Does your business have some complex HR or Workplace Relations challenges?  Or perhaps your business has grown and evolved over time and you or one of your staff have been forced to wear the “HR Hat” and struggling to give this essential business function the attention that it deserves. 

The time might be right for your business to consider engaging an external HR consultant.  But, what do you look for?  There are a lot of options out there, all with varying business models and it can be hard to make a decision as to what might suit your business. 

So today, we are going to share, in our view the top 5 questions you should ask a potential external HR partner to make an informed decision and in our view, these will be questions that you might not have considered before and they are unlikely to be answered by any of the marketing material you may have been sent or read on their website. 

Kicking things off, we begin with the experience of the business and in our view, the key question you should be asking is if the consultant has had any experience in appearing in the Fair Work Commission or other bodies defending business in claims such as Unfair Dismissal, Adverse Action or underpayment claims. 

You see, to some degree it does not really matter how many years of experience a person or business has, what is really important is the type of experience they have.  Typically, a consultant who has experience in the Commission has had to defend the performance management or other advice they have previously provided.  This offers something that cannot be learnt or taught in any other way, and that’s perspective.  

A consultant that has had experience in the Commission will be able to be offer advice in any situation that considers risk, but also balances this against the interests of the business instead of simply advising the least risky option.  Let’s take a look at an example of this in practice.  

Let’s say that you have an underperforming employee who has been with your business for 9 months, your business has more than 15 employees.  In this hypothetical scenario, you have had an informal discussion with this employee but you have not previously issued a written warning about their poor performance. 

A typical HR consultant may give you advice that you will need to commence a formal performance management process, issue a written warning that identifies areas that are not meeting the expectations of the business and given them an opportunity to improve before considering termination at a future date.  

On the other hand, a HR consultant with Commission experience will understand that with a robust termination process and with consideration of the employees length of service, even if the employee was to make a successful Unfair Dismissal claim, the likely risk might be a couple of weeks worth of pay.  In this situation, even the worst outcome of having to pay an additional few weeks of compensation might be a better commercial outcome for the business then to keep an underperforming employee around for another few weeks or months to carry out a “text book dismissal”.   

I trust that you can see the significant difference in outcomes in these two approaches to the same HR problem and we will leave it to you to decide if practical experience in the Commission or text book knowledge of our Industrial Relations system is better for your business when it comes to external HR consultants. 

This leads us to the second question that you should ask your potential external HR consultant which is if they offer insurance against potential employment claims such as unfair dismissal or adverse action.  

On the surface, HR consultants that offer this may be appealing to consider.  This type of insurance may look to provide comfort that your business will not be required to pay compensation in these types of matters.  We get it.  At one stage, we even considered looking to offer something similar at On Demand HR.  However, we ultimately decided against it because in our view it creates a conflict of interest when giving advice. 

It effectively would have incentivized us to give more conservative advice which may not be in line with the businesses interest in order to avoid the cost of paying out a claim relating to an employee.  For us, this would have been a violation of one of our core values of providing practical advice aligned with the commercial interests of the business.   

For you, asking this question will at least enlighten you if you are partnering with an organization that offers practical or conservative advice.  For risk adverse businesses this might be a great thing but may not always be aligned with their commercial interests. 

The next question we suggest to ask is the length and type of engagement that the provider is asking you to commit to.  We have been told by some of our current members that there were consultants asking for 1 years, 3 year and even 5 year up front commitments.  

For us, this does not really make sense.  We cant understand why a HR consultant would require this much time in order to deliver value to your business.  In our view, if you are delivering exceptional value to clients each and every month there is no reason for them to leave and if you are not delivering this value, they should be able to leave without penalty.  This is why On Demand HR does not ask our members to enter into anylong term contracts. 

The other model that we have seen out there in the marketplace is a regular monthly fee for a “bucket” of hours and if you exceed this allocation in a particular month then you are required to pay for additional consulting time.  Of course if you don’t use your hour allocation in these arrangements, you are unlikely to get a discount on your bill! 

For us, this question comes down to what your business is really looking to get out of your arrangements with your external HR partner.  Are you looking to dedicate a certain amount of hours per month?  Or are you looking for a solution that delivers consistent value and resolves your HR & Workplace Relations issues regardless of the amount of hours that it takes?  

I know which one I would choose as a business owner and this is why On Demand HR has chosen to offer unlimited day to day advice as part of our essential membership without any long term contract. 

The fourth question that we suggest that you ask when considering an external HR consultant is who exactly that you will be dealing with when making requests for support.  We are all familiar with the larger telco companies in Australia where you get passed from person to person and forced to explain your situation over and over again

I am going to assume that you do not want the same sort of experience with your external HR consultant.  However, at the same time, in our view it is impossible for a single consultant to know everything and be on top of the constantly changing HR & Workplace Relations landscape.     

We are not sure what other providers do in this space, however our solution to this conundrum here at On Demand HR is we have made the strategic decision to limit the number of members we accept to ensure that the majority of our team has a good understanding of each of our members businesses and affairs.  Each of our members can contact any one of our team of consultants or alternately make a support request to our shared inbox and we will allocate the task internally to the best team member based on the type of support requested. 

This results in a process of focusing on resolving issues and achieving good business outcomes not constantly collecting background information over and over. 

The final question is if the HR consultant can offer you end to end support for all of your HR & Workplace Relations needs.  For example, you may not want to have to pay an additional business to help you to carry out your recruitment function or give access to EAP services which does not integrate and work together with your HR Process.   

Again, we are not really sure what other HR consulting businesses do in this space.  Our view internally has always that we should focus on the areas that we excel at and offer the most amount of value to our members.  For us, this means assisting across the entire HR function from recruitment through termination and everything in between.  

For those areas where we are unable to provide specialist advice, we have developed over the years a wide range of trusted referral partners to fill in the gap for our members.  These referral partners have been carefully selected and share our mindset of delivering advice, services and outcomes that are in line with the business objectives. 

So there we have it, there are our top 5 questions that we think you should ask when considering an outsourced HR consultant.  Over to you, what questions do you think should be asked? 

Finally, if you would like to put On Demand HR to the test on our answers to these 5 questions or any others that you might have, please let me introduce some of the On Demand HR team who will tell you a little about our free HR & Workplace Relations consultation & strategic action plan.