By: Bob Burbidge

The Rise of HR Consulting

Scott Adams, author of the comic strip “Dilbert” has been poking fun at consultants in the form of a dog (“Dogbert”, the consultant) and a cat (“Catbert”, the evil HR Director) for more than 20 years.  Those of us who work in small businesses have had some laughs at Adams’ ridicule.  But as Oscar Wilde once said “Ridicule is the tribute paid to the genius by the mediocrities.”  Considering recent trends, the musings of the comic Adams and the playwright Wilde have pointed to an emerging trend in the business services sector – HR Consulting.

Per CNN Money, the HR Consultant is listed as #43 on the list of top 100 jobs in America.  As reported by Investopedia in 2010, the overall growth of the field is expected to increase 22% by 2018, according to the Bureau of Labor Statistics.  So why all this attention for HR Consulting?   The reasons are plentiful. Here are just a few of the HR challenges facing small businesses:

  • Fair Labor Standards Act (FLSA)
  • Comprehensive Omnibus Budget Reconciliation Act of 1985 (COBRA)
  • Occupational Safety and Health Act (OSHA)
  • Employee Retirement Income Security Act (ERISA)
  • Labor Management Reporting and Disclosure Act (LMRDA)
  • Family Medical Leave Act (FMLA)
  • Consumer Credit Protection Act (CPCA)
  • Immigration and Nationality Act (INA)
  • Health Insurance Portability and Accountability Act of 1996 (HIPAA)
  • Patient Protection and Affordable Care Act (PPACA)

And the news for the small business owner is getting worse when it comes to employee relations.  In an article written for Bright Hub, Jean Scheid cites her sources as stating the following in Lost an Employee Lawsuit? Join the Club: “Employee lawsuits have risen 400% in the last 20 years, and of those lawsuits 41.5% are private employers with between 15 and 100 employees.”  Based on trends, it is clear that HR Consulting is something to consider for the small business owner.

Is HR Consulting  The Solution?

For some, employing an HR Consultant may be a wise investment.  However, as it is with all consultants, they are only as good as the advice they give.  While their advice may be good, what if it’s not?  Who is left to pick up the pieces if something goes wrong?  As it is with any business consultant, the business owner would likely be the real victim.  Also, the reality is that HR Consultants generally have an area of expertise that is limited to a narrow skill set.

Would a Team of HR Consultants Be a Better Option?

As a one-time Little League coach, I used to tell our kids that there is no “I” in “TEAM”.  So what might happen if you were able to employ a Team of HR Consultants?  Your team might look something like this:

  • Certified payroll expert
  • Employee benefits manager
  • Employee relations specialist
  • Unemployment state tax management expert
  • Risk Manager
  • Workers’ Compensation administrator
  • Federal and state legislative HR specialist

More importantly, if an HR Consulting Team is important, but having a partner who shares in the risk if things go wrong is also compelling, a Professional Employer Organization (PEO) may be the answer as it provides both.  The PEO model is one that employs a co-employment arrangement that partners your business with the PEO.  This partnership provides everything a small business owner needs to grow, prosper and sleep well knowing that their HR partner is standing watch.

What Is The Right Solution?

As a lawyer might say, “it depends”.  If you seek specific or short-term advice, a seasoned HR Consultant with a proven track record might be all you need.  If you want someone who has “skin in the game”, then the teamwork approach offered by a PEO may be the way to go.  To be sure, the following should be considered when contemplating a PEO partnership:

In many ways, comparing an HR Consultant with the PEO model is more like comparing apples and oranges that it is cats and dogs…with all due respect to Scott Adams.