HR Consulting Services for Small Business

The Milestone Team May 31, 2022
Consulting Services Small Business

HR consulting, or outsourced HR, is a powerful business strategy to give your business a competitive edge. Many small business owners fall into the trap that essential business functions, like HR,  should be centralized within their own business. They believe HR is more likely to be done right if it’s done themselves. 70% of smaller companies have ad hoc HR managers or employees who take on HR in addition to their day job according to this study. Most often, the owner takes on this responsibility. 

Keeping up with changing compliance regulations, knowing payroll differences, and providing competitive benefits is demanding.  Balancing these tasks alongside the other demands as an owner prevents your business from being more efficient and your employees from being empowered. The balancing act also frequently leads to mistakes or less quality work. From compliance to payroll to talent management, accessible expertise for one of your company’s HR functions is a meaningful advantage of HR consulting.

HR Consulting Services

HR consultants and outsourced HR companies differentiate themselves on the different kinds of services they provide and how they engage with their clients. The different types of services are listed below. Firms may provide one or more types of consulting services. Other differentiators between firms include technology, experience, cost, and quality of work.

Common Types of HR Consulting Services

Software-as-a-Service HR Outsourcing (SaaS): SaaS HR outsourcing uses a computer program to automate basic HR functions. Typical examples are applicant tracking, payroll, or benefits management automation.

Business Process HR Outsourcing (BPO): BPO HR outsourcing hires a third-party vendor to complete a single HR task such as payroll or compliance. These vendors usually provide software as well as service management.

Single Source HR Outsourcing: This type of outsourcing is a total takeover of the employee life cycle by one third-party company. This includes hiring, onboarding, benefits, payroll, and separation processes. However, The third-party company does not necessarily own the decision-making process for employee release.

Shared Services HR Outsourcing: Shared services is a cross-functional approach to HR outsourcing, where functions shared by multiple departments are outsourced. Examples include training and professional development or administrative functions like accounts payable and receivable being folded in with payroll administration.

Professional Employer Organizations HR Outsourcing (PEO): In PEO outsourcing, the third party assumes co-employment for employees. They take on responsibility for benefits, taxes, payroll, and compliance. This arrangement can provide small businesses access to more competitive benefits or pay through this third-party company than they could provide on their own. In some arrangements, the PEO can set their own standards and rules for employees, share hiring rights, and release employees. 

List of HR Consulting Services

  • HR Regulatory and Compliance 
  • Talent Acquisition
  • Talent Lifecycle and Management 
  • Talent Development
  • Total Rewards-Compensation and Benefits
  • Employee Engagement
  • Strategy, Planning, and Infrastructure
  • Data and Analytics

These are the overarching consulting services categories. Smaller components can be outsourced such as payroll under the total rewards category. Each of these services depends on the type of outsourced HR agreement. For example, SaaS companies are not fit for a complete takeover of a service such as employee engagement, but they may provide tools to aid this service. For more in-depth information on these services, check out our blog on HR services.

What Services do HR Consultants Provide?

Professional HR consultants provide various services for corporations and small businesses, including education, training, and human resource solutions. A consultant is responsible for business research, analysis, planning, and management consultation. Clients hire HR consultants to help them develop robust business and human resource guidelines for long-term success. HR outsourcing companies for small businesses can provide crucial support when a small business is beginning to grow. Small businesses constantly try to be efficient and effective but cannot always afford to hire a full-time HR to eventuate. HR consulting firms can match you with a consultant based on your needs and budget and even create HR consulting services packages shaped to best fit your needs. Many small business owners have begun to ask themselves, “Where can I find an HR consulting firm near me?” HR consulting has already become a highly in-demand option for many small businesses. As long as you find a consultant firm that fits your needs, you can continue to develop successful HR policies and resources for your small business.

HR Outsourcing Companies

What Companies Outsource their HR

Businesses of all sizes outsource their HR. Companies as big as Amazon outsource their payroll, or local, small businesses use it to improve their function. Overall, companies that outsource their HR understand the advantages of outsourcing HR for their business. Check out a few of our over 250 clients to get an idea of the type and size of businesses we serve. 

What Does an Outsourced HR Company Do?

What Does an Outsourced HR Company Do

HR outsourcing companies combine the type and service with a relationship to help improve the HR functions. They provide accessible expertise and experience to solve HR problems. HR consulting companies have three main goals:

  1. Provide HR Services– Outsourcing companies must meet the needs of their clients. They need to deliver on their goals, KPIs, and services. 
  2. Build a strong relationship with their client- Outsourcing companies should communicate, be transparent, and work with their clients in a way that builds trust. A great outsourced HR company will feel like a part of the team. 
  3. Build a competitive advantage- Whether this is taking administrative functions to give the owner more time to focus on core competencies or advising on areas of improvement for HR, outsourcing companies should help small businesses stand out and be more agile.

Contact Milestone today to learn how HR outsourcing can benefit your small business. 

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