. That said, at what point do you move away from a consultant and bring the talent in house?
For most small businesses, there are several advantages to hiring an outside consultant, the most crucial of which is the money savings over hiring a full-time employee. Consultants can be brought in on an as-needed basis, contract, or hourly. Either way, there are benefits to the business. But at some point, as an organization grows, HR consultants will be asked “why should we hire you rather than just hiring an HR employee?”
This can be a challenging question to answer as it depends on what your business is looking for and what its needs are. There is no one-size-fits-all HR professional to employee ratio, so each organization will have to do an analysis of what these needs are.
Hiring a full or part-time HR employee has its advantages and disadvantages. When organizations are smaller (50 or fewer) the responsibilities of “HR” are often spread out and many share in the duties. Recruitment and selection, personnel file management, pay and benefits administration can be taken on by multiple individuals in addition to their day jobs. The challenge, however, is there may not be one person to go to for questions or guidance. Having an in-house HR employee can reduce redundant work as these tasks are consolidated into one central position. The challenge is determining if the work load is sufficient enough to support a full-time employee. Remember, however, that an HR “Jack-of-All-Trades” is often a master of none.
Advantages of Hiring an HR Consultant:
1. Ease of Recruitment
Though they may not intimately know your business, they are experts in the field of recruitment and selection and can advise on how to attract the most qualified individuals. Those whose expertise is in recruitment can develop personalized recruitment strategies and coach business owners on the right hiring decisions, thus saving valuable resources (time and money) on making the right decision.
2. Satisfying Legal Requirements
HR consultants can mitigate legal implications which arise from employee relations matters. They are abreast to changes in legislation and can investigate complaints in or out of the organization. If their expertise is in conflict resolution, countless hours and resources can be saved through improved management of workplace conflict. This can result in a stronger workforce, better equipped to handle disagreements and improve morale among staff.
3. Built in Expertise
A recent study, conducted by Torch Research on behalf of the Human Resources Institute of Alberta, stated that 74% of respondents hire for expertise. HR consultants have to maintain their expertise to be relevant in this market. Small-businesses who do not have a dedicated HR department can greatly benefit from an HR consultant to provide guidance on the day-to-day operations. Though, the research states that most larger organizations primarily hire for three reasons; industry specific knowledge, HR-function expertise, or they are someone within the organization’s network. HR consultants can advise on HR functions that will sustain employee engagement and productivity.
4. Support Strategy
An ongoing challenge for individuals in the HR community is to provide strategic support to the business. Strategic human capital development is an HR consultant's strength. HR staff can benefit from and learn the additional expertise the consultant brings to the tactical HR functions. This can alleviate the demands of other employees and free up time to dedicate to designing and implementing other workforce planning initiatives. In addition, it allows small-business owners to focus on their business and leave HR functions to the expert.
Whether your organization has a dedicated HR department or hires HR consultants as needed, the reality is that all organizations, to truly be successful, must put focused attention on people management matters. So as an organization grows, one will ask, when it is time to hire, versus using an HR consultant.
Here are a few indicators you need to hire an HR professional:
· Recruitment efforts are increasing and you are hiring new employees at a quick rate
· You begin to notice an increase in employee issues
· Labour standards are becoming a concern and there is possible lawsuit or litigation concerns
· Benefits and compensation strategies are growing and becoming more involved
Here are a few benefits of hiring an HR professional full-time:
1. Growth of Organization
The last thing you want to be doing as an organization is playing catch-up when the competition has passed you. Waiting for growth to merit a full-time hire can create more issues than hiring when you are still growing. A full-time HR professional can be the catalyst for managing growth. They can support the development of human capital and recruitment strategies and support the organization achieve its goals through attracting the right and best talent.
2. Remove Burden from Others
Prior to hiring an HR professional, some duties were delegated to others to manage. Now, recruitment, orientation, training, documentation, investigations, conflict resolutions and terminations can rest on the shoulders of HR and free up time for the management team to perform more valuable tasks. In addition to this, it centralizes all HR functions and creates a standard way of performing.
3. Develop Your Talent
HR professionals can also support the talent management functions of payroll, compliance tracking, vacation and time off management, improve performance review process and help employees set performance objectives. This will free up valuable time to focus on profit generating activities.
HR consultants and professionals have their time and season. When the need arises to bring in HR expertise, ask yourself what it is you are trying to accomplish. If it is a quick project, a consultant could be your best resource. But if you find you are in a growth pattern and people issues are taking up more hours than you have time, hiring a full-time HR professional might be the best option.
Reference: Alberta HR Trends Report – Spring 2017, Human Resources Institute of Alberta
Alex Andrews, CPHR is a member of the HR leadership team for one of Canada’s largest agricultural and construction equipment dealership groups where he oversees the organizational development and training programs. He can be reached at firstname.lastname@example.org.