Peter Drucker once said, “Do what you do best and outsource the rest.” This saying perfectly applies to small and micro-businesses that need HR consultancy services but are too small to have an in-house HR manager. SME owners often face problems in keeping up with the rapidly changing employment law. As a result, they may unwittingly leave themselves open to legal action by disgruntled employees if they fail to follow HR procedures.
Handling recruitment can also be time-consuming, taking the business owners away from essential business operations. In a recent study, NatWest found that 95% of small businesses experienced difficulties when recruiting staff members.
Outsourcing HR consultancy services makes sense for small businesses facing such problems. However, it is crucial to ensure that the service provider is efficient, working well for the business in question. Otherwise, it could cost the SME money without generating any tangible results or even weaken the business’s position and expose it to risk.
Here is how small businesses can avoid common mistakes while outsourcing HR consultancy services:
One-Size-Fits-All Approach
One of the most common mistakes made while outsourcing HR is opting for a one-size-fits-all approach. Some outsourced HR firms follow this strategy, offering standardised HR services to all businesses, regardless of their specific needs. The result is a lack of tailored service that fails to meet the SME’s needs.
To avoid this, SME owners must be clear about their business needs upfront. They should choose an HR consultant that understands their business and what they want to achieve. The consultant should be practical, business-driven, and responsive, taking the time to understand the SME’s requirements.
Lack of Flexibility
Small businesses require HR consultancy services that provide flexibility. This means the consultants should be able to support difficult situations by physically coming to the business’s site, and not restricted to phone advice only. If the HR provider lacks flexibility, the business will have to pay twice to get someone else to visit them physically. The consultant should also think out of the box when solving issues.
Poor Quality HR Advice
Many HR consultants offer correct but flabby advice, which can create more problems than solutions. Small business owners need practical HR advice that highlights what they can do instead of what they can’t do. SME owners must verify if the consultants have the right skill sets to address their specific requirements. They should also enquire about their qualifications and experience in light of the ever-changing employment laws.
Long Contracts
SME owners must avoid long-term contracts that require a significant notice period for termination. The terms and conditions of the contract should allow for termination if issues arise, rather than chaining the business to an unwanted provider.
Unnecessary Insurance Cover
HR consulting firms often hedge against tribunals with insurance, which can lead to problems. The advice given by the consultant can be more in favour of avoiding tribunal claims than protecting the SME’s interests. The SME owner should not underestimate the frustration that arises when advisors try to prolong a process by insisting on another medical report. Instead, SME owners should seek a quality provider that offers advice to limit risks.
When looking for an HR consultant, SME owners should ask questions to ensure that the advice and support given are expert, practical, and delivered on time. The right provider should have professionals who can work with the business successfully. SME owners can seek recommendations from experienced business friends and colleagues and verify the consultant’s qualifications, experience, and professionals’ capabilities.
Outsourcing HR consultancy services makes sense for small businesses. SME owners should look for service providers that offer tailored, flexible, efficient, and practical advice. The consultants should have a good track record in handling tribunal cases and an easy-to-terminate contract with no unnecessary insurance coverage.
