While your HR team works diligently to provide the quality standard of service your employees have come to expect, an HR consultant can provide a helpful assessment as you consider onboarding new policies, starting new projects, improving retention, or revising your organization’s HR philosophy.
Read more about HR Consulting below.
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Consultants are often the catalyst of meaningful change within an organization. This is due to the simple reason that they bring an outside perspective for a group of people who are focused on driving growth and success through day to day operations. The same is true of HR consultants. While your team works diligently to provide the quality standard of HR services your employees have come to expect, an HR consultant can provide a helpful assessment as you consider onboarding new policies, starting new projects, improving retention, or revising your organization’s HR philosophy.
Consider the many working components and responsibilities of your HR department—from compensation, payroll, and benefits to employee engagement, satisfaction, and development. That’s a lot to ask from your HR team or an HR individual, for that matter. For a department responsible for your most valuable resource—your people—it’s easy to fall into patterns of attention overload where little to no improvement gets made beyond everyday responsibilities.
Consultants provide unique solutions for companies. They work with small businesses and corporate organizations to provide direction on important affairs such as talent acquisition, employee lifecycle, employee management, total rewards, and more. Their primary purpose is to help develop the long-term internal policies and processes appropriate for your organization at this point in its development.
What is HR consulting?
Businesses rely on outsourced HR consulting for two primary reasons:
- To receive an outside, expert perspective on their HR practices.
- To bring in experts to work alongside their team to execute an HR initiative.
The first is known as expert resource consulting, and the latter is known as process/people consulting. Both are forms of supplemental leadership—inviting a knowledgeable consultant into your practice to provide critical advice and direction on your HR needs.
HR consulting services for small businesses can be the expert help a CEO or under-resourced HR manager needs to tackle a project or implement HR change. An HR consultant provides strategic advice and can help execute critical, time-sensitive changes within the organization. For example, developing a new employee onboarding system.
For corporate entities, a team of consultants can evaluate current HR practices and performance in any given area—talent acquisition, for example—and provide a neutral assessment and prescription to improve policies, practices, and strategy.
Almost any HR development that challenges the status quo within your organization will be charged with historic biases, office politics, and potential resistance to change. Working with an HR consultant provides needed relief to whoever in your organization is tasked with moving your policies or services in a new direction. Consultants offer a welcomed neutral leadership to organize your team under one united umbrella for the simple fact that they have less investment in long-term employment with the company.
So what does it look like to hire and work with an HR consulting firm—or what should it look like?
How do HR consulting firms work?
HR consulting firms will generally follow a process, not unlike any other outside supplemental counsel brought on to direct a project. For HR, there are four distinct phases for consultancy: discovery, analysis, recommendation, and implementation.
- Discovery Phase – An HR firm will want to align with the business to define expectations and desired outcomes. Often, this process is as simple as discussing problems, issues, goals, and roadblocks. A series of interviews with your HR team or leadership will help the firm understand your strengths, weaknesses, and opportunities.
- Analysis and Solution Phase – HR consults will enter into the analysis phase where they collect and analyze data. HR consultants then present their findings to the organization’s HR team and leadership. They propose multiple solutions which have varying levels of investment, change,
- Recommendation Phase – Based on the organization’s constraints and investment ability, the HR firm will make a recommendation of how to move forward, including what steps to take, necessary training, participation, changes in policy, and roll-out.
- Implementation Phase – Especially if working with a people/process consulting firm, they will assist in enacting the strategy among your teams and people.
These four steps can feel fairly high-level, and the details will emerge depending on the situation and needs of the hiring business. The most important part of this process is determining the desired outcome between the two parties.
What does an HR consultant do?
HR consultants provide an important 3rd party perspective to an internal HR team. As individuals, HR consultants can generalize or specialize in regard to the services they offer. Much like a doctor might work in general practice or focus on a specific study, consultants decide how they want to serve their customers, and you will work with your consultant firm to determine which expertise is most applicable.
When working with someone practicing as a general consultant, you may run into some limitations because of a lack of expertise—but you can also lean on them for a host of different applications, perfect for a small business.
When working with someone practicing as a specialized consultant, you get the expertise without the general counsel. Corporate businesses will often hire multiple specialized consultants to assist with their HR outsourcing needs.
The overall goal is to put the right people in the right environment for the highest level of effectiveness.
What services do HR consultants offer?
HR consultants provide a wide range of services. Below is a list of HR consulting services that represent the type of work an HR consulting firm would be able to provide.
- Employee Engagement – This is the broadest category and includes employee development, upward mobility and leadership training, employee performance, corporate structure, training programs, and more.
- Recruitment and Talent Acquisition – How well are you attracting the people you need for select positions, and how competitive are your offerings compared to similar positions at similar businesses? A consultant can help you with these areas.
- HR Auditing and Compliance – Consultations can review all your practices to ensure you are compliant and HR practices are working towards company goals. In the long run, this prevents state and federal penalties.
- Total Benefits Strategy – Are your employees properly incentivized within the organization with a compensation process that’s transparent? Does your organization view how to compensate employees holistically including benefits?An HR consultant can help evaluate and revamp a total rewards strategy if necessary.
- Mergers and Acquisitions – A third-party consultant is valuable to wade through the process of employee management during important changes within the organization.
- Succession and Organization Strategy – Prevent any talent or skills gaps during transition times. Create talent overlaps within the organization’s structure.
There are many ways consultants can serve your organization, and this circles back to the need for your business to clearly define its desired outcome from working with a consultant.
Are HR consultants in demand?
The market size of the HR consultancy industry, measured by revenue, is $24.6 billion in 2022, which represents a 2.6% increase. These numbers don’t reflect an especially large change in the industry over the last five years, but there have been notable changes to the job market that have increased the need for more HR talent, both in-house and from consultants.
During the pandemic, the number of job postings for HR professionals spiked 87%. The need for HR employees to navigate changes became exponential. And, now, the changes to the job market will likely require businesses to lean on the help of HR consultants for the following reasons:
- Increased remote work and adjusting to redefined company culture.
- High turnover and low retention rate are causing instability.
- Increased demand and compensation for positions, raising the need for talent acquisition.
- New technology implementation requires competent HR expertise.
- Raising inflation forcing companies to revise total rewards.
How much does it cost to hire an HR consultant?
Just as consultants are hired for a wide range of services, they charge variable rates depending on the work and scope of the project. Just consider, for example, the different fee structures you might use with a consultant or firm:
- Rate per hour
- Monthly retainer
- Flat project or contract rate
- A daily rate (half-day)
It also matters which type of work you’ll be having a consultant help with. For example, if they are working on recruitment, what is the salary level of the open positions? That might indicate a percentage of what a consultant will charge.
Ultimately, it’s up to the consultant to determine rates, but you can expect to pay in the range of $100-$200 an hour.
When should I hire a HR consultant?
HR consultants are especially talented in identifying problems within an organization’s structure. The sooner they can become a part of the discovery process, the sooner you get to developing solutions for HR needs. A good gauge of when to bring on a consultant is whenever you or your HR team express trouble defining why certain processes aren’t working as expected.
For example, when the turnover rate exceeds previous numbers and there aren’t definitive reasons why consult a professional to help conduct an audit to discover what processes might be leading to a high turnover or low retention.
How do I choose a HR consultant?
Ultimately, choosing an HR consultant will come down to how well you believe a consultant will be able to reach desired outcomes for your HR needs. You require expertise for a problem you know you have, and a good HR consultant should be able to outline specific steps that the organization should take to achieve solutions. Because expertise is an important part of the value you get from a 3rd party perspective, it’s important to evaluate the experience of the consultant you are working with – have the successfully solved this issue for another client?
At Milestone, we understand the importance of knowing our clients’ needs on a specialized level to provide unique HR solutions that are effective. We work with your internal human resources professional to provide needed support and guidance, but we also have the capability to conduct entire HR directives ourselves, providing the necessary consultancy you need.
Our goal is to make credible improvements that will continue to benefit new and current employees and the overall health of your business. We assist with strategic HR initiatives, employee engagement, and help provide monthly HR support so any changes to your HR strategy receives the consistent support it needs. Want to learn more?
Contact us today at Milestone and start a conversation that could lead to impactful change in your business.