We each have had the distinct pleasure of building and growing HR consulting firms in both the United Kingdom and United States. We have also written and published books on HR consulting. The path isn’t easy, but it is worth it in the end, and it led us to this conclusion: Anyone who holds a position as an in-house HR professional might benefit from thinking like an HR consultant and asking yourself, how are you adding value to the organizations you support?
The Evolution of HR Consulting
Consulting has evolved from administrative to strategic business partnerships. Focus on the needs of the organizations you support, understand the finances and develop solutions that work well beyond the HR unit. We approach every client as a strategic business consultant—you should too. What can you deliver that will add significant value, quality and cost-saving solutions to the organization? Consider this timeline:
– Emergence of HR as a separate function. HR consulting started to emerge as a separate function in the 1960s and 1970s as companies recognized the importance of having dedicated professionals focused on HR issues.
– Growth of HR technology. The advent of computer technology and HR information systems in the 1980s and 1990s led to a growth in HR consulting services, including technology implementation and integration, data management, and compliance with labor laws and regulations.
– Focus on strategy. In the late 1990s and early 2000s, HR consulting shifted its focus from transactional work to becoming a strategic partner in organizations. This involved helping companies align their HR plans with their overall business strategies and objectives.
– Emphasis on diversity and inclusion. In recent years, there has been a growing emphasis on diversity and inclusion in the workplace, and HR consultants have responded by developing innovative programs and services to help companies build more inclusive work environments.
– Emergence of new HR technologies. The rise of new HR technologies, such as cloud-based HR management systems, has enabled HR consultants to offer new and more innovative services, such as talent management and workforce analytics.
30,000-Foot View of Global HR Consulting
Global HR consulting is increasingly complex. Laws and regulations, economic drivers, and political unrest provide unique challenges and opportunities to every HR consultant globally. Embrace the opportunities presented, but also narrow your focus to the needs in your subject matter expertise. Where do you excel, and what do organizations currently need from your expertise? Focus on both. You must become an expert, there is no easy way to the top.
– The global HR consulting market is valued at $60 billion and is expected to grow at a compound annual growth rate of 7 percent between 2021 and 2028. North America is the largest market for HR consulting services, followed by Europe and Asia-Pacific.
– Talent management and organizational development are the largest service segments in the HR consulting market.
– In the U.K., HR consultants are predominantly independent consultants with a few larger consulting firms. As an example of growth in this market, Sarah has successfully mentored 100 new consultancies since the pandemic began in 2020.
Challenges and Opportunities
Thinking like and becoming an HR consultant presents challenges and opportunities. You are now running a business. Insurance, taxes, marketing and IT are just a few areas that will require focus. We both built our own websites and did our own marketing in the beginning. Both of our books embrace the challenges and opportunities, along with the considerations of starting and growing a firm. Consistency is crucial with any consulting firm. We both write newsletters for our clients; Matt has not missed a week in almost eight years of writing newsletter articles for clients.
Find opportunities and establish a reputation for bringing consistent results when providing solutions.
– Competition. The HR consulting market is highly competitive, with many large consulting firms and boutique firms vying for a share of the market.
– Lack of standardization. The HR consulting industry is not regulated, which means there is a lack of standardization in terms of the quality and scope of services offered.
– Resistance to change. Organizations may be resistant to changing their HR practices and processes, which can limit the demand for HR consulting services.
– Data privacy and security. The handling of sensitive employee data, such as compensation and benefits information, can be a concern for organizations. HR consulting firms need to have strong data privacy and security practices in place to protect this information. Keep in mind that laws are more stringent in some countries than others.
– Digital transformation. The increasing adoption of digital technologies is creating new opportunities for HR consulting firms to help organizations transform their HR processes and practices.
– Globalization. As organizations expand globally, there is growing demand for HR consulting services that can help organizations navigate the complexities of managing a multinational workforce.
– The importance of HR. The growing importance of HR is creating new opportunities for HR consulting firms to help organizations improve their HR practices and processes.
– The gig economy. The rise of the gig economy is leading to new opportunities for HR consulting firms to help organizations manage their contingent workforce.
Becoming an HR Consultant Before and After the Pandemic
The world has evolved over the last three years. Much work can be and is done remotely. We both still prefer face-to-face visits with clients and employees; we build relationships, trust and evolve culture with in-person visits. However, we can work with clients from all over the world. Your skills are needed; embrace the challenge, take the risk.
The COVID-19 pandemic has had a significant impact on the HR consulting industry and has changed the way consultants work. Here are a few ways that the pandemic has impacted the industry:
– Remote work. The pandemic has accelerated the trend of remote work, and many HR consultants are now working remotely from home or other locations. This has changed the way consultants interact with clients and has increased the demand for digital HR solutions. Sarah has moved from the U.K. to Greece to work remotely.
– Focus on employee well-being. The pandemic brought the importance of employee well-being to the forefront, and HR consultants are now increasingly helping organizations address the mental health and well-being of their employees.
– Virtual consulting. With social-distancing measures in place, many HR consultants are now offering virtual consulting services to their clients. This has made it easier for organizations to access HR consulting services, regardless of their location.
– Increased demand for HR services. The pandemic has led to increased demand for HR consulting services, as organizations have had to rapidly adapt to new working conditions and manage the well-being of their employees.
Our books are designed to guide any HR professional through starting and growing an HR consulting firm. We also offer coaching and advice on founding and evolving firms. The books are designed around the SHRM BASK, which meets the needs of organizations globally. Find your niche as a consultant and take advantage of the opportunities. Your knowledge, skills and abilities will change as you grow your current organization or decide to start your own consulting firm.