How to start a small HR consulting company

Written by maggie gebremichael
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How to start a small HR consulting company
Human resources consultants need a solid background in an HR environement. (consultancy image by Andrey Kiselev from

Human resources (HR) consulting companies work with small businesses, large corporations and non-profit organisations. If you have substantial experience in the human resources field, you may want to consider starting your own small HR consulting company. As a consultant, you might be asked to provide guidance about how to retain employees, improve employee morale, build leaders within the company or handle discrimination complaints. You might also be asked for guidance on compliance with employment law. You could handle select tasks, like hiring nurses from the Philippines or the Caribbean.

Skill level:

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  1. 1

    Determine the general services that you will provide, based on your experience and expertise. For instance, some businesses might need you to run background checks on potential new hires or interview executive candidates. You might operate as a full-service office and target small- to mid-size companies that either don't have an HR department or want to outsource the work.

  2. 2

    Select an appropriate company name and check available website addresses ( and are taken). Find a location that works well for you. Consider renting office space, especially if you will screen applicants for your clients.

  3. 3

    Review applicable local, state and federal regulations. Obtain a local business license and any certifications necessary. Consider enrolling in a course offered by the U.S. Equal Employment Opportunity Commission to stay current with employment discrimination law. If you will handle employment eligibility verification (I-9s), you might want to increase your familiarity with the federal E-Verify program.

  4. 4

    Plan a growth strategy for your business. Will you need a secretary, an assistant, a partner? At the beginning, or down the road when your business reaches certain benchmarks? Organise your business systems so you can manage effectively, with clear assignments and responsibilities, and a plan for backing each other up when necessary. Create a checklist that identifies daily, weekly and monthly HR tasks (payroll, site visits, leadership training classes) associated with each client. Establish a relationship with an attorney, on an as-needed or retainer basis, to help you with legal matters.

  5. 5

    Advertise your services continuously and highlight the multiple reasons why companies should hire you. For instance, you might describe the significant attention to detail and cost-savings that your small business can offer, compared to an in-house HR department or a larger outside firm.

Tips and warnings

  • Read HR-related publications and visit HR websites like Recruiters Network, and expand your contacts with peers in the human resources field, to stay current with industry news and practices and, perhaps, pick up leads for contract opportunities.
  • Avoid advising clients about matters with which you are unfamiliar, such as how to handle harassment claims if your expertise primarily lies in the hiring process.

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