How to Pick an Outsourced HR Service Provider



Outsourcing your business’ human resources to an external service provider can have many benefits such as:

  • Cost savings
  • Improvements to customer service
  • The ability to access expertise not available in-house
  • To free your internal HR function up to focus on certain work / demands
  • To outsource a HR project for which your business does not have the required expertise
  • To provide HR for HR support.

But when you’ve made the decision to outsource your human resources need, how do you go about selecting an external HR Service Provider? It can be a daunting task with so many different providers to choose from. HR is a broad field of expertise, so how can you ensure that you find the right provider for your business?

We’ve put together our 6 top tips on how to find the right HR Consultant for you and your business:

1. Organisational Fit

Assess HR Consultants on their understanding of your business. How well do they know your industry, the sector, and what is their understanding of your organisational vision and values?

Do they understand the internal and external factors that impact your business? Knowing this is critical for your HR consultant to provide you with the best fitting advice in all scenarios. Importantly, your HR consultant should have a good rapport with you and be able to facilitate discussions on sometime complicated and difficult discussions. You should be able to have a consultant that you trust to act in the best interests of your business and its people.

2. Level of Support Required

Carefully consider the level of HR support you need for your business and what the HR consultant can offer you. This may depend on several factors including:

  • Any existing HR resource you have internally
  • The size of your business, operations, and number of employees
  • Your location – is your consultant near by and can they offer on-site support?
  • The long-term plans of your business (growth, change or some other change initiative e.g. restructure) – is your consultant strategically focus and do they have experience that will facilitate change for your business?
  • Challenges currently being faced by HR – e.g. if any existing HR function has resource or expertise issues, can the consultant provide this?

You will need to consider the length of the services you require, is it time bound and time sensitive and does your HR consultant work in the required style. For example, do you need:

  • One-off, immediate one off support (e.g. to assist in an investigation or draft a contract template);
  • a clearly defined time bound project (such as pay or benefits benchmarking) or;
  • a long-term partnership to help operationally and/or strategically manage your HR function (a HR retainer).

A good Consultant will provide you with a clear list of the services they provide. A great Consultant will help you to understand what you need and provide you with a detailed plan and proposal to illustrate how their value will be added. Scoping the work you require accurately is fundamental to a successful working relationship, just like any other business partnership.

Ensure that they have sufficient resource and availability to provide all the support you think you will need. It is unlikely that you are their only client, so make sure that they have the bandwidth to service your business effectively. Don’t be afraid to set your expectations to ensure that work is completed in a timely and successful manner. This will help you to gauge the level of commitment from a potential HR Service Provider.

3. Experience and Track Record

Find out the types of projects and HR support your consultants have provided in the past. You might consider the sectors and industries they have supported along with the typical size of their clients. Ask for some examples, testimonials or case studies of previous projects. Specifically, ask for details on the results and outputs of their work. How has this impacted the organisation? What is the return on investment?

4. Qualifications

Most HR Consultants will have undertaken professional qualifications – such as CIPD and be able to provide proof of these. Whilst qualifications should not be a sole a pre-requisite, they demonstrate a level of commitment to learning and development in their specialist area and, suggest that they continue to keep their professional knowledge and expertise up to date with ever changing HR trends and employment legislation.

5. Managing costs

Establishing a successful HR function is critical to the success of your business.  HR issues can be time-intensive to manage and costly to resolve when not handled correctly. Being taken to Employment tribunal is concern for almost all employers, with financial awards at significant levels, let alone the legal cost of defending a claim. Compensatory awards by the tribunal are increased by 25% if the ACAS code of practice is not followed. So, investing in your HR function will pay off in the long run. Your investment will be determined by a number of factors including the size of your organisation and the level of support that you require. Speak about your budget with your HR consultant.

6. Off the Shelf or Bespoke?

Clear communication of your budget and scope with your HR Consultant will ensure that you can select a partner with good commercial acumen, HR knowledge and experience to ensure a great return on your investment.

HR outsourcing provider costs will vary depending upon size of the consultancy and the experience of the consultant, so it is important that you scope out your needs and work with a partner who has both an appropriate level of expertise and a cost structure that suits you and offers you the best value.

Larger HR Service providers on the market may offer low-cost solutions. But beware hidden costs – often just a basic provision is provided within their service, and you may find yourself having to deal with multiple account managers often incurring additional time to resolve your enquiries. For example, some companies provide ‘unlimited’ ongoing advice via email or a call centre, based on a long-term contract, and charge separately for work outside of this arrangement at higher rates.

For some, this is the right solution, but if you are looking for an HR Partner who truly understands your business and your people, we recommend a more bespoke solution.

At Nockolds HR, we take the time to build a relationship with you and any key stakeholders and decision makers. We believe that HR should fulfil the role of Trusted Advisors, a level of relationship that can only be formed based on mutual trust and understanding of your business.

Please call a member of our team on 0345 646 0406 or fill in our online enquiry form to find out more about our flexible HR services.