WHAT IS HR CONSULTING?
In simplest terms, HR consulting can be defined as a group of HR experts (usually a business) offering their expertise to other businesses who need it.
According to a recent study by Consultancy.org, global consulting today is a $250 billion market, one of the largest in the professional services industry. Within this market, the HR consulting services market is currently estimated to be valued at around $30 billion. These numbers weren’t realized overnight. Years of conscious and deliberate development of this service have led the industry to where it stands today. But why do businesses feel the need to hire 3rd party experts? Is running your HR internally no longer feasible? Or is it just one of the cost-effective solutions?
Managing one’s HR has never been a core function of any business. Unlike departments like sales and marketing, it is treated as an auxiliary function that does not contribute directly to the growth of the company. But having said that, the opposite idea of not having an HR department is also not practical. All businesses need HR to ensure smooth operations. HR management is necessary to fill in talent gaps, keep the workforce motivated, address employee concerns, and drive company culture. However, as inflation keeps tightening its grip around humanity’s neck, the idea of running a fully functioning HR department in-house is starting to seem more and more absurd with each passing day because HR, as a whole, is seen as a draining source of time, money, and efforts of all those who are involved behind making it a success.
Many businesses today do the smart thing and outsource difficult functions of their HR to 3rd party experts. Take recruitment as an example. It is a highly time-consuming and expensive task to find relevant talent. It can take up to 2 to 3 months to find, select, onboard, and train a new resource before they can start contributing as per company standards. Of the aforementioned duration, a majority of the time and money is spent on just finding the right person. When such tedious tasks are outsourced to HR consultancies, businesses save a lot of time and resources, which can be diverted further towards other meaningful purposes like building reward programs or developing flexible appraisal strategies.
Let us now look at some other unique ways in which HR consultancy services can help your business save resources and grow faster than your competitors.
- EXPERTISE: Not everyone can be good at everything. The most obvious reason for this statement being true is that it takes a lot of time and dedication to gain experience, which leads to expertise. HR is a big umbrella consisting of different functions like recruitment, payroll processing, performance management, labor law compliance, regulatory compliance, compensation and benefits, learning and development, employee development management, etc. In a typical HR team on the company payroll, achieving expertise in all these sub-functions of HR can be a challenging hurdle to cross, if not outright impossible. In specific functions like regulatory compliance management, it becomes even more difficult to keep up with constant changes in local, national, and international laws. Therefore, investing never-ending time and resources (internally) in such functions becomes a game of cat and mouse.
Hiring a third-party service provider solves this problem. Established HR consultancy service providers like Exela HR Solutions have an army of professionals who experts in their own sub-function. This way, you never have to worry about playing catchup with changing labor laws or spend two months finding the right person to fill up a position. Experts get it done for you accurately and on time.
Also Read: Human Resources | A Peek into the Future
- EFFICIENCY: Let us look at an example of recruitment – you building a team in-house vs. you hiring an HR consultancy service provider. Let’s assume you need to hire 13 customer service representatives and one manager in the next 45 days. The first thing you look at is the budget allotted for this hiring activity. Now let’s assume you decide to run this activity in-house. You will need to hire talent acquisition professionals who will be on your payroll full-time. Then you will need to train these professionals, get them acquainted with the business, team-specific needs, etc. Then, sort them according to their expertise. TA specialists who are good at filling up technology positions will work with technology department leadership while TA experts who are good at filling up operations positions will work with the managers who manage the operations department. Then, you will have to spend more money and time on getting the right HR tools for your team, train the team on the new tools, and then wait while they work their magic.
You spend money on salaries, HR tools, and training costs. Then, you wait until you get a set of applications. Your team sorts through them, shortlists a few, engages in multiple rounds of interviews, and then finally makes an offer to a few of them. More often than not, people will not accept the offer as they get a better offer somewhere else. If that’s the case, you then need to start the entire process again.
Now let’s assume you decide to outsource this activity. You speak to a few HR consultancy service providers and choose to pick Exela HR Solutions. Once all the formalities and agreements are completed, our experts will get on a call with the decision-makers in your organization. We will note down your requirements, your terms and conditions, offerings, brand image information, deadlines, and other related information. Your job ends here. We then start the search for you using our specialized networks, advanced HR infrastructure, and tools. Within a few days, you will begin receiving thoroughly vetted interested applicants from who we have spoken with first, before sending them your way. Once your decision-makers give the go-ahead, we instantly begin the onboarding and training process of your candidates.
The biggest advantage you will notice with expert HR consultancy service providers like Exela HR Solutions is that services like these are both time-efficient and cost-efficient. You get results quicker because of the expertise of the professionals you hire, and you pay only for what you get, that is, people. As a result, you save on all extra costs like buying expensive HR tools, training costs, and salaries. All the saved resources can then be easily invested towards the growth of the business. - COMPLIANCE: Keeping a business compliant with local and global laws is daunting. New laws like GDPR & CCPA are introduced every once in a while, existing ones keep changing, and your business is expected to keep up with all of them or risk getting fined heavily.
Running compliance management in-house can be a very costly project since you need to hire the best people in the business with large salaries who can take up this important responsibility of keeping every department of the business compliant at all times – a never-ending process. In addition to the large salaries of the experts, other compliance-related costs like administrative costs, enforcement costs, equipment costs, material costs, external services cost, fines for accidental delays or inaccurate filings, and the cost to maintain a culture of compliance within the organization add up quickly, increasing the financial burden of your company.
Most of the time, when you hire a third-party HR consultancy service, these costs are greatly minimized since you pay only for one service, usually on a per-hour basis, as opposed to setting up everything from scratch. This again gives you a great opportunity to save resources and implement them into the core functions of the business like sales, R&D, marketing, etc.
Conclusion: Running everything in-house sure is convenient as it gives you a greater degree of control, however, it also increases your liability and the cost of running your business. Exela HR Solutions makes your decision to switch a no-brainer because you have full control while your costs are minimized to a very large extent. Get in touch with us to start your real growth journey today!
Sources: google.com | en.wikipedia.org | yourstory.com | consultancy.org | pideeco.be | digitalguardian.com
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.
