When Warren Carter was transforming his Chula Vista, California, executive search company from a two-person virtual organization to a more conventional model with full-time employees, the company lacked the processes and expertise to attract, hire and retain the employees it would take to fuel Qualifind Inc.'s plan for success. "[To] make that transition from independent contractors to search consultants on payroll, you have to create infrastructure," says Carter, 43. "We weren't big enough to put somebody at a director of HR level."
Carter's solution: Hire an HR consultant to help draft policies, write manuals, design benefits and lay out career paths. The consultant, a 25-year veteran with HR director experience, also mentored the more junior HR manager Carter hired.
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Entrepreneurs should considering hiring HR consultants if they face a problem that exceeds their own expertise, says Mark Clark, associate professor of management at American University. Decide whether you need an overall strategy or just assistance with a specific function, such as benefits.
For strategy, go after experience and a broad skill base, Clark says. Larger firms are more likely to have a candidate with the comprehensive skill set you need, but they may also command bigger fees and insist on doing things their way, he adds. A smaller firm may be more inclined to customize services to fit your budget. Boutique consultants can also be a good choice if you are after specific, limited expertise.
Ask your professional and industry associations for referrals. Check candidates first for relevant experience and second for certifications from HR societies, Clark suggests. "Especially on the strategic end, you want somebody who's familiar with smaller organizations, because they run differently," he adds. Research consultants' backgrounds and methods by reading their websites, articles and books.
Qualifind's consultant proved key: Since retaining her in 2005, the company has grown to 18 employees and sales of $2.7 million. Says Carter, "We got big-company HR resources at a more affordable price."
Mark Henricks writes on business and technology for leading publications and is author of Not Just a Living.
Originally published in the November 2007 issue of Entrepreneur Magazine