HR Consultant vs HR Manager

For business owners without the time or resources, HR can stand for “Headaches Repeated.” HR tasks often take focus away from the parts of running a business that are critical for growth. That is why choosing between HR consultants and HR managers is a big decision. The decision is between hiring an HR manager full-time or an outsourced HR firm.  

A manager will be responsible for executing HR tasks and managing the overall HR function. Outsourced HR involves bringing in a 3rd party expert to advise your business and either execute the functions or help your internal team execute those functions. Below are the things to consider when making this decision: 

HR consultant roles and responsibilities

HR embodies the administrative functions of a business from planning to implementation. Operations such as payroll, benefits, hiring, training, and employee relations all fit under the umbrella of HR. These functions can be a lot to juggle for small business owners while also leading and growing a business. The primary role of an HR consultant is to help a company stay in compliance and conform to best practices within their industry. An HR consultant who works as a part of an outsourced HR company may also have the capacity to execute on HR tasks similar to how an internal HR manager would within a business. 

HR consultants can be hired as a fractional CHRO to provide a strategic approach to a business’s HR that helps tackle executive-level HR challenges. This collaboration looks at the business holistically to identify gaps and then advises on how to move forward. On the other hand, if a company knows they need help in a specific area, outsourced HR consultants can be hired to advise for that specific need, such as talent acquisition. A great consulting team will work to learn the goals and values of the organization and then apply them to specific HR functions. 

HR manager roles and responsibilities

HR managers are responsible for planning and managing HR tasks as a full-time employee. They are often the lead for recruiting and selection, compliance, compensation and benefits, training and development, and performance management. They are also the internal face of the organization that provides a link between employees, management, and benefits. 

Comparing HR consultants vs HR manager, the main difference is consultants are outsourced experts brought in to strategically direct a business while HR managers are internal employees who manage recurring and strategic HR. In some businesses, HR functions can be shared amongst a variety of staff. HR practitioners and HR generalists support the needs of the HR managers. HR specialists help with a specific task of HR, such as payroll or compliance. Many small businesses do not have the ability to hire this many HR personnel, so typically the HR manager takes on the role of generalist and must execute tasks in each area.

HR managers and HR consultants do not need to be mutually exclusive. HR managers can work with an outsourced consultant to perform administrative tasks that free up the manager to improve employee relations or develop strategic planning. 

Cost of HR manager vs. HR consultant

The average national salary of an HR professional is $69,472, while HR Managers average annual salary is $91,406. It is important to keep in mind the recruiting, onboarding, and benefits costs that come with finding the right HR staff member. 

The cost of an HR consultant is dependent on both the needs of the company and who they are hiring. Some outsourcing companies will charge between $50-$200 per employee per month (PEPM) basis. Companies may also charge based on a percentage of employees’ annualized salaries, typically from 2%-10%. Finally, other companies could charge fixed monthly rates for a scope of business functions. At Milestone, we offer a variety of HR consulting services. To get an idea of our pricing, check out Milestone’s monthly hr foundation and growth support packages. 

Are HR consultants in demand?

Outsourcing was officially recognized as a strategy in 1989. Since then, the industries surrounding it have been growing and evolving. For small businesses in 2019, 42% outsource part or all of their payroll and 42% outsource part or all of their benefits. Furthermore, organizations worldwide jumped from 17% of organizations that outsourced payroll in 2015 to 38% in 2019. Outsourcing HR is a growing industry and so the demand for HR consultants has grown alongside it. 

Why HR Consulting?

Businesses turn to HR Consulting, or Outsourced HR, for 4 main reasons: saving time and money, accessing expert oversight, improving employee relations, and staying in compliance with changing state and federal laws. Outsourcing HR to HR consultants provides businesses with the unique advantage of accessing expertise without recruitment, onboarding, training, and commitment of hiring someone full time. Outsourced HR also has the unique ability to provide short-term or project-based contracts to meet immediate HR needs without necessitating the commitment a full-time hire brings. Businesses will also be agile with their evolving HR needs as consultants are backed by an organization committed to HR best practices.

Contact us to learn more about our HR Consulting services.