Implementing a payroll system, designing benefits packages, recruiting new talent – the list of HR responsibilities can quickly mount as businesses grow. Employers don’t always have the time to focus on all these tasks, nor can they always afford to hire additional help. In such cases, human resources consulting services might be a viable solution.

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What is HR consulting?

HR consulting is a strategic advisory service designed to help employers execute critical HR functions without undermining the capabilities of their in-house HR team if they have one. Consultants may be generalists, providing help with a broad range of HR needs, or they may specialize in one particular area, like talent management. Their services are often needed during implementation, integration, optimization or change management.

What types of HR consulting services exist?

HR consulting services may include but are not limited to the following:

  • Human capital management (HCM) – strategizing workplace culture, organizational structure, workforce management, and diversity, equity and inclusion (DE&I) to meet HR goals
  • Compensation management – setting pay ranges that are competitive and equitable
  • Benefits administration – managing group health benefits, retirement plans and other voluntary or ancillary employee benefits
  • Talent management – recruiting new hires and managing workforce performance and employee engagement
  • Learning and development – educating and training employees so they can grow with the organization and support its objectives
  • People analytics and reporting – using HR data and insights to drive decision making and anticipate future workforce needs
  • Payroll technology – implementing or integrating payroll and HCM solutions to streamline workflows
  • Compliance – ensuring that policies and procedures follow all applicable federal, state and local regulations

Organizations that benefit from HR consulting services

HR consulting services are flexible enough to support businesses of all sizes, from small companies to large enterprises.

Benefits of HR consulting services for small business

Small businesses might not have the expertise or resources in-house to manage HR, payroll, benefits and talent effectively. They may rely on small business HR consulting services to help with a single project, such as rolling out a new employee benefits package. Or, they may seek long-term support if they lack an HR team of their own.

Benefits of HR consulting services for enterprises

Larger companies are likely to have a comprehensive HR department with trained personnel. Yet, sometimes, they may want a fresh perspective from a strategic partner. An HR consultant can offer insightful recommendations for process improvements and change management.

What to look for in HR consultant companies

When employers find themselves in need of an HR consulting company, they might want to look for those who have experience in the following areas:

  • Communication
    Understanding and addressing a client’s HR issues requires meeting and interacting with many people across the organization.
  • Experience
    A strong track record of client success and thought leadership in the HR industry are important factors to consider when partnering with an HR consultant company.
  • Employee relations
    Inspiring next-level performance from employees takes good leadership and motivational skills.
  • Technology
    In-depth knowledge of payroll and HCM software programs is a must for succeeding amidst tough talent markets and ever-changing industry regulations.
  • Decision making ability
    HR consultants must be capable of recommending organizational change and making decisions that can impact a company’s future.

Frequently asked questions about HR consulting

What does an HR consultant do?

HR consultants help employers more effectively manage HR administration. Their responsibilities may include both tactical and strategic activities. From advising clients on leave of absence policies to providing change management strategies during an acquisition, consultants deliver a wide range of impactful services.

What are the types of HR consulting services?

Consultants can be HR generalists who specialize in a broad range of HR functions, or they can be HR specialists who cater to one particular area. HR consulting services can also be provided for short-term projects or long-term overhauls.

What is the difference between HR consulting and management consulting?

HR consultants and management consultants both strive to improve processes and solve problems for their clients. The difference is that HR consulting is narrowly focused on human capital (HR, payroll, benefits, talent), whereas management consulting may address wider-scale business issues, like increasing revenue.

Whom does a human resources consultant work with?

When advising a client, an HR consultant may work with business owners, finance leaders, IT specialists, attorneys and HR professionals.

This guide is intended to be used as a starting point in analyzing HR consulting. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.