How to Choose an HR Consultant: 12 Questions to Ask Before You Outsource Human Resources
By Joseph Campagna, SPHR, SHRM-SCP, founder of My Virtual HR Director. In HR since 1996.
Anyone can call themselves an HR consultant. There is no license to hold, no exam to pass, and no minimum years of experience. That means the person advising you on a termination, a leave request, or a harassment complaint could be a seasoned HR executive, or someone who answered phones at their last job in between ordering new hires’ business cards.
The difference shows up when something goes wrong. One bad HR decision can cost more than years of good advice: a wrongful termination claim, a wage-and-hour audit, or an agency charge that started with a manager doing what a weak HR advisor told them to do.
This guide shows you how to choose an HR consultant or HR consulting firm: how to tell the difference before you sign, and what to ask so the answers do the vetting for you.
Red flags: how to spot shallow experience
The “dual role” résumé. HR and marketing. HR and accounting. HR and office manager. Someone who did HR on the side definitely learned it on the side. Look for a career spent in HR, not one that passed through it.
Title leaps. If the person who is going to be trusted with outsourcing your HR function touts an executive background, that is a good thing.Make sure it was earned through experience and knowledge, not just tenure or necessity.If their career started as a human resources coordinator, and then they are the Director of Human Resources within a few years, it was probably artificially elevated.There are many reasons this happens, and we have seen them all.Nine times out of ten, the experience is notcommensurate with the title.
Experience that doesn’t fit your business. A consultant who only knows Fortune 500 systems will hand a 40-person company a process built for 40,000. One who has only worked with start-ups may never have handled a multi-state workforce or a union grievance. Ask what size companies they have actually run HR for.
Experience that is stuffed into “HR.” Like the experience that doesn’t fit your company, this is often a category error.A corporate recruiter may be a part of the HR Department, but that doesn’t mean they can “do HR.”A payroll specialist is not normally well-rounded enough to simply become an HR Manager.Ensure that the HR specialty they made their career in is not so narrow as to be misleading.
A one-person shop with no backup. If your consultant is on vacation, in a deposition, or out sick the day you need to terminate someone, who takes the call? “I’ll get back to you next week” is not an answer in a crisis.
Hourly billing that makes you hesitate to call. When every question runs the meter, managers stop asking. Then they make the decision alone, and that is where most claims begin.Outsourcing HR shouldn’t mean avoiding HR.
Confidence without credentials. Polished answers are not the same as correct ones. Senior HR certifications such as SPHR and SHRM-SCP require years of professional HR experience and a rigorous exam. They are a floor, not a ceiling, but they are a floor worth requiring.
12 questions to ask before you hire an HR consultant
1. What HR certifications do you hold?
Look for senior credentials such as SPHR (HRCI) or SHRM-SCP (SHRM). Ask who on the team holds them, not just whether the firm’s founder does.
PRO TIP: Ask how long they had to study for the exam.
Certifications like the PHR or SHRM-CP can be a good gauge of technical knowledge. Senior certifications like the SPHR or SHRM-SCP test judgment in senior-level situations, so they should reflect practical, real-world know-how, not just technical knowledge.
I once met an executive at a large company who asked me how long I had to study to get my SPHR.I told her I didn’t study at all. I just sat for it.She was amazed and told me she took it twice before passing and had to take a 12-week course to learn how to pass the test. A prep course can teach someone to pass the test. It can’t give them the experience the test is meant to measure.
2. How many years have you worked in HR, and only HR?
Count the years spent doing HR as the primary job. Eight years of “office management” and two years of “recruiting” is not ten years of HR.Ask them specifically what their title progression looked like. If they went straight from HR admin to HR Manager or similar, it’s a telltale sign they jumped the line without the requisite on-the-job learning and development. HR admins typically do not handle employee discipline, terminations, or compliance. An HR Manager is usually expected to handle all of these independently.
3. Who will actually answer when I call?
The person who sells the engagement is often not the person who does the work. Ask for names, roles, and experience levels.
4. Who covers for you when you are out?
Every role should have a backup who already knows your business. Ask how that handoff works in practice.
5. Can you be on site when it matters?
Some situations, such as a termination, a workplace investigation, or a tense team meeting, go better in person. Ask whether on-site support is available and what it costs.
PRO TIP: This is not a deal breaker.
These days, a proficient HR leader is required to work with remote employees.Good HR outsourcing can include virtual meetings and processes.It is just a bonus if they can be on site for sensitive situations.
6. How well do you know our state’s employment law?
Some states add requirements well beyond federal law. The most complex states (in our opinion) are California, New Jersey, New York, and Massachusetts, in that order. From paid leave to pay transparency to required notices, these states require constant knowledge updates. A consultant or outsourced HR provider who works mostly in other states may miss them.
7. How do you handle terminations and workplace investigations?
Ask them to walk you through their process step by step. Listen for documentation, consistency, and when they bring in legal counsel. Are the answers textbook regurgitation or experience-based with caveats and specialized recommendations?Do they know when a situation is above their pay grade?
8. Will this arrangement create co-employment?
A PEO becomes a co-employer of your staff. A consultant or outsourced HR department does not. Know which one you are signing up for and what that means for control of your policies and benefits.Some organizations are hybrids that call themselves BPO or ASO.Bottom line: Do they become an employer of record for your employees?
9. How do you price your services?
Hourly, project, retainer, or flat monthly fee. Ask what is included, what is extra, and whether your managers will hesitate to call because of the meter.The right answer depends upon your needs and your budget.Just ensure that you and your management team will not be making uninformed decisions to “save on billing.”
10. How fast do you respond?
Get a specific answer for routine questions and for urgent ones. “As soon as possible” is not a commitment.A service level agreement should be spelled out in the contract.
PRO TIP: Most HR consulting arrangements and HR outsourcing firms work on a fractional model… And that is ok.
This is a good thing because it is how you save money while getting expert guidance.So don’t picture them sitting by a phone just waiting for you to call.Just like an internal HR employee, they will be in meetings, on calls, at lunch, etc.You want a practical timeframe guarantee that isn’t unrealistically instant.If there is more than one person assigned to your account, that will help toward faster response times.
11. Can I speak with clients in my industry?
A dental practice, a manufacturer, and an architectural firm can have very different HR problems. References from businesses like yours tell you more than a general testimonial.
12. Can you consult on benefit plans and packages?
Internal HR professionals make recommendations and suggestions on benefit plans and costs all the time.As an employee, they can and should do that. However, what most HR consultants don’t know is that in most states, recommending specific plans or negotiating coverage for you requires an insurance license. Unless they are a licensed health and life insurance broker, they should not be advising you on your benefit plan.
If their answer is anything other than a) We are licensed brokers who can consult on your plans; or b) We cannot consult on benefit plans, but we will work with your licensed broker to administer them… That is a red flag.
HR consultant vs. outsourced HR department vs. PEO
The questions above apply to any outside HR help. The right answers depend on which model you choose.
| FACTOR | Independent HR consultant | Outsourced HR department | PEO |
|---|---|---|---|
| Who does the work? | One person, usually | An assigned team with senior leadership | A shared service center |
| Backup when someone is out? | Often none | Built in | Varies |
| Scope? | Projects or advice | Your full HR function, day to day | Payroll, benefits, and administration |
| Co-employment? | No | No | Yes |
| Can advise on your benefit plan? | Only if a licensed broker | Only if a licensed broker | You usually cannot keep your own plans. Employees move to the PEO’s plans. |
| Typical pricing? | Hourly or project | Varies | Per employee or percent of payroll |
If you need someone to own HR, not just advise on it, an outsourced HR department from My Virtual HR Director gives you a senior team for about the cost of one HR director-level employee. If compliance is the main concern, see our HR compliance consulting service. And if you are weighing a local firm against a national one, read why closer is better.
Ask us all 12
We welcome every one of these questions. Our team is led by SPHR and SHRM-SCP certified professionals, every role has a backup, and we serve New Jersey and New York employers on site and remotely. Our answer to question 12 is yes: we are licensed, so we consult on benefit plan design and strategy, and our licensed partner brokers handle quotes and placement at no cost to you.
My Virtual HR Director provides human resources support and experience-based HR guidance. Benefit plan design and strategy consulting is provided by our licensed senior HR leadership. We do not provide legal, tax, or financial advice. Insurance quoting, marketing, and placement are provided separately by licensed partner agencies. For legal questions, consult a licensed employment attorney.
Joseph Campagna, SPHR, SHRM-SCP is president and owner of My Virtual HR Director, a human resources outsourcing company serving small and medium sized businesses nationwide. My Virtual HR Director provides an executive level HR advisor to companies that can’t afford or can’t justify hiring a fulltime HR professional on staff.
With thirty years of experience dedicated to the HR profession, Mr. Campagna has honed his skills as an expert in compliance, talent management and employee relations. Bringing human capital management experience from start-ups, IT and biotechnology companies, employee leasing, and fortune 100 behemoths Mr. Campagna has filled his tool belt through generalist work, executive positions, and consulting opportunities with companies such as ADP, Merrill Lynch, and Johnson & Johnson. As Vice President of HR for biotech company Hemo Concepts, as well as the head of HR for the global IT solutions company, the Galaxy Group, Mr. Campagna created rich and successful organizational development and employee engagement programs.
Having worked with a diverse group of companies and clients in a broad spectrum of industries and environments, he brings a unique HR philosophy to every organization he works with. “HR is not the picnic department,” he says “but instead bears the full responsibility and the unlimited potential for a highly productive and efficient workforce. If HR systems are successful, the organization’s revenue should be increased.” From mergers and acquisitions, to IPO’s, to new product development, to divestiture Mr. Campagna has a true business background to support his HR Architecture.
Mr. Campagna is certified as a senior professional through both the Human Resources Certification Institute (HRCI) and the Society for Human Resource Management (SHRM). The HRCI designation of Senior Professional in Human Resources (SPHR) is an experienced-based examination certification. The SHRM certification is a competency based examination certification. Each is a premier designation in the world of HR and recognized by the Society for Human Resource Management of which Joe is a national member and former chapter president.
Mr. Campagna brings decades of helping small and medium sized businesses create HR structures such as employee handbooks, performance systems, talent management, training programs, and employee engagement. He knows how to deliver business results through HR aligned objectives.
Nearly 30 years of expertise and HR executive authority combined with a group health insurance license and certifications from the Society for Human Resource management and the Human Resources Certification Institute have given Joseph Campagna the guru status that has earned him leadership roles, board of director roles, and speaking engagements related to human resources.