Driving through a change may require some external help, but many organisations simply don’t have the in-house expertise required to achieve the desired results. Annie Hayes reports on what HR members really feel about bringing in the so-called experts.

Industry trends:
A report by the Management Consultancies Association (MCA), which represents 70 percent of consultancies in the UK, says the market for HR consulting grew by 16 percent in 2005 to reach a value of £757 million. And according to the report estimates, the total UK consulting industry is now worth £11.9 billion per annum.

Alan Russell, MCA president, said HR was one of the fastest-growing sectors for consulting work. So why is this? There are a number of reasons why businesses might call upon the expertise of an HR consultant. Most organisations point to a lack of skills availability within their own organisations or the ability for consultants to get results more quickly then would be achieved with an internal resource.

There are marked differences between the sectors too. The public sector is a particularly heavy user of consultants, driven by the need, according to the MCA report, to increase efficiency as outlined in the government’s Gershon review. Indeed the report shows that last year public sector employers spent £2.2 billion on MCA member consultants – a number that does not reflect overall spend as some large consultancies, such as McKinsey, are not included.

What kinds of projects are HR Consultants used for?
Clive Wright, European Partner for Mercer Human Resource Consulting and Chair of the Chartered Institute of Personnel and Development’s reward forum, told me that HR consultants are drafted into handle any project that internal teams can’t.

As the biggest pensions consulting business, Mercer is often pulled in to provide investment consulting advice to trustees but the range of expertise goes beyond the technical and Wright points to the whole range of work that consultants provide in the generalist personnel field.

Lynne Griffin, Personnel Director at mortgage lender, Northern Rock, took the decision to hire in RightCoutts as a way of driving forward the businesses people strategy.

“At the time we had retention problems; based in the North East of England we were competing with an influx of call centre operations that were offering better salaries and conditions. When the business became a Plc in 1997 the situation got worse so we applied to the Government Challenge Fund to encourage a better work/life balance in 2003/04 and got the money, we then had to choose a consultancy.”

Similiarly Mark Burch, Head of Performance and Reward at the Crown Prosecution Service (CPS) hired in Hays consultancy and ITAP to drive forward a specialist project also driven out of a need to push the HR strategy forward.

“Hays were brought in to help us devise a new performance management programme for forty-two senior lawyers reporting into the Director of Public Prosecution it was a unique situation. Whilst we used a smaller consultancy, ITAP to help us look at skills and competency frameworks for specific groups.”

Filling a skills and expertise void appears to be the predominant reason for bringing in an HR consultant and as Sandra Beale, an independent HR Consultant, says, someone with the expertise can always be found:

“It may be a project that needs to be delivered such as a recruitment campaign, compensation and benefits review or the implementation of an HR information system. Another possibility may be the need to cover a maternity leave post. Whatever the company requirement, whether it be linked to strategic or operational HR there is a consultant to fit the bill, whether they be a generalist or specialist.”

What are the benefits of parachuting in an ‘outsider’?
Chris Burrows, HR Manager at Coventry City Council, says that one of the main benefits is the ability of the external consultant to push forward change: “Often recommendations from external consultants are acted upon whilst similar recommendations from internal staff may not be taken so seriously. External consultants bring a level of expertise and independence that often cannot be provided by internal staff. They have a fresh pair of eyes in relation to the organisation, but ones that have probably seen the issues before in other organisations, and therefore have witnessed what has/hasn’t worked elsewhere.”

And Griffin agrees, reflecting on the successes of the work/life balance project she says: “They [RightCoutts] were able to force through culture change which we might not have been able to do.”

Consultants can also be used to push through changes that may be met with some resistance and/or fear. Wright says that a key benefit is the ability of the consultant to step aside from the office politics.

“Sometimes we get called in to take the blame for something where change is not going to be viewed positively for example.”

Coming from outside the organisation also levers them into a better position for challenging management thinking. Wright says that often they meet with clients that have designed an ill-fitting solution put together without the expertise of any diagnostics. “It’s like sticking plaster on a broken leg.”

Being an outsider says Beale helps in this process, whereas internal staff can cloud their judgement by the nature of their involvement in office politics HR consultants can be parachuted into find the right decision, leaving aside these considerations:

“Their decisions can, therefore, be based on benefits to the organisation, not whether it will upset the opinions of certain individuals. This is particularly important in any change management and organisational design project.”

Burch says there is the added benefit too of having not only access to expertise but also access to high-level professionals that are used to liaising with business leaders.

What are the potential problems?
There are of course some pitfalls to be wary of. Communication can be a major bone of contention and staff must be reassured about the reasons for drafting in the consultancy team.

Burrows says: “Early team briefings on the role and function of consultants is key. Don’t just assume that staff will know what the consultants are there to do, or why. If you don’t brief them, it is likely to cause suspicion and is likely to mean that the consultant’s job will take longer to complete due to possible internal resistance.”

The unions can also be tricky says Burch who tells me that generally they don’t like organisations taking on board consultants, which they see as a waste of money and guilty of taking other people’s jobs. A rigid procurement process, says Burch, ensures that the process is fair.

But it’s not just soothing employee concerns that can be problematic but ensuring that the consultant understands fully what is expected.

Roy Gaynor, managing director of Navisys Academy which offers development and mentoring for senior business people seeking to follow a career in consultancy says planning is the key: “A good consultant will have a range of tools and techniques at their disposal and will be able to set out a process that covers the journey from where you are now to where you want to be. This will reassure you that they understand what needs to be done, and that what they propose is likely to achieve the outcome you want.”

Burch says that a common frustration are consultants that simply repeat back what you’ve told them, glossing over the information you’ve supplied in a fancy report. “This kind of thing doesn’t help you to advance. You need to focus on what you want delivered, you have to be clear on your strategy and that often involves pinpointing your weaknesses.”

Wright says that one way of ironing out this issue is having a tracking process in place to ensure that amendments to plan are agreed upfront.

Expense can also be a disadvantage. Depending on the level of expertise required, consultant fees can vary from £200 to £1,000 per day and upwards, says Beale so companies need to consider what they can afford and negotiate over the daily rate and number of days required. “To avoid escalating costs consideration should be given to estimating a set number of days to define a project, such as management training, and build this into the contract drawn up.”

Wright says, however, that more often than not consultants can save a business money especially when a project has been badly planned and executed by the internal team and a consultant is brought in to sort it out. And Burrows agrees: “Often external consultants can conclude the business quicker than internal staff for the reasons referred to above (their experience), and therefore even though their daily rate often exceeds the cost of directly employed staff, they complete the task quicker. They often know short cuts/efficiency approaches to the resolution of problems.”

Choosing the right team:
Once a business has decided to take on a consultancy expert or team how can they ensure that they have the right people on board and do the big names always mean results?

Often it’s a case of word-of-mouth recommendation and track record. Griffin selected RightCoutts because they’d successfully executed an outplacement project for the firm and it boiled down to ‘trust’. Whilst Burch took on the Hay Group to manage the performance management programme because they wanted some commonality with their colleagues in the Cabinet Office that had also used them.

Gaynor suggests taking references rather than simply relying upon ‘gut feel.’ “You need evidence that the consultant has achieved results elsewhere.” Taking references can be one way of confirming this.

But do the big players always mean value for money and can the brand itself give the reassurance that success will be achieved? Not according to research by the University of Sheffield in 2000-01 which revealed that smaller consultancies often offered the best value for money.

Burch who used the lesser well known ITAP consultancy for its skills and competency framework says that one advantage of using a smaller player is flexibility: “Some of the larger consultancies tend to follow a pattern and aren’t as flexible. With an independent consultant or a small consultancy they’re more 50 percent consultant and 50 percent member of staff.”

Wright says the decision will come down to what’s wanted: “If it’s a particularly complex, company-wide initiative then you may need a bigger consultancy to handle the issues because they can provide a range of expertise – an independent consultant may have only worked in one or two organisations and will therefore have limited breadth of experience.”

Griffin says that the real test is taking on board someone that has a good understanding of the problems and how to overcome that rather than choosing an HR academic.

It’s clear that HR consultants can offer expertise and specialist skills that can help an organisation get from A to B but the path to success can only be reached with careful planning, forethought and interaction from the organisation. Failure to select the right outfit, communicate with key stakeholders and support the consultants once on board may result in disaster.