Fancy
the idea of a life as an HR consultant? Phil Boucher finds some answers to your
most frequently asked questions.
How
do I know that I’m the right sort of person?
If
you see consultancy work as a nightmare of long hours, constant headaches and
isolation then perhaps it’s not for you.
But
if you accept the difficulties as your penance for taking up the challenge of
greater autonomy, you could well be made for the role.
However,
before you do anything it’s a good idea to think very carefully about the sort
of person you are.
Analyse
yourself and decide if you have the temperament to cope. And ask yourself
honestly if you really want the extra hassle of organising your own tax and
national insurance, finding clients and working longer hours.
Also,
think about the skills you have and decide if they provide enough scope to
continue with consultancy work in the future. Remember that consultants have to
pay for their own training and equipment so you may need deep pockets to keep
up with the latest developments.
Will it improve the quality of my working
life?
If
you are self-employed you are able to choose where and when you want to work.
This can make a huge difference to your work-life balance.
You
have also escaped the world of office politics and moved into one where the
only person that has to be motivated is you.
However,
this has to be seen against the higher risk, greater uncertainty and constant
cashflow concerns that come with consultancy work.
As
work is often short-term and project-based there is also a continual battle to
meet deadlines and secure further work. This generally means working longer
hours.
The
amount of available work is also reliant upon where you live so you may find
yourself travelling more.
How do I start?
First,
choose your route:
• Go
self-employed immediately and build up your own client base, or
•
Work with other HR consultants as an associate while building up your own
business.
It
depends how much work you have secured and how much you forecast will come in
during the coming months.
Either
way you will need somewhat of a ‘leap into the dark’ mentality as you are
probably leaving the security of a considerate employer.
Other
routes are to work with one or more companies on a retained basis as their
outsourced HR arm. You could also maintain a salaried job but work part-time in
a consultancy capacity to see if you like it.
How do I know I won’t end up penniless?
You
don’t.
Whatever
route you take, it is important to be realistic about the likely work pattern.
At
first it can often be a case of feast or famine, with work and payments coming
in sporadically. It is important to remember that you will be responsible for
your own invoicing and payment chasing.
Do
not be proud. Do not sell yourself short, but take whatever work comes your way
– you are self-sufficient and have very little in the way of a safety net.
It is
therefore essential to make a full assessment of your finances before you take
the plunge.
Where can I go for help?
It is
best to talk to as many consultants as you can. Ask them about the pros and
cons of the work, and find out what you need to have in place before you make
the change.
The
Department of Trade and Industry (DTI) also runs centres called Business Links
(called Business Shops in Scotland) which offer a range of start-up advice.
Alternatively,
the small business adviser at your local bank may be able to help you. As will
the CIPD if you are a member.
Other
contacts include the Management Consultancy Information Service (020 8554 4695)
and the Institute of Management Consultancy (0207 566 5220).
How do I attract business?
A lot
of consultancy work relies on referrals from satisfied clients. But this
obviously takes time to build up.
To
begin with you have to use your industry contacts – before you actually switch
to full-time consultancy work, if possible.
Ask
them if they use consultants and, if so, what they use them for. From there you
will build an idea of what people are looking for.
But
along with your HR skills you will need to understand the market you are
operating in and the business needs of your potential clients (see below).
Much
of this takes time to develop through trial and error and many new consultants
are strong on HR skills but weak in other areas. However, over time it is
possible to hone your business and personal image to suit the market.
And
along with all of these you need to stay abreast of financial, legal and tax
matters to make sure that your business is above board at all times.
How much can I expect to earn?
When
you are deciding on a fee you have to take into account your overheads, sick
pay provision, pension contributions and profit margin.
Researching
the market will enable you to pitch your rates competitively. And, of course,
the more experienced you become, the more you can charge.
However,
there are a lot of consultancies out there. And many of them have been
operating for decades. So don’t expect to become a millionaire overnight.
What skills and qualities do I
need to go it alone?
Along
with HR skills, dedication and a will to succeed there are certain business
skills that successful consultants have perfected:
•
Business acumen – the ability to your clients’ problems and how to solve them,
along with an appreciation of the services being offered by your clients and an
overall understanding of the HR consultancy marketplace.
•
Marketing – many newcomers find it tricky to sell themselves, but as a
consultant it is one of the skills you have to develop to be successful. There
are no set rules about how you get you name known but it generally relates to
improving your business image and widening your network of business contacts.
•
Negotiating/Presentation – it is not enough to get through the front door. Once
you are face-to-face with a client it is important to impress upon them the
fact that you can do the job and are the best and most cost-effective resource
for the company. To do this you will be expected to make presentations and
negotiate a reasonable price.
•
Time management – essential if you are going to make it to meetings on time,
but also vital for ensuring that every issue of concern to your business is met
within the working day. As a consultant you are likely to spend time on tax and
financial issues almost as much as you do HR.
•
Official matters – as a consultant you will need to understand balance sheets,
develop business plans, manage cashflow, prepare accounts, and have an
awareness of the tax and legal issues affecting your business.
•
Interpersonal skills – “it’s not what you know but who you know” is just as
relevant today, particularly, if you can use the conversations you have to
generate business ideas and possible avenues for work.
Do
I have to set myself up as a company?
When
you become a consultant it’s best to contact the Inland Revenue as soon as
possible.
While
in some cases the change of position may not have made any difference to your
legal requirements, anyone who is self-employed has to register within three
months of leaving their employer.
This
can mean setting yourself up as a company or simply having a different tax code
– it depends upon your personal circumstances.
There
are also special rules relating to agency workers and people who wish to split
their time between employed and self-employed work.
The
good news is that the tax man is normally prepared to be flexible and willing
to offer advice.
Contact
your local Inland Revenue office or call their helpline on 0845 9 15 45 15.
How
do I go about drawing up contracts?
Once you have been offered work you need to be sure that
it’s guaranteed and that you will be paid at the end of it.
The
easiest way to do this is to contact the Institute of Management Consultancy on
020 7 566 5220. They will provide you with a list of standard
terms and conditions coupled with a full explanation of what it all means and
why certain items have to be included. This also provides a template that you
can amend to fit changing circumstances.
Open
to both members and non-members of the institute, contract advice costs between
£9 and £20.
Do
I need professional insurance?
For
total peace of mind it is recommended that you take out professional indemnity
insurance.
This
provides legal assistance for allegations of professional negligence and
compensation claims.
It
also enables you to take action against clients who are slow to pay or who have
treated you unfairly.
Some
insurers offer concessions if you are a member of the CIPD or other
professional organisations, so shop around.
Should I consider interim work
instead?
Although
the two roles appear very similar there is actually a very distinct difference
between consultancy and interim work:
Interims
are far more involved in the business operations of their client and are
expected to take hold of a department or organisation and lead it from within,
while consultants are employed to advise and offer new ideas.
Interim
managers also report directly to an organisation’s hierarchy whereas a
consultant remains an independent adviser at all times.
This
degree of immersion into an organisation may appeal to people who are looking
for a hands-on management role. However, if you are interested in consultancy
it may not provide the independence you require.
For
further information on interim management contact the Interim Management Association
or the Institute of Interim Management.
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WEBLINKS
Chartered
Institute of Personnel & Development
www.cipd.co.uk
Institute of Management Consultancy www.imc.co.uk
Management Consultancy Information Service www.mcis.mcmail.com
Department of Trade and Industry www.dti.gov.uk
Interim Management Association www.interimmanagement.uk.com
Institute of Interim Management www.inst-mgt.org.uk/iim/
Business Link www.businesslink.org
Inland Revenue www.inlandrevenue.gov.uk
