Human Resource Consulting

Introduction & Meaning:

HR consulting is the practice of delivering all aspects of human resource management as

an external provider, and with the professional and business issues associated with
operating such a practice—including client development, contracts and client
management.

Human resource (HR) consulting is also referred to as human capital advisory or HRM
consulting, spans advisory and implementation activities related to the management of
an organisation’s human capital and the HR function. The scope of services ranges from
overarching work on human capital strategy, to the design and deployment of a
compensation & benefits framework, down to the transformation of the HR function.

HR consulting services

The market for human resource consulting services consists of eight main disciplines:
Human Capital Strategy, Compensation & Benefits, Organisational Change, HR
Function, Talent Management, HR Analytics, Learning & Development and HR
Technology.

Human capital strategy includes a variety of strategic work in the HR domain, such as
defining a corporate culture, organisational design, setting up a people strategy that
supports key pillars in the business, as well as the design of HR-related strategies in the
area of diversity, recruitment and talent management among others. Compensation &
benefits, a segment also known as total rewards, looks at all aspects of employee
compensation and benefits from base and variable pay to bonus schemes and other
secondary benefits across the entire organisation – from board level to employees on
the workfloor. The discipline also includes pensions / retirement consulting, and
advisory services tied to health and welfare.

Organisational change encompasses the people side of change, aimed at successfully

guiding and embedding changes in organisational structure, ways of working, or cultural
changes within an enterprise. Change management stands at the heart of the service
area, spanning advisory expertise to tools and interventions, with leadership alignment,
stakeholder management, change interventions and cultural management being the
main offerings. Organisational change services can be sold as standalone offerings by
consultancies. However, they are typically bundled into larger functional
transformations to safeguard the people side of change. The HR function area focuses
on all activities related to improving the functioning of the human resource department.
Offerings vary from developing and implementing an HR target or delivery model, to the
implementation of HR systems and technologies, or other HR transformations that
boost processes and organisational efficiency.

Talent management encompasses all activities required to recruit, retain and develop
talent, as well as establishing the right structure and processes to ensure that
professionals can perform optimally. Key propositions include strategic workforce
planning – the science to anticipate on present and future human capital needs by
matching business goals with HR data – recruitment & retention, workforce
effectiveness and performance management. Through the rise of data and new
technologies, HR analytics has grown into a full-fledged service area within HR
consulting. HR analytics focuses on applying analytic processes to the human capital
spectrum, with the key objective of adding insights and value to HR activities.

The learning & development service line, also referred to as training & development, is
concerned with activities aimed at improving the performance of individuals and
groups. The scope ranges from organisational and competency development across
leadership, departments and functions to support the training and education needs of
individuals. Learning & development also includes the soft side of development, such as
coaching and mentoring, as well as the technological side of training, such as the
development and implementation of learning management systems. Lastly, HR
technology is the field that specialises in all systems and tools used in the HR
department, including large ERP modules by SAP, Oracle or Microsoft, and more niche
solutions per functional domain.

What does an HR consultant do?

Human resource consultants are generally hired by three types of clients. Firstly, HR
advisors support HR directors and managers of client organisations with improving the
performance of the HR function - examples include implementing an HR business
partner delivery model, redesigning HR processes or implementing a HRIS system.
Secondly, HR consultants are hired by clients – business, HR or works councils – to
support broader human capital issues. This can range from providing HR support on
M&A programmes to managing a cultural transformation or developing a new talent
management strategy for critical business functions. Lastly, HR consultants are typically
staffed on large transformations to ensure that the necessary people and human capital
expertise is on board, complementing the traditional 'hard' functional skills that are
already part of the project. In this case, the client is often an internal consulting
 department that leads the delivery of the engagement. For example: a Finance
Transformation programme at a client will be led by the Finance service line, which will
subsequently call upon human capital consultants to lead areas such as leadership
alignment, change management, learning and communication.

The job duties/responsibilities of HR consultants often include:

 Advising management on the administration of human resources policies and

procedures

 Serving as internal consultants by analyzing a company’s current HR programs and

recommending solutions

 Developing, revising, and implementing HR policies and procedures

 Ensuring HR programs and services are in compliance with established policies and
procedures and state/federal laws and regulations

 Preparing and maintaining reports related to specific HR projects

 Assisting with the development and coordination of recommended changes regarding

workflow

 Developing methods for compiling and analyzing data for reports and special projects

 Conducting audits of HR activities to ensure compliance

 Presenting training sessions related to specific HR program

Nature of the Work:

HR consultants are basically small business owners and must have the same traits as
any other entrepreneur. These include:

 Ability to work independently.

 Basic business management skills—such as accounting, office management and
customer service.
 Ability to market services.

Business Management:

HR consultants must be adept at managing their business as entrepreneurs and using

their time efficiently when no one is driving them but themselves.
 Some key business considerations for HR consultants include:

 Areas of focus: Determine whether the consultancy will provide general or specialized
HR services, and identify services that will be provided.
 Target market: Determine the target market to be served (e.g., industry, geography,
main point of client contact).
 Legal structure: Determine whether the business will operate as a sole proprietorship,
limited liability corporation (LLC), S corporation or other entity.
 Management team: Decide whether the consultancy will be operated independently, or
whether staff—or partners—will be necessary to meet client needs.
 Financial: Identify revenue and expense expectations and establish a preliminary
budget for operations.
 Administrative: Determine how business operations will be managed, including such
matters as invoice management, collections and tax considerations. Identify necessary
outside resources (e.g., legal, financial).
 Insurance: Identify insurance needs, which include health and life insurance as well as
professional liability insurance. The type and level of coverage selected will be based on
the HR consultant's financial situation, level of exposure and degree of acceptable risk.
 Licensing: Determine licensing requirements. States, as well as many cities and
counties, have different rules about business licenses. HR consultants should check with
the appropriate agencies to determine requirements for doing business in their area.

Desired Competencies for Today’s HR Consultants

In addition to possessing advanced business and human resources skills and knowledge,
successful HR consultants must possess a number of competencies:

 Self-confidence: HR consultants must be sure of themselves if they are to impart their

wisdom and know-how on others.
 Theoretical and practical knowledge: They must have the experience necessary to
understand what solutions have worked in the past and about how to improve upon
past mistakes.
 Ability to explain ideas and concepts in a simplified manner: HR consultants
understand complex ideas in HR, but they must be able to simplify and explain
problems and solutions in terms everyone can understand.
 Ability to improvise: Because organizations are always evolving and changing, HR
consultants must be able to foresee and implement multiple solutions.
 Excellent listening skills: Before solutions can be discovered, problems need to be fully
understood. Therefore, HR consultants must carefully listen to the needs of their clients
as to implement solutions that address their specific needs.
 Trustworthy: HR consultants must be able to develop a strong relationship with their
clients, and to do so they must display integrity as to build trust.