Why Should My Small Business Hire an HR Consultant?
Adele Barone • July 4, 2025
Human Resources is critical to the success of any business, whether there are 2 employees or 10,000+ employees. HR Consultants are valuable to companies of all sizes as well. The use of an HR consultant is particularly beneficial for small businesses. Why? Here are 5 reasons your business should consider hiring a human resources consultant:
Expertise
HR consultants are trained and experienced in the field of human resources, and can provide valuable advice and guidance to small businesses on many HR issues that impact their business including:
- Employment law: HR consultants are knowledgeable about federal, state, and local employment laws and regulations, including wage and hour laws, anti-discrimination laws, and family leave laws. They can help businesses understand and comply with these regulations, which can be complex and constantly evolving.
- Compensation and benefits: HR consultants can provide guidance on compensation and benefits practices, including setting salaries, designing benefits packages, and managing employee retirement plans.
- Talent management: HR consultants can assist businesses in developing and implementing effective talent management strategies, including recruiting and onboarding, performance management, training and development, and succession planning.
- Employee relations: HR consultants can provide guidance on employee relations issues, including conflict resolution, employee grievances, and disciplinary actions.
- Compliance: HR consultants can help businesses stay compliant with employment laws and regulations by conducting audits, reviewing policies and procedures, and providing training to employees and managers.
- HR technology: HR consultants are knowledgeable about HR technology solutions, including HR management systems (HRMS), applicant tracking systems (ATS), and performance management tools. They can help businesses select, implement, and manage these systems.
Overall, HR consultants have a broad and deep understanding of the many different aspects of human resources and can provide valuable guidance and support to businesses looking to improve their HR practices and comply with employment regulations.
Cost-Effectiveness
For many small businesses, hiring a full-time HR professional can be expensive. By using an HR consultant, small businesses can access HR expertise on an as-needed basis, which can be more cost-effective than hiring a full-time employee. In fact, HR consultants can be cost-effective for small businesses in several ways:
- Flexible arrangements: HR consultants can work on a project-by-project basis or be engaged for a set number of hours per month, providing small businesses with flexibility in terms of the level of support they need and the amount of money they are willing to spend.
- Reduced overhead: By using an HR consultant, small businesses can avoid the cost of hiring a full-time HR professional, including salaries, benefits, and overhead costs such as office space, equipment, and training.
- Improved efficiency: HR consultants can help small businesses optimize their HR processes, making them more efficient and effective. This can help reduce costs associated with HR-related tasks and improve overall business operations.
- Avoidance of costly mistakes: HR consultants can help small businesses avoid costly HR-related mistakes, such as compliance violations or employment law violations, that can result in legal fees, fines, and other expenses.
- Increased productivity: By outsourcing HR functions to an HR consultant, small businesses can free up their own time and resources to focus on core business activities that can drive revenue and increase productivity.
Overall, HR consultants can be cost-effective for small businesses by providing flexibility, reducing overhead costs, improving efficiency, avoiding costly mistakes, and increasing productivity. By outsourcing HR functions to an HR consultant, small businesses can access the expertise they need without the cost of hiring a full-time employee.
Compliance
Small businesses are subject to numerous federal, state, and local regulations related to employment practices. HR consultants can help businesses stay in compliance with federal and state laws in several ways:
- Knowledge of regulations: HR consultants are knowledgeable about federal and state employment regulations, including wage and hour laws, anti-discrimination laws, and family leave laws. They can help businesses understand these regulations and develop policies and procedures that are in compliance with them.
- Compliance audits: HR consultants can conduct compliance audits to identify areas of non-compliance and develop plans to address them. They can also assist with implementing corrective actions to ensure that businesses remain in compliance.
- Policy development: HR consultants can help businesses develop HR policies that are in compliance with federal and state regulations. This includes policies related to employee handbooks, anti-discrimination and harassment, and leave of absence policies.
- Training: HR consultants can provide training to employees and managers on compliance issues, including anti-discrimination and harassment training, wage and hour training, and leave of absence training.
- Recordkeeping: HR consultants can help businesses establish and maintain compliant recordkeeping practices, including maintaining personnel files, managing employee time and attendance records, and maintaining records related to employee benefits.
Overall, HR consultants can help businesses stay in compliance with federal and state employment laws by providing knowledge, conducting compliance audits, developing policies, providing training, and managing recordkeeping practices. By working with an HR consultant, businesses can reduce their risk of non-compliance and avoid costly fines and legal issues.
Risk Management
HR consultants can help small businesses identify and manage HR-related risks, such as discrimination claims, wrongful termination lawsuits, and workplace safety concerns. There is a lot of overlap here with ensuring your business is in compliance with federal, state, and local laws. In addition to compliance measures, HR consultants can help businesses manage risk by:
- Conducting risk assessments: HR consultants can conduct risk assessments to identify potential risks related to employment practices, such as hiring and firing, employee relations, and compliance issues. Based on the results of the assessment, they can develop plans to mitigate those risks.
- Investigations: HR consultants can assist businesses with conducting internal investigations into issues such as harassment, discrimination, or misconduct, helping to mitigate potential risks associated with these issues.
Overall, HR consultants can help businesses manage risk by conducting risk assessments, developing policies and procedures, providing training, conducting compliance audits, managing recordkeeping practices, and conducting internal investigations. By working with an HR consultant, businesses can reduce their risk of legal liability, protect their reputation, and maintain a safe and productive workplace.
Improved Employee Retention and Productivity
HR consultants can help improve employee retention and productivity in several ways:
- Employee engagement: HR consultants can help businesses develop strategies to improve employee engagement, such as conducting employee surveys and developing communication channels that allow employees to provide feedback and feel heard. This can help improve job satisfaction and increase employee retention.
- Performance management: HR consultants can assist businesses with developing performance management processes that align with the company's goals and values. This includes developing performance metrics and performance improvement plans, which can help employees understand expectations and work towards achieving their goals.
- Training and development: HR consultants can assist businesses with developing training and development programs that help employees develop new skills and grow professionally. This can improve job satisfaction, increase employee retention, and increase productivity.
- Compensation and benefits: HR consultants can assist businesses with developing competitive compensation and benefits packages that align with industry standards and employee needs. This can help attract and retain top talent, improve job satisfaction, and increase productivity.
- Workplace culture: HR consultants can help businesses develop and maintain a positive workplace culture, which can help improve employee retention and productivity. This includes developing employee recognition programs, establishing work-life balance policies, and promoting a respectful and inclusive workplace.
Overall, HR consultants can help businesses improve employee retention and productivity by focusing on employee engagement, performance management, training and development, compensation and benefits, and workplace culture. By working with an HR consultant, businesses can develop and implement strategies that help create a positive work environment and improve employee satisfaction, which can lead to increased productivity and higher employee retention rates.
In summary, using an HR consultant can be a smart investment for small businesses looking to improve their HR practices and comply with employment regulations, without incurring the cost of hiring a full-time HR professional. Want to know more about what customizable options an HR Consultant can provide for your specific set of needs? Contact Bar-1 Resources
today for a free consultation!