Paying for HR Advice; It’s a Good Investment


Paying for HR Advice; It’s a Good Investment

Most Small Business owners struggle with cash flow at some point, and this can happen more often once you have staff.

You work hard to make sure that there is enough to make payroll and the associated costs as well as your production costs. That makes it hard to justify paying for Human Resources (HR) advice. Or does it?

There is a phrase that you either pay for the advice or you pay for doing it yourself. In many cases, business owners think this means that DIY is ok and will just take longer. In the case of HR advice, however, the cost of doing it yourself can be up to six months’ pay.

A recent case highlights the risk to Small Business of not getting good advice up front when the Fair Work Commission (FWC) decided that the termination of employment was unfair and the employee was due $25 000 or six months’ pay as compensation. Had this business owner with two employees sought HR advice she would have been advised that:

  • There must be a clear reason for terminating employment.
  • The reason given for terminating employment must be able to withstand scrutiny.
  • Timing and sequence of events will be considered by FWC.
  • Employees of small businesses (under 15 employees) can lodge an unfair dismissal claim once they have been employed for 12 months.

This case involved the employee swearing at his employer and a subsequent but unrelated complaint to the employer by a major customer. Essentially the employer was in a difficult situation and made the decision to terminate employment.

The question you as a Small Business owner might be asking is, “How do I know when I need HR advice?” and “How do I know I have the right HR advisor?”

These seven tips will help:

1. You need HR advice any time you are considering terminating employment or taking disciplinary action.

The Fair Work Act and Awards may seem clear when you Google them, but it is the way that those laws apply to your situation that is the speciality of an HR advisor.

2. Find an advisor who fits your style and way of working.

Just as you found an accountant and a lawyer who know their stuff and who you trust, you need to find an HR advisor that you feel you can work with. If you are a direct and to the point person, then you need advice from someone like that.

3. Keep your budget in mind but remember that the cost of getting it wrong can be extremely high.

Ask for an indication of what the total package of advice and support is likely to cost. Avoid being put onto a retainer or monthly support program up front unless you feel that is exactly what you and your business need.

4. Think about whether you need a large firm to support you or a smaller size advisor.

Just as businesses change premises as they grow, so too you might need to change advisors (in every professional service category) as you grow. Going to a large firm up front will not guarantee you the best result in terms of outcome or fees.

5. Ask your network who they would recommend and who they use.

It can be hard for HR advisors to provide client testimonials as most businesses don’t want the world to know that they have sought HR advice. Check in with your network and get a referral.

6. Check the credibility of the advisor. Ask if they have insurances and what professional memberships they hold.

When you are asking for advice about HR matters you need to know that you are getting advice from someone who knows the profession. You would not ask your accountant for legal advice so why would you ask them for HR advice?

7. Find an advisor willing to get to know you and your business.

Most good HR advisors will not charge for the initial consultation as that is the opportunity for both parties to get to know each other as well as for the advisor to establish if they can assist or not. For instance, a good HR advisor will not try to give you legal advice.

Given that employee costs are one of the highest costs in a Small Business it makes sense to get good quality advice on how to manage them and deal with challenges. Avoiding good advice is like having a flash car and trying to service it yourself; it doesn’t make sense.

There may be times when paying for HR advice seems like something you cannot afford, but it’s important to ask the question whether you can afford the risk and the penalty if you get it wrong.

Good HR advice is an investment in your people, your business and yourself.

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