Do you need a HR manager or a consultant?
HR is crucial for every business, but it can be difficult to know which service suits your business model. This article dives into the differences and benefits of hiring a HR consultant compared with a HR manager.
HR consultant vs HR manager: What do they do?
Imagine you own a race car and your goal is to win the championship. Any successful racing team needs a fast car and people with complementary skills. While each skill is different, they’re equally important in creating a winning team.
You have the car, the drivers, manager and the mechanics. Wait, how does this apply to your business team?
The race car is your internal team: they’re the engine of your business that keeps things humming. Then you have the manager, like a managing director, they’re responsible for running the business, managing important relationships and setting the strategy.
But then there’s the drivers. A great driver is a people leader; either the managing director or a HR manager, someone who can steer the car in the right direction and keep it on track.
Lastly, the mechanics. They’re the ones who can assess your engine, add new parts and ensure you have enough fuel to compete for the championship.
Just like HR consultants, the mechanic can be both hands-on or strategic. They can help you to fulfill HR functions, but they can also assess your organisation and implement the right people systems. But is the answer a HR consultant? Or are you better suited hiring a manager in-house?
The role of the manager
Naturally, a HR manager is going to head up all the human resources activities in your business. They oversee functions such as compensation, training and development, employee relations and recruitment.
As a small business, the HR manager will likely have to balance admin, strategy and management functions. Juggling all three of these disciplines can be a real challenge for a busy manager.
What about the consultant?
A HR consultant will step in and provide an outside perspective to your business. Offering experience and strategic insight, they can help you identify areas that can be improved and develop a strategic plan to implement.
From compliance to employment disputes, a consultant can draw on all their experience and utilise their professional networks to provide effective solutions.
So, what’s the difference?
A HR consultant will be from the outside and a HR manager is typically hired internally. While this isn’t quite as simple as the outsourcing debate, it does play a part here.
You can hire a consultant to complete many of the tasks that a HR manager would complete on your team. Often-times when the business is undertaking a project or implementing a new initiative.
Furthermore, a consultant will typically be less hands on than a HR Manager. Rather than focusing on day-to-day activities, their focus will be more strategic and ensure that you can make improvements to the business’s engine. Or, potentially fix issues that are hidden under the hood.
In contrast, small businesses tend to hire HR managers who excel at the administration and people management side of HR, but tend to come with less experience and a narrower skillset.
Who’s going to benefit from a HR consultant?
Small businesses benefit from being able to pivot and remain nimble. Rather than locking you into a long-term commitment, a HR consultant provides flexibility. You’ll also be able to avoid the uncertainty of hiring and training a HR manager. Make no mistake, it can be an expensive and time-consuming exercise.
A HR consultant can even act as a hands-on manager within the team until you find that long term replacement. They combine industry experience with the flexibility of an hourly rate or monthly retainer.
What are there benefits of hiring a HR manager?
Firstly, they’re available in your business full-time and can take away the pain of processing payroll, booking leave or managing contracts.
Without this manpower, you’ll likely be doing this admin yourself. By handing it off to someone else, it gives you more time to focus on growing your business.
What are you missing?
The good news? Research suggests that 57% of companies found outsourcing allowed them to focus on core tasks.
There’s the bottom line to consider too. On average HR consultants with senior level experience in New Zealand charge $110 an hour whereas a senior HR manager is a full time salary at an average of $103,051 per annum not including benefits.
So let’s put that into perspective. You could save around $41k every year by hiring a senior HR consultant. This is based off the assumption that a consultant is hired for 20 hours per week at $110 rather than a full time salary plus benefits:
Senior HR Manager: 40 hrs per week ($103,051 per annum)
Senior HR Consultant: 20 hrs per week ($62,000 per annum)
Savings: ($103,051 - $62,000) = $41,051 savings per annum
While the total number of contracted hours may vary, it gives you an indication of the flexibility and cost-efficiencies that consultants offer as you look to scale your business.
What’s the right choice?
Ultimately, if you’re looking for a permanent figure to support and manage day-to-day HR functions in your business, go ahead and hire a HR manager.
However, if you want to implement change or give your business’s engine a service, a HR consultant could be the ideal choice. The added flexibility and experience could take you one step closer to winning the championship.
Are you still unsure which is the right decision for you? Get in touch and we can discuss a solution that works for you.