How To Start An HR Consultancy?

Most businesses need employees for the various responsibilities and duties. It could include managerial duties such as overlooking the entire business or accounting duties where the cash inflow and outflow is kept track of meticulously or basic staff who carry out the actual work within the business. When employing these various staff members for the business, entrepreneurs usually specify the particular qualifications, experience, skill and training they are looking for in each of the various roles. But finding all of them while running a business can be quite a task. That’s where an HR Consultancy comes into the picture.

What Is An HR Consultancy?

An HR or Human Resources Consultancy is like a workforce outsourcing business. It involves bringing potential employees to other companies. An HR Consultancy is a third- party placement agency that recruits people for the vacancies available with companies or businesses that register with it to hire a new workforce.

Almost every small and medium business requires a workforce and therefore requires the assistance of an HR Consultancy to help hire the right candidates having the desired skill set, qualification, experience and values as deemed optimal by the business.

Owing to its popularity and demand across several business domains, an HR Consultancy has always been a sought after and rewarding business opportunity and the market for HR consulting services is anticipated to gain substantial returns while registering a profitable annual growth rate till 2025. 

Now that we know that an HR Consultancy is a business opportunity that caters to many other businesses and organisations, the next step as an aspiring entrepreneur is to learn how to start HR consultancy. 

Considerations While Starting An HR Consultancy

Before learning how to start HR consultancy it is vital to understand what factors the consultancy needs to consider. A human resources job or service is tasked with ensuring that there is adequate enablement and engagement of teams while at the same time preparing for some hard decisions which will benefit the clients business in the long term.

These considerations will help entrepreneurs as HR consultants to provide better service to their clients.

• People Over Policies

Every organisation has certain policies that they follow but for the betterment of the company and for the hired employees to continue at the job with the same dedication, it is important to place people above policies. This means that instead of setting rigid policies that turn the employees against the company, it is better to tweak policies but place the people over the policies.

• Focus On Reality

Several policies as well as factors might sound good in theory but as someone learning how to start HR Consultancy it is vital to focus on the reality and practicality rather than the theory. 

• Add Value

As an HR consultancy service it is vital that entrepreneurs must understand the need of the business and add value to it through their services.

• Solve Problems

The main objective of an HR consultancy is to be able to offer answers to the problems troubling the client. Thus, as a consultant the entrepreneurs must be problem solvers.

• Simplify

Anything complicated will be problematic for the client, the employees as well as for the entrepreneur as an HR consultant. It is therefore important to always look at simplifying things.

• Focus On Business

As an HR Consultancy the entrepreneurs must focus on the things that matter to take the business forward (the client’s as well as their own) instead of focusing on trivial matters. 

Taking these considerations into account will help retain the ‘humab’ element in Human Resources. Further when planning how to start HR Consultancy these factors will help entrepreneurs become HR leaders that lend support to their clients, guide them and take them forward in a positive way. 

How To Start HR Consultancy

• Identify The Objective

The first step to knowing how to start HR consultancy is to identify the reason behind starting the business. Entrepreneurs need to identify their objective and how to achieve it. The clear identification of objective can be done by opting for Business Planning and idea validation service as it helps analyse the business idea and check it’s validity as well as feasibility. 

While identifying the objective it is also important to decide whether the service will be as a generalised consultant who caters to all types of businesses. Or whether the service is for a specialised business sector, catering to a particular type of business domains such as IT firms only or engineering businesses or retail sector only. Else it can specialise in finding employment for specialised qualifications only such as those specialising in turnkey operations or those having a degree in chemistry etc. The reason for starting an HR Consultancy service and the area of specialization must be identified as s first step.

• Create A Business Plan

The second step when getting to know how to start HR consultancy is to create a business plan after identifying the objective. A business plan acts as a written roadmap charting out the path to be taken in order to achieve the objectives. A business plan has all the details regarding the business such as, for the HR consultancy, how many businesses it aims to assist and in what time frame, from where the business will operate, how will it approach potential clients, how will it search for workforce, how much will it charge the clients and/or the potential candidates, how will it stay ahead of the competition, etc. All this information will be included in a business plan under the headings such as 

• • Executive summary
  • Company description
  • Market analysis
  • Competitive analysis
  • Management and operations description
  • Marketing and sales plan
  • Financial summary

In order to ensure that the business plan is thorough and acts as a full proof roadmap for the business, entrepreneurs can Download business planning checklist to make a thorough business plan. 

• Identify Legal Requisites

Once the objective and business plan to put the objective into action is ready the next step is in learning how to start HR consultancy is to know the legal requisites necessary for the business. 

• Business Entity

The HR consultancy needs to be incorporated as any one of the business entities for it to be legally recognised. It could either be a sole proprietorship or a partnership or a private limited company or even a limited liability partnership (LLP). A business entity registration helps give recognition to the business and also provides certain benefits, which differ according to the type of business entity chosen by the entrepreneur.

• GST

A GST (Goods and Services Tax)  registration helps the business become compliant with the existing taxation laws which are uniform across the country. 

These are the basic registrations required for starting an HR consultancy firm.

• Build A Network

The basis of an HR consultancy service is human interaction and therefore it is crucial to create a network with individuals from walks of life as at any point they can be beneficial to the business, whether as potential clients or in terms of their experience or as potential candidates looking for placements. It has been found that a majority of the business comes via referrals and that’s when the painstakingly built network comes to use. It could include a list of friends, family, former employers, employees, colleagues, LinkedIn contacts, Facebook contact, and people met along the way. When starting the business all these contacts can be informed to create a beneficial network.

• Develop Marketing Plan

One of the final but equally crucial step when understanding how to start HR consultancy is to develop a plan for the marketing of the firm. The marketing can be done via several channels and ways such as making a presence felt on the job search platforms. Also via informative blogs and videos as well as appearing on external blog and videos too. Various social media platforms like LinkedIn, Facebook, Twitter, Instagram can also be used to reach out and to market the business. Additionally, various paid marketing methods can also be used such as search engine optimization (SEO), Google AdWords, etc. Another marketing strategy is to collaborate with other companies such that both can benefit from each other. These are the marketing channels from which the entrepreneurs can choose the appropriate ones to market the business.

These are the basic steps and requisites to keep in mind when getting to know how to start HR consultancy firm. For entrepreneurial support or guidance at any step in the entrepreneurial journey of starting an HR consultancy service, entrepreneurs can always approach deAsra Foundation for their assistance.