Why Organizations Should Consider Human Resources (HR) Consulting
November 01, 2021
By Elana Margulies-Snyderman
Firms without a dedicated human resources (HR) department should consider HR consulting to enhance how they manage human capital. Through HR consulting, firms reap tremendous benefits without the hefty expense of dedicated HR staff including real-time HR and organizational development resources that are more cost-effective. Further, since C-suite leaders do not have time to stay informed on current HR issues and attend to the demands of people management, HR consulting fills this void.
What is HR Consulting?
In a nutshell, HR consulting creates an organizational roadmap detailing the firm’s business goals. It pinpoints issues and opportunities in its current strategy and recommends adjustments. It also implements policies and procedures that address critical business needs. Further, it leverages technology to streamline HR functions and implement best practices. Finally, it seeks to enhance employee engagement to reduce turnover.
- Performance management design and implementation;
- Career coaching;
- Job and competency design;
- Industrial relations coaching and guidance;
- Recruitment, hiring, onboarding and orientation design;
- Effective reduction-in-workforce design and implementation;
- HR best practices: process review, design and implementation; and
- Organizational design.
HR best practices span across four areas:
- Talent management: Utilizing behavioral-based interviewing skills and assessments to determine the right cultural fit for an organization.
- Performance management: Utilizing a tool to give feedback on employee performance and foster communication between management and employees; training executives, leaders and managers to monitor expectations.
- Leadership development: Identifying employees with the potential for firm leadership roles and putting together individual development plans to get them ready for that next level.
- Policy and procedure development: Developing a committee of leaders to develop future firmwide employee policies, i.e., an employee handbook.
Matthew Kerzner, Ph.D., managing director in the Center for Individual and Organizational Performance at EisnerAmper, said organizations should consider HR consulting since many employees, without knowing, execute daily HR operations, but never take time to strategically think about human capital to best position the firm for success.
“A strategic HR person may not be at the same level as a C-suite executive, but utilizing a consultant can help with the organization’s mission, values and vision to make sure firms keep human capital top of mind,” he said.
Organizations that benefit from HR consulting
Firms that are the best candidates for HR consulting include:
- Medium-to-high growth small companies (growing, pre/post-company transactions with $50-$300 million in revenue);
- Middle market private equity firms who need to conduct due diligence on portfolio companies;
- Smaller organizations;
- Mature companies which seek to change culture, efficiency and people;
- Companies looking to grow talent via M&A activity;
- Organizations experiencing compliance issues or seeking risk mitigation for such;
- Organizations looking to manage labor relations matters;
- Organizations who need to compete for talent due to work shortages; and
- Organizations who want to reengineer HR processes to align with new technology.
“When a company/organization leader realizes HR isn’t meeting their needs or there is a significant issue/incident that has gotten their attention about the inadequacies of the HR function, they need a thorough and efficient method for figuring their ‘current state’ so they can create a roadmap for their ‘future state,’” Kerzner said. “They don’t have a lot of time to do this, nor the expertise, and their legal counsel to whom they have turned for ‘people stuff’ are not equipped to provide this expertise -- or they think they do and are eager to bill more business.”
Strategic HR consulting has tremendous benefits for organizations including assisting an organization before a liquidity event to keep people together, conducting succession planning in the case of a family business or getting the next generation of leaders ready in to lead a company. However, organizations need to be mindful that strategic HR consultants don’t make managerial decisions. The leadership has to make the final call after testing assumptions from consultants.