Q&A talks about the challenges of human resources department staffing with , partner, Your Part-Time HR Manager LLC in Exton, Pa.
Q: How difficult is it to make the transition from full-time human resources person to a consultant after being laid off or let go?
A: The difficulty of the transition is in an HR professional’s area of expertise and target market. Many HR professionals have spent years in a specific aspect of HR such as labor relations, organizational development, compensation, etc. As such, they market their expertise to companies that need that skill set. With regard to target market, there is a difference in the needs of the small to mid-sized business (SMB) and the needs of companies with more than 200 employees. It is easier to sell a specific project to a large company because the large company already has an HR staff to handle the implementation of the project. In the SMB market, an HR consultant needs to provide a full spectrum of HR services and must be the implementer of those services.
Q: There’s more to setting up a consultancy than just hanging a shingle. What are the first three things somebody should do to become a human resources consultant?
A: First, the person needs to identify the range of HR services that will be provided within his/her level of competency and the pricing structure for those services. Second, one must select a target market and spend some time researching price sensitivity and competitors. Third, decisions need to be made about the sales and promotional aspects of the consultancy relative to website, logo, sales tactics, promotional literature, etc.
Q: As you point out, the human resources role at small companies is frequently an after-thought and handled by people like the bookkeeper, CFO or payroll clerk because companies don’t want to spend the money. How does an outsourced HR consultant convince a company to make the investment?
A: We take a three-pronged approach (i.e., compliance, employee engagement, and increased productivity) to convince the SMB market of the need for HR. With regard to compliance, federal and state laws are changing at an unprecedented rate. The ability to stay current with these changes requires a commitment of time that the average small business CFO or CEO cannot afford. Relative to employee engagement and increased productivity, small businesses do not need an HR consultant who becomes a “labor law police officer” telling employees and managers what they can and cannot do. HR needs to deliver to small businesses employee relations initiatives that place SMBs on a level playing field with Fortune 500 companies. As such, HR needs to show how non-traditional approaches to performance standards and employee expectations can help a small business out-behave its competitors and dramatically improve the finances of the business.
Q: Why do some companies hold human resources in such low regard? If a company’s most valuable assets are its employees, then why not invest in the people who help the employees?
A: Unfortunately, many companies believe that HR is just hiring and firing. It is true that a good percentage of HR revolves around “getting the right ones on the bus and the wrong ones off the bus.” But better than 60 percent of what HR does involves “keeping the right ones on the bus” with ongoing programs that can provide major competitive advantages to SMBs. Without prior knowledge of how HR can improve profitability, we are often victims of “We don’t know what we don’t know.”
Q: A lot of sales is involved as a consultant with lots of marketing and networking. Can that be taught? Is it easier or harder for an HR veteran to adapt these skills?
A: There is a difference between transactional selling of products and the consultative selling of services. I often tell HR professionals that selling is a learned process. Just like there is a process for starting a business, there is a process for selling based on the product/service and the target market. For the SMB market, we use a low-key, viral/educational sales approach that we call process-oriented selling. A consultant does not need to learn fancy selling gimmicks or tricky closing techniques. Additionally, we do not use telemarketing (i.e., the old “dialing for dollars”) or mass mailings. We tell our consultants that if they are knowledgeable about HR and are willing to follow our viral/educational sales approach, they can execute our sales system with great success. In fact, we have found that the best salespeople for consulting services are not the traditional “hunter salespeople,” but rather the “farmers” who execute an inquiry-based sales approach.
Q: What was the genesis of Your Part-Time HR Manager?
A: Based on the 2004 U.S. Census Data, there were 5,885,784 companies in America of which 4,980,165 were businesses with 1 to 99 employees. A small business with 1 to 14 employees must comply with 16 federal laws, without even considering state laws. We first recognized the need in the SMB market for baseline labor law compliance to protect the assets of SMBs. Second, we discovered that the SMB market is “starving” for reliable and proven programs that can increase employee engagement and productivity as well as the bottom line. But, just giving SMBs programs and saying, “here, go implement” won’t work. The HR consultant must play an active role in the ongoing implementation of the program otherwise the managers in SMBs get busy with other things and the program dies a slow death.
