Benefits of HR Consulting Services for Small Businesses

HR Discussion with Group

As small businesses grow, the complexity of their people management multiplies. Yet many small businesses hold off building out their human resources because they see it as a cost center. In reality, wisely investing in HR is a revenue generator. Whether it’s strategic compliance risk management, recruitment process improvement, or leadership and management development, HR experts not only keep small businesses from avoiding costly people problems, but they also help businesses drive productivity and ultimately profit.

What Is HR Consulting for Small Businesses?

HR consulting for small businesses means working with an outside company for strategic HR advice and implementation of foundational HR work or project management. An HR consultant may offer expertise in areas such as:

  • HR compliance and employee relations
  • Recruiting and onboarding
  • Workplace policies and processes
  • Performance management and retention
  • Management development and training
  • Leadership development and succession planning
  • Employee engagement and recognition
  • Total compensation and rewards

Fractional HR, Defined

Fractional HR is similar in concept to HR consulting, but there are several key differences. While HR consulting will provide advice on specific tasks or projects, fractional HR is an ongoing relationship with HR professionals who can act as an extension of your team.

With fractional HR, small businesses can leverage HR expertise as needed, without the need to hire a full-time HR professional. This approach allows small businesses to benefit from executive-level HR guidance without the cost of hiring, training, and developing a full-time (often inexperienced) HR staff member. It makes fractional HR both a useful and affordable solution for many small businesses looking to wisely invest in their HR function.

Types of HR Consulting Services for Small Businesses

HR Compliance Consulting

Small business HR consulting and fractional HR often help small businesses navigate complex HR regulations and help them maintain compliance with local, state, and federal laws. An experienced HR compliance consultant works with an organization to understand its unique workforce and its tolerance for risk to design a compliance strategy that mitigates potential fines, penalties, and lawsuits without overburdening the business.

HR Recruitment Consulting

HR consulting can help small businesses compete for top talent by streamlining their hiring and onboarding processes, improving their employer branding and attractiveness, and building strong communication plans for their total reward policies.

Professional Leadership & Coaching Services

Studies show that half of employees have left their jobs because of a bad manager. HR consultants can significantly improve both retention and productivity by providing guidance and coaching to members of your team who are looking to develop their leadership skills and achieve their full potential. Professional leadership and coaching services are aimed at helping leaders improve their performance, build effective teams, and drive organizational success.

Strategic HR Consulting

In strategic HR consulting, HR professionals work with businesses that are aligning their workforce practices with their overall business strategy. This type of consulting helps businesses develop and implement talent strategies that support their long-term goals and objectives.

Project-Based HR Consulting

Project-based HR consulting consists of developing and implementing specific HR projects or initiatives. This type of consulting is often used when a business doesn’t have the specialized HR knowledge and/or the bandwidth in-house to successfully create, launch, and iterate on a needed HR project. Examples include implementing a new HR system, conducting a compensation analysis and review, or developing a training program for new managers and supervisors.

Is HR Consulting for Small Businesses Expensive?

Contrary to popular belief, HR consulting services are often the most affordable option for small businesses. The cost of doing nothing or DIYing HR can be far greater than investing in HR consulting—whether that’s costly legal issues from avoidable employee relation issues to detrimental talent strategies that lead to high burnout and diminishing productivity. By investing in HR consulting, small businesses can save time and money and improve the experiences of their employees.

What to Look for in an HR Consulting Firm 

1. Long-Term Relationship

Start by looking for an HR consulting firm that wants to build a long-term relationship with you. When vetting firms, make sure to understand their processes for learning about your business, managing stakeholder alignment, and implementing any plans or projects. Avoid any firms that focus on creating boilerplate plans or deliverables and have no intention of seeing through their rollout. Consider a fractional HR provider—their experts will act like members of your team, with all the collaboration and productivity that comes with it.

2. Small Business Experience

As you know, the challenges and opportunities of small businesses are very different from those of larger companies. That’s why you’ll want to work with an HR consulting firm that focuses on small businesses and has experience with their particular local and industry-specific needs.

3. Affordable Flexibility

Your HR consulting relationship should be affordable and flexible, allowing you to access the expertise you need without breaking the bank. The right HR consulting firm for your business is one that understands your resources (and their limits) and sets realistic goals within your budget.

4. Breadth & Depth of HR Talent

Look for an HR consulting firm that has a wide range of experience and can provide both strategic and tactical support. While newer agencies and lone HR consultants may be able to offer lower prices, they often struggle to provide a comprehensive approach that’s critical to people practices that yield results. They don’t have the wealth of experience or the breadth of resources of a full-shop HR agency. A full-shop HR agency is able to address any of your HR needs with a holistic perspective.

5. Culture & Collaboration Fit

Just like any other consultant, you want to make sure your mission and values align with those of the consultant. You want them to elevate your business, but not push you to be an organization that doesn’t make sense with your goals or your values. That’s why you want a partner who will meet you where you’re at and who can set real expectations on the amount of time you’ll need to invest in the partnership.

Get the HR Consulting Services Your Small Business Needs

Interested in fractional HR consulting for your business? Reach out to the team at HR Collaborative to find out how our team can elevate your HR.

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