How much do HR consultants charge in the UK?

06 May 2020

If you’re looking to outsource your human resources requirements to keep HR costs down, then a consultancy is an effective route to take.

HR consultants take the pressure off your business, by managing your administrative and legal requirements—as and when they happen.

As a small and medium-sized business, you may wonder how much HR consultancy fees in the UK are. The good news is you’ll likely have the budget for it—you can speak to us on 0800 028 2420 for a quote.

You can also read this guide, in which we explain the types of charges you can expect for your business.  

What’s an HR consultant?

Human resource consulting addresses the HR tasks and decisions that businesses face.

It’s an increasingly popular choice for small and medium-sized businesses (SMEs). This is because it frees you up to focus on your daily activities, safe in the knowledge you can outsource any administrative requirements when you need to.

At Peninsula, we have a simple four-step approach to total HR coverage:

  1. Documentation: Creation and management of contracts of employment, company handbooks, policies, and any other legally binding documents.
  2. HR software and tools: Gain access to industry-leading HR software to log holidays, absenteeism, and secure, unlimited document storage in the cloud. You can even create and share shift rotas.
  3. 24-hour assistance: We have an advice team available all day, every day to deal with any problem—no matter how big or small.
  4. Legal insurance: Receive cover in the event of an unfair dismissal or indirect discrimination claim for legal representation and common compensatory awards.  

There are varying prices depending on your requirements. But HR consultants fees are for activities such as:

  • Employee contracts.
  • Company handbooks.
  • Access to the HR advice line.
  • eLearning webinars.
  • Online HR management software.
  • Tribunal representation—in the event of a claim.
  • Legal insurance (optional).

At Peninsula, our HR consulting fee structure is per employee, per month.

How much will I pay for HR consultancy services?

Below we offer a cost breakdown of how much this would cost your business on a monthly basis.

This is under our Peninsula HR pricing package, part of our HR consulting retainer fees—the alternative would involve hiring a freelance HR consultant. They can offer daily charges for one-off tasks.

Our price package is per employee, with HR consulting services fees starting from as little as:

  • 10 employees: £15.70
  • 15 employees: £15.93
  • 20 employees: £15.30
  • 30 employees: £12.64
  • 40 employees: £11.00
  • 50 employees: £10.60

Ultimately, how much you’ll pay depends on your business requirements. The average cost of an HR consultant varies, but is affordable for most SMEs (small and medium-sized business) budgets.

As an example, if you have 10 employees, the HR consulting fees average cost is £157 per month. That’s £1,884 a year.

If you have budgeting concerns about that, remember that outsourcing comes with significant return on investment (ROI).

We cover the benefits of an HR consultant on a retainer basis further below—but, you can expect financial and time savings when you rely on an HR service.

Of course, you can get in touch for a specific quote and for a discussion on the full range of services we offer within that package.

But there are certain factors that add to the overall charge. These are internal and external to your daily operations. These include:

  • The number of employees you have—typically, the more in your workforce, the higher the cost.
  • The HR services you need, which can include payroll assistance, recruitment services, or daily HR support across your administrative requirements.
  • Where you want to extend to extra employment law and health & safety support.
  • Whether you need pay-as-you-go HR services, or a longer-term retainer packages.

You can decide this for your business. But it’s also a good idea to speak to HR consultants about your requirements.

They can help you make a decision. You can often request a consultation—with our service at Peninsula, this is free from any sales jargon or expectations.

Ultimately, we’re here to help. And will simply listen to your needs, then provide feedback on how we can help.

If this is of interest to your business, you can then take the next step.

How much do HR consultants charge per hour?

If you go off a retainer basis with your HR consultant, you can expect the hourly rate to be around £60.

It may cost around £80 per hour if you’re looking to pick and choose your requirements.

For a daily cost at that rate, you’re looking in the region of around £500 a day.

Freelance HR consultants may charge a wide variety of different fees. From as low as £7, £15, or £25 per hour. But that can go through to as high as £66 per hour.

This is often dependent on their experience and standing in the HR industry. Or location—freelancers in London will, typically, charge a bit more.

Although this may come across as an expensive one-time payment, if you only need HR assistance for that short period it may be the way to go.

However, if what you’re looking for is weeks, months, years, or indefinite support with an outsourced HR department, you’ll want to consider rates on a long-term basis.

And the reality is, most services won’t charge an hourly rate—it’s set across each month. In the case of our services here at Peninsula, the number of employees you have will also affect the rate.

This is the case for most HR consultants—rates vary across the industry.

Additional support—health & safety

Don’t forget, if your business is also looking for extra consultancy support, that’s available across other business essentials.

Health & safety is a common requirement. You may benefit from:

  • Online health & safety software.
  • Annual health & safety reviews.
  • Risk assessment support.
  • Crisis and incident support.

It’s just as important to maintain high health & safety standards as it is to ensure legal accuracy with your HR documents.

HR consultancy or an in-house department?

It’s a big question for any SME—should you have an HR department for your business, or choose to outsource?

Well, there are advantages and disadvantages to those choices. Let’s start with an in-house department, what benefits can you get from that?

  • Personalisation: You can really make your department fit your company culture. And you can hire the HR talent you want to, making it more personal.
  • Ease of access: It’s right there and available for you, during working hours, to receive an instant response.
  • Adaptable: You can adjust your HR requirements as and when you need them, strengthening your team as you go along.

However, there are notable downside to having a department. These include:

  • The cost: Hiring and maintaining staff is considerably more expensive than if you outsource.
  • Work times: Your employees will need to go home. So, you won’t have a 24/7 service—that’s a huge bonus many HR service providers offer.
  • Experience: By having a small in-house HR team there is a limitation to the amount of experience that team would have. Unexpected challenges may become more difficult to manage without previous experiences of that issue.
  • Contractual basis: By outsourcing, you can work on a month-by-month or annual basis. This gives you much more flexibility with HR, allowing you to add or remove packages as each quarter passes.

So what about outsourcing, what sort of benefits can you expect by turning to an HR provider? These include:

  • Flexibility: You can add the HR requirements as and when you need to. And adapt this at important moments, meaning you have the right service as and when you need it.
  • Cost-effective: Hiring a full HR department for your business is expensive. Even if you only have one or two employees, their annual wages add up. Outsourcing is much cheaper, which can really help with your annual budget.
  • Save on recruitment costs: It’s important to clarify you also save on hiring costs. It’s a very expensive part of business life—and it’s removed if you choose outsourcing for your HR requirements. The service you use can then also support you with your recruitment needs.
  • Remain compliant with UK law: When you outsource, this ensures your business is in line with the likes of the Equality Act 2010, Employment Rights Act 1996, and the many other legislations you need to respect. That’s time-consuming and complex to manage on top of your daily operations—HR outsourcing takes care of it for you. It’s important to note that if you don’t follow correct compliance, it can result in costly fines and a damaged reputation.
  • Experience: Having access to a larger pool of HR talent means you will be able to deal with a wider range of challenges giving you the confidence to make decisions in the best interests of the business.
  • Save time: As with saving money, you’re outsourcing your requirements to a professional department. HR is time-consuming. And they’ll take care of all of it for you, allowing you to focus on what you do best.

If you’re a new small business, these advantages are often essential. After all, when you start a business it involves making mistakes.

Unfortunately, it’s an inevitability of inexperience. And errors can prove costly.

However, if you outsource your administrative requirements then you’re significantly reducing the potential for mistakes.

All of which can help you to reach higher levels of productivity and success at a faster rate. As well as ensuring you comply with current UK laws.

Need our help?

If you’re looking for an industry-leading HR consultant with over 30 years’ experience, get in touch: 0800 028 2420.

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