About HR Consulting

A consultant often provides services when a company is introducing HR or is in a period of transition, growth, and merger, when they provide an opinion about how internal processes and policies could be made more effective.

A contractor is someone who takes on the role of an HR employee to set up HR or to work on a specific project.

Terminology Check:  For the purposes of this kit, we will refer to any non-employee HR role as HR consultant.

Generalists

Some HR consultants market themselves as generalists and often attract smaller companies that need a jack of all trades to provide basic HR services such as recruiting or setting up people programs.

Specialists

Other HR consultants choose to market themselves as HR specialists who offer more strategic or specialized expertise.  These types of HR consultants typically have a defined contract with a specific mandate — one that has a beginning and an end.  This may include:

• Performing an audit in a specific area of HR, and may include analytics and creating reports
• Delivering training programs
• Working on special projects

Any industry, including non-profit, government and small private companies hire HR Consultants. Any size company will hire an HR Consultant, from start-up to multi-national. 

Terminology Check: For the purposes of this kit, we will refer to all industry types as clients or companies.  

Why are HR Consultants Hired?

HR consultants are called in to advise companies or to execute on projects on a wide range of HR topics, including:

• Establishing company policy and procedures and ensuring they comply with provincial employment legislation (especially for unestablished or smaller companies)
• Recommendations for reorganizing the leadership structure of a company or department
• Assisting with high recruiting volume
• Health and Safety expertise
• Benefits expertise
• Compensation specialist, or creating a job evaluation system
• Mergers and acquisitions
• Establishing and documenting HR processes, and hiring an HR Generalist to carry out the processes on a daily basis

• Extremely low start up costs
• You call the shots
• You decide when you want to work
• Dumping a client and moving on to another client is seen as a good thing on your profile, whereas it's seen as a negative in employment profiles
• You’re never trapped
• You gain more experience providing services to varied industries and workforces
• You set your rates
• You can focus on HR work that you like
• You can make more money
• Tax write offs
• Taxes aren’t deducted at source
• GST/HST offsets
• Less politics
• Nurture the secret entrepreneur in you

Many of the advantages of becoming an HR Consultant are double edged swords.

Becoming an HR Consultant means saying goodbye to the certainty and protection of a regular employment situation. You’ll be assuming a lot more risk and entering into unknown territory. You’ll need to survive by eating what you kill and you’ll be measured by a higher standard. You’ll be saying goodbye to the predictability of a monthly pay cheque that’s deposited without scrutiny.

Here are a few additional insights into the disadvantages of becoming an HR Consultant.

Incurring Operating Expenses

You will incur expenses that would not be incurred if you were employed, including:

• Marketing materials such as website and business cards
• Insurances:  WCB, errors and omissions insurance
• Computer related hardware and software, cell phone
• IT support
• Working space
• Costs related to staying current
• Clients who don’t pay you

Loss of Employment Benefits​

• CPP & EI company matches

• Health Insurances. To access the same level of coverage/benefits as an employee, the cost will vary based on your health and age - and will be significantly more costly than premiums paid by the employer.

• Paid time off:
  • Training
  • Sick Days
  • STD
  • LTD
  • Statutory Holidays
  • Vacation days
  • Legislated Leaves
• Employer-paid memberships
• Perks
  • Parking
  • Cell phone

Loss of Protection

As an HR consultant,  you won’t have access to protection from employment standards as it relates to getting paid, overtime, severance eligibility and other protection provided to employees.  

The 'Vendor Status' Effect

As an HR consultant, you’ll usually be significantly more scrutinized than employees:

• Higher performance standards are imposed on you
• Increased scrutiny of work & results
• Increased scrutiny of non-productive time and social interactions
• Expectations of immediate value and ROI
• Increased accountability
• Higher level of expertise expected

You’ll often be treated very differently than an employee and are often considered a vendor providing services, with increased scrutiny of value received by you.  One reason could be that when payroll and benefits are automatically processed every month as a lump sum, management doesn’t make the connection between the value received from any individual employee in return for paid salary, benefits, and paid time off. 

In contrast, when management is presented with your invoice, it’s a re-occurring opportunity to scrutinize the value you’re providing in relation to the amount billed. Often, the amount billed appears to be excessive but only when comparing apples to oranges; apples being straight salary being paid to an employee and oranges being an hourly rate that already includes all other employee costs. 

Bottom line is that you often have to work harder during the hours you’re providing services since you’re often more highly scrutinized than employees.

For you, this may come down to other personal reasons.

Your decision to become a consultant may be the best thing for you. But it's not for everyone, as outlined in the previous section. 

An important factor can sometimes also be whether or not you have emotional and financial support from family, a partner or spouse.

HR consultants aren’t simply expected to be proficient in HR.  They’re expected to understand business and business functions, and to be skilled enough to be autonomous in the work that they perform for the client.

Certification

Getting HR certified demonstrates an additional level of professionalism, skill, and talent to clients. Would you hire an accountant who wasn't certified?  The same appies to an HR professional, and up-to-date certification is expected.

Real-world HR Experience

As an HR consultant, you’ll be expected to have enough well-rounded experience to be able to make recommendations based on HR solutions that have and haven’t worked in the past. Learning what doesn’t work — particularly learning what HR theory doesn’t always apply in the real world – may be even more valuable when you learn from past mistakes.

Business Acumen 

The simple truth is that you’re running your own business and you’re helping your clients run theirs. HR skills on their own won’t cut the mustard.  You’ll need to understand business and how it works – meaning you have to understand the bottom line.

Project Management Skills

As an HR Consultant, you'll often be playing the role of project manager. You'll need to gather information, coordinate work, and keep people accountable. For example, a common project will be for you to create your client's employee handbook or orientation manual and you won't be able to do this work in isolation. You'll need to rally support and get input and documentation from different stakeholders. You'll need to have people review the different drafts you produce and provide feedback (Read:  Pulling teeth!  This is the toughest part of HR consulting!). 

Computer skills

Software

It’s best not to underestimate the importance of strong computer skills. Odds are your client isn’t going to provide you with any administrative support.  At a minimum,, you’ll be expected to know how to use Word and Excel to quickly create a professional looking report, a presentation, a spreadsheet.  You’ll also be expected to understand how to use email, the web, and cloud based software.

If your computer skills aren’t up to par, you’re strongly encouraged to upgrade your skills or hire administrative support.

Typing Speed

Index-finger typing isn’t going to cut it. The first time your client catches you typing at a speed of 6 words per minute, they’re going to seriously question your hourly rate, since the vast majority of your work and communication is done on a computer.

Test yourself. Here’s one of many online speed tests available. If your adjusted typing speed is less than 40 words per minute, you’re not as efficient as you can be and your results may be scrutinized by your client – particularly if you’re paid by the hour.

The good news is that it’s never too late to practice and improve your score. Increased typing speed can easily be gained with practice.

Unfortunately, not every good HR practitioner will make it as an HR consultant.  Be prepared for some brutal honesty in this section. You’ll need a fair number of the following competencies to make it.  We didn’t include the obvious ones, such as communication and writing skills. These are a little off the beaten track and not ones that you’ll find in a consulting text book.

Tolerance for risk & ambiguity:  If you need a strong routine and regular patterns of work and a regular income, stop now.  HR consulting is not for you.

Self-confidence: (if you don’t have this, it’s probably a deal breaker) Your most important function is to influence people who don’t know what they don’t know. You can’t do that without self-confidence. You’ll need a thick skin, grit, ability to be an island, and be sure of yourself in order to convey competence, wisdom and know-how.  You’ll need to be comfortable setting the structure, not following it.  Otherwise, your clients and their staff will smell the fear and may just eat your for breakfast!

Ability to dumb it down:  You’ll need the ability to simplify complex HR issues or solutions in a way that everyone can understand them.  If your PowerPoint presentation slides are jam packed with text, you may not have this skill set.

Builder of relationships:  You’ll need to be able to develop strong trusting relationships with managers, staff, and senior management. Even if you don’t side with a particular individual on a particular issue, if you build strong relationships and trust, you’ll be known as someone who does the right thing — even when it’s not popular.

Wearer of multiple hats – juggler:  You have brilliant organizational skills. You juggle tasks, work strange hours, travel at short notice and produce great work to challenging deadlines without support. You’re a strong project manager – read:  herder of people who don’t always support HR!

Understand who your client is:  Here’s the thing about clients.  A client isn’t a person. It’s not the CEO, the staff, the senior management team.  Your client is this ‘thing’ or entity you want to see succeed. It’s your client’s bottom line - be it profit for shareholders or higher grants for the community. You’ll need to be fully invested in that bottom line success. This competency is another way of saying that you really care about your client, but it’s important to remember that it doesn’t have a face.

Practical:  You’re pragmatic. You’re resourceful. You’re not a binder lady who points to statutes and HR text books. Some of that stuff just doesn’t translate into the real world and sometimes doesn’t result in workable solutions for clients.

Professional | tight lips:  The truth is that this one is hard to do — no matter how professional you are — because we’re all human.  Being an HR consultant means holding yourself to a high standard. Sometimes that means that you can’t become buddies with someone on the senior management team or with the receptionist who loves cats just as much as you do.  In this role, we also see and hear a lot and it’s essential that we don’t inappropriately share information with others.  Our clients need to trust us.

Listening skills:  Sounds cliché, but this one is important.  You’ll need to leave your ego at the door and park the urge to be the first one with the best answer. Before solutions can be discovered, problems need to be fully understood. In order to be successful as an HR consultant, we need to listen carefully and understand.  2 ears, one mouth.

We’ll also meet different people with unique characteristics on client sites. Some will be verbose, others reticent. Having strong listening skills will encourage all types to talk freely. This leads to more information sharing which, in the end, is an important result given that our roles are often tasked with making quick judgments. 

Focus | discipline:  Yes, you’ll have more freedom as an HR consultant. But there will also be a lot more scrutiny on results and deliverables. You’ll have to work hard and prove your value every time you submit your bill.  That can only be done with focus and discipline.