Human resource solutions is a complex area, particularly for smaller businesses that mightn’t have the means to justify a fulltime HR role. But this doesn’t mean it should be overlooked.
Incompliance could mean your business is susceptible to financial penalties and a tainted reputation. Avoid such circumstances by outsourcing HR.
Our insightful guide explores five ways HR consultancy can galvanise compliance in your company.
What is HR consulting?
Many businesses don’t have the budget for a human resources department, in such cases, SMEs may seek HR consulting opportunities. Whilst outsourcing HR represents a cost-effective approach, large corporations may elect to consult a third-party HR expert for their in-depth knowledge and objectivity.
Support for businesses comes in several forms with outsourced HR services. This might include identifying internal talent, recruitment and onboarding, performance management, improving employee relations, and conflict resolution.
What is compliance?
Compliance can be a confusing concept, so what is it? It’s the practice of adhering to rules, laws, regulations, and ethical standards. They’re vital to ensure your business operates legally, ethically and safely. Following frameworks to achieve this means protecting your employees, satisfying customers, and building reputation.
Types of compliance
Generally, compliance falls under two categories:
- External compliance: Following rules and regulations stipulated by outside bodies. This might include governments, regulatory agencies, and industry organisations.
- Internal compliance: Adhering to a company’s own processes and policies.
Key areas of business compliance
Here are the main areas businesses must be diligent with when it comes to compliance and best practices:
- Regulatory compliance: It’s imperative to follow legislation such as the Health and Safety at Work Act.
- Financial compliance: Companies must adhere to financial and tax laws, including payroll reporting requirements.
- Data privacy compliance: The General Data Protection Regulation (GDPR) stipulates guidance in protecting data collected from employees and customers.
- Environmental compliance: Businesses should follow waste management and emissions laws and strive to implement sustainable practices.
1. Conduct compliance audits
When you outsource your human resource solutions, your consultants execute compliance audits and risk assessments to establish if your HR processes are aligned with legal requirements and mitigate potential hazards.
The process for HR compliance audits
HR outsourcing brings your business an impartial, third-party perspective to thoroughly assess your organisation’s HR functions. This process includes:
- Establishing scope: The HR company will confer with your company, setting out specific targets for the audit. This might be a complete review of HR functions, or a focus on a particular area.
- Collecting information: Your HR consultant collates relevant data and documentation, including employee handbooks, contracts, recruitment records, pay and benefits, disciplinary procedures, and Health & Safety policies.
- Reviewing: Data and documentation will be scrutinised by your HR expert, ensuring it adheres to employment laws.
- Assessing efficacy: HR consultants interview managers and employees to understand the application of policies.
- Analysing & reporting: Learnings are recorded and categorised by risk level. This allows the HR consultancy to draft a comprehensive report, complete with compliance gaps and recommendations.
- Create an action plan: Using the findings, the HR expert helps devise a plan to rectify highlighted issues and implement improved processes.
- Deliver training: Ensuring best practices are upheld, HR consulting companies may offer training on the suggested policies.
If as a business you’re relying on internal stakeholders to administer HR processes, it is possible familiarity is causing them to overlook unconscious biases when it comes to compliance.
As aforementioned, HR outsourcing means your business benefits from objectivity, which is critical to ensure you’re not subject to legal costs incurred from incompliance.
2. Provide HR training
Firstly, a HR consultant will carry out a needs analysis to identify skill gaps and business objectives. With this information, they create customised training programmes for managers and employees.
Training usually consists of the following:
- Assessment: An evaluation of your company’s workforce, performance and long-term targets will be conducted. This identifies areas for improvement.
- Tailored: Instead of generic courses, HR consultants will develop unique training sessions with specific aims in mind.
- Delivery: Whether in-person or online, a plethora of methods can be used to educate employees, including engaging approaches like quizzes.
- Evaluation: Following the training, HR consulting firms study metrics to judge the effectiveness of their sessions. They’ll use said data to refine their coaching where necessary.
With thorough training, your workforce has essential knowledge to limit the likelihood of poor HR processes and non-compliance. In turn, your business is protected.
3. Recruitment and onboarding
Recruitment is a time-consuming task. HR consultants support this process with knowledge and refined approaches—all whilst being legally compliant to attract and retain quality professionals.
SMEs that lack the budget for an in-house human resource department benefit from this element, allowing them to compete with enterprises that have greater capital.
How HR consultants assist with recruitment
Outsourcing HR means your business gets strategic support during hiring processes. This means it’s more efficient and likely to result in attracting quality candidates. Here’s an overview:
- Planning and talent acquisition: HR experts can forecast your company’s future needs, ensuring you’re never without exceptional professionals. They also create detailed job descriptions and use data-driven tools to find relevant talent.
- Process refinement: Consultants can implement a fair, transparent hiring process, including leveraging Applicant Tracking Systems (ATS) for smooth screening and structured interview guides.
- Compliance and policy development: Ensuring recruitment meets employment laws and regulations is key, as it protects your business from legal risks and discrimination claims.
How HR experts aid onboarding
Support with onboarding from HR consulting firms is imperative. Research from Julia Phelan in Harvard Business Review found that 20% of new hires leave within the first 45 days, and around a third depart within 90 days.
This can be avoided with HR consultancy, here’s how:
- Structured programme design: They’ll incorporate the ‘5 C’s’ model, which is compliance, culture, clarification, connection and care. This framework helps ensure a warm welcome for new hires.
- Preparation: Before the employee joins your business, HR consulting companies will complete administrative tasks like contracts, payroll, and ensure IT equipment is in working order.
- Cultural integration: Activities to help introduce new hires and make them aware of your organisation’s values and targets will be designed as part of outsourced HR services.
- Manager training & support: As discussed, training is provided. This includes equipping managers with skills to welcome and integrate new starters, as well as give feedback politely and professionally.
- Feedback: Mechanisms will be established, like surveys or periodic check-ins, to gather feedback from new hires and learn more about the process’s efficiency.
4. Stay informed with changing legislation
Through their own commitment to continued personal development, HR experts stay abreast of legislative changes to ensure your company stays up to date and protected. There have been recent changes to the Employment Rights Bill—and there could be more.
Methods they might use to keep up to date with legal reforms and industry insights include:
- Professional development: HR professionals attend conferences, seminars, and take training sessions to improve their knowledge concerning employment law.
- Official sources: They’ll routinely check government websites and subscribe to alerts.
- Industry publications: Subscribing to HR legal news outlets and newsletters, as well as utilising legal databases.
- Networks: Membership to professional organisations provides expert guidance and a networking environment.
- Regular audits: Frequent audits of clients’ policies, allowing HR consultants to pinpoint and remedy gaps in compliance.
This level of dedication to HR services results in a proactive approach that safeguards your business from changes in the law. Essentially, your organisation becomes futureproof.
5. Manage employee relations and documentation
Employee relations can be strengthened with guidance on compliance, fair policies and resolving frayed workplace relationships. Outsourcing HR also means you’ll have your documentation drafted and reviewed, meaning it’s legally sound.
Employee relations management
Policy development
Relying on outsourced HR means consultants develop and review employee relations strategies that are parallel with your business aims and employment laws. This can be achieved through:
- Employee handbooks: Detailed handbooks outline your company values and procedures to be followed by new and existing employees.
- Establish procedures: Formal processes for dealing with grievances and managing discipline are set out.
- Support restructures: Should your company experience organisational change, HR consulting companies will consult with staff or unions to help with changes to employment terms.
Conflict resolution
Lending to their impartiality, they can address company disputes without the risk of biases. HR consulting can:
- Advise on cases: Some cases are complex (disciplinary, performance, grievance) and demand specialist knowledge, which HR experts will have.
- Conduct investigations: They advise, or lead, on workplace investigations, including sensitive matters like misconduct and bullying.
- Support negotiation: Manage discussions with trade unions or employee representatives to rectify problems within your business.
Promote positivity
Because of their experience, HR consulting companies can bring about a healthy and productive workplace by:
- Open communication: Implement frameworks that encourage clear communication channels between management and staff.
- Train management: Ensure managers have the requisite skills to manage staff effectively.
- Request feedback: Systems that allow staff to voice concerns means you can proactively make changes.
Management of documentation
Process documentation
Procedures that are documented creates consistency and compliance for your company. Here’s how:
- Template letters: HR consultants provide legally compliant templates. This is particularly useful for common scenarios like disciplinary letters and performance reviews.
- Company-wide policies: Procedures are routinely updated for handbooks, covering family leave, sickness, and your company’s codes of conduct.
- Standardise documents: For consistency, document formats and naming are standardised for easier retrieval.
Employee records
It’s vital your company follows data protection laws. Consultants manage employees’ data accurately and securely with the following methods:
- Filing systems: Physical or digital, they’ll set up filing systems to store employee contracts and other important information. Download our employment contract template here.
- Confidentiality & security: You’ll get advice from your HR consulting firm on stringent measures to protect sensitive information.
- Retention & destruction: Clear retention schedules to store documents legally as necessary, as well as managing their destruction.
FAQs: Five ways HR consultancy can improve compliance in your business
What is HR compliance, and why is it important?
It’s the process of following all laws and regulations pertaining to employment. It helps companies mitigate legal risks, protects organisations’ reputations, and contributes to a positive workplace.
What are common HR compliance issues businesses face?
Failing to keep policies and employment contacts aligned with the latest legislation, misclassifying employees, incorrect handling of employees’ wages, not conducting proper right-to-work checks, lax record-keeping, and not providing legally entitled leave entitlements.
How do HR consultants help companies stay on top of changing employment laws?
Employment laws are regularly reformed. HR consultants are dedicated to staying informed on the latest developments, ensuring company polices are legally compliant.
Concluding: Five ways HR consultancy can improve compliance in your business
Whether you’re considering HR outsourcing for something specific like compliance audits or support with recruitment, or if you want your outsourced HR services to overhaul your current processes, it’s a worthwhile method.
This approach isn’t exclusive for SMEs; corporations with financial strength also opt to outsource for impartial expertise.
Get expert advice on outsourcing HR from Peninsula UK
Manage your HR by outsourcing it an impartial expert. If your business isn’t compliant, you could be subject to substantial penalties.
Whilst outsourcing HR represents a long-term, cost-effective investment, it’s important you partner with a trusted company.
Peninsula offers expert advice on outsourcing HR for large and small businesses. Our service teams provide 24/7 HR advice from a HR expert which is available 365 days a year. We can help you find a solution when you work with our HR team.
Want to find out more about human resource management and HR support? Contact us on 0800 028 2420 and book a free consultation with one of our HR consultants today. Contact a HR expert today.
