What is an HR Consultant? A Comprehensive Guide

What is an HR Consultant?

Simply put, it's someone who specialises in handling the human resources aspect of your business. An HR consultant provides professional people management services to organisations on a fractional basis. This model allows small businesses to access expert support for only the portion of time they require, rather than committing to the overheads of a full-time employee.

They bring in expert knowledge to help organisations manage their workforce efficiently. These consultants can perform various roles such as advising on HR policies, aiding in recruitment processes, helping with employee training and development, and even people strategy and culture.

Does a small business need HR by law?

There is no legal requirement to have a dedicated HR professional, but employers must comply with UK employment laws, such as providing a written statement of employment particulars from day one. An HR consultancy ensures these legal obligations are met.

What services do HR consultants provide?

The scope of an HR consultant’s work is scalable, ranging from foundational administration to executive-level strategy. Core services include:

• HR Administration: Managing essential documentation, such as offer letters, holiday tracking, and the maintenance of employee records.

• Compliance and Contracts: Ensuring all employment contracts, staff handbooks, and policies are compliant with current UK employment law.

• Recruitment and Talent Acquisition: Managing the hiring process, including job profiling, candidate sourcing, and interviewing.

• Employee Relations: Providing objective guidance on complex issues such as disciplinaries, grievances, and performance management.

• Strategic Alignment: Working with business owners to ensure people processes support long-term business goals, including workforce planning and organisational design.

Why use an HR Consultant?

Businesses, especially small to medium ones, often juggle many responsibilities. This is where the expertise of an HR consultant comes in handy. They help streamline processes, optimise human resource management, and ensure compliance with legislation.

For small businesses, the fractional model is often more efficient than hiring an internal HR resource. The primary benefits include:

1. Scalability: You utilise and pay for only the support you need, whether that is a few hours a month for admin or a dedicated project for a business restructure, or a couple of days a week on a retained basis.

2. Breadth of Expertise: A consultant provides a range of skills that would typically require multiple internal roles, from basic coordinator tasks to high-level strategic planning.

3. Cost Control: Outsourcing eliminates the costs associated with a permanent salary, National Insurance, and benefits.

4. Business Goal Alignment: A consultant ensures that every hire and policy serves the specific growth targets of the company.

Benefits of Using an HR Consultant

Let’s talk about some specific advantages of enlisting the help of an HR consultant:

• Expertise: HR consultants are professionals trained in the nuances of employment law regulations and workforce management. They can help you navigate complex legal requirements that every business must adhere to.

• Tailored Solutions: Every business is unique, and an HR consultant will provide customised strategies that align with your specific needs and goals.

• Cost-Effectiveness: Instead of hiring a full-time HR manager, working with a consultant allows you to access high-level expertise at a fraction of the cost.

• Focus on Core Activities: By outsourcing HR management, you can concentrate on your core business areas without getting bogged down by administrative tasks.

How much does an HR consultant cost in the UK?

The cost of HR consultancy is not fixed; it scales according to the specific needs of the business. Typically, fees are influenced by three primary factors:

• Location: Rates in London and the South East often command a premium due to higher operational costs, though remote support can often be delivered at a more competitive rate.

• Level of Work: Fees vary depending on seniority/experience of the HR Consultant, whether the requirement is for foundational HR administration, operational support (such as managing a grievance or recruitment drive), or high-level strategy (aligning people processes with business growth goals).

• Engagement Model: Retained services generally offer better value for money than "on-demand" or ad-hoc support, as they allow for proactive planning and a guaranteed number of hours per month.

While many large UK consultancies and "Big Four" firms charge upwards of £150–£300 per hour, independent fractional consultants can offer a more accessible entry point for small businesses.

At Saltwater HR, our pricing is transparent and designed to reflect the level of expertise required.

Cost Comparison: Full-Time Hire vs Fractional Support

When hiring an employee in the UK, the gross salary is only part of the expense. Employers must also budget for Employer National Insurance (currently 15% on earnings above £5,000 for the 2025/26 tax year), mandatory pension contributions (3%), and additional costs such as equipment, software, and recruitment fees.

1. HR Administrator (Foundational Support)

An HR Administrator typically handles day-to-day tasks like record-keeping and basic onboarding.

Gross Annual Salary: £26,000

Employer NI (15%): £3,150

Pension (3%): £780

Annual Leave Value: £3,146

Total Annual Cost: £33,076

2. HR Manager (Operational & Management)

As seniority increases, the tax and benefit burden scales dramatically. A fractional partner provides the same high-level oversight for a fraction of the total employment cost.

Gross Annual Salary: £45,000

Employer NI (15%): £6,000

Pension (3%): £1,350

Annual Leave Value: £5,445

Total Annual Cost: £57,795

Fractional Benefit 

Unlike an internal hire, who is usually skilled at only one of these levels, a fractional consultant provides the full spectrum of support, scaled exactly to your current business size. You gain the same level of expertise and peace of mind for approximately 14% of the cost of a full-time hire. This allows you to redirect over £45,000 back into business growth. The primary advantage of the Saltwater HR model is that we do not limit you to one "level" of hire.

How do independent HR consultancies differ from larger consultancies and subscription-based providers?

When businesses look for HR support, they are often choosing between three broad models: independent HR consultancies, larger consultancy firms, and subscription based providers such as CIPD HR-inform or Croner. While all offer HR advice, their models and impact can differ significantly.

Independent HR consultancies typically work in close partnership with their clients. Advice is tailored to the organisation’s size, culture, and way of working, with a strong focus on practical, proportionate solutions. Support is relationship led, and documentation and processes are usually bespoke rather than template driven.

Larger consultancies offer scale and depth, which can be valuable for complex or large scale projects. However, this often comes with more formality, less continuity, and approaches that may not always suit smaller or fast moving businesses.

Subscription based providers are primarily compliance focused. They offer standardised policies, legal updates, and reactive advice, acting as a safety net for employment law risk. These services are often provided under lengthy contracts, and their professional indemnity cover may only apply if the employer follows the advice exactly as given. This can result in a more rigid approach, with limited flexibility to adapt solutions to the specific context of the business.

The key difference lies in approach. Independent HR consultancies operate closer to the organisation, combining legal compliance with operational understanding and continuity, helping businesses make people decisions that are legally sound, workable, and aligned with their values.

What is the difference between an HR consultant and an employment solicitor?

While both deal with employment law, an HR consultant focuses on the practical application of HR practices within a business. We provide hands-on support for day-to-day management and there to prevent issues before they get to tribunal. In contrast, a solicitor is typically engaged for high-level legal disputes, complex litigation, or when a case reaches an Employment Tribunal. While a solicitor provides a legal opinion on what the law says, an HR consultant provides the "how-to" on managing your people within those legal boundaries.

It is common for us to work alongside a solicitor as partners. In many cases, we will proactively seek advice from a solicitor on particularly intricate legal points to ensure our clients have the most robust protection possible. This ensures that the business is protected legally while the human element of the process is managed professionally and practically.

Can I use AI or a chatbot to manage my HR?

With the rise of Generative AI, many small business owners ask if they can replace HR with automation. While AI is a valuable tool for efficiency, it cannot yet manage the legal and human complexities of UK employment law.

Risks of using AI for HR management:

• Inaccurate Legal Advice: AI models can "hallucinate" or provide outdated legal information. UK employment law changes frequently (e.g., the 2025/26 legislative updates); relying on a chatbot for a redundancy process or disciplinary procedure carries high legal risk.

• Lack of Context: A chatbot cannot understand the nuance of a workplace dispute or the specific personality dynamics of a small team. HR often requires empathy and mediation, traits AI does not possess.

• Data Privacy (GDPR): Inputting sensitive employee data into public AI tools can lead to serious data breaches and non-compliance with UK GDPR regulations.

• Bias in Recruitment: AI algorithms can inadvertently learn and replicate biases, leading to discriminatory hiring practices that could result in an employment tribunal.

Where AI can help: AI is excellent for drafting initial job descriptions, summarising long reports, or creating training outlines. However, these outputs must always be reviewed and refined by a human HR professional to ensure they are safe, compliant, and fit for purpose.

The Fractional HR Solution

Saltwater HR bridges the gap between these options. We provide the expertise of a senior HR professional at a fraction of the cost, with the personal touch that a call centre or a chatbot cannot replicate. We ensure your business is not just compliant, but that your people strategy is actively driving your business forward.

In summary, if HR complexities are weighing you down, it’s high time to consider an HR consultant. They not only bring expertise to the table but also provide tailored solutions that can propel your business forward. Just think of them as your secret weapon for effective workforce management!

10 Questions to ask before hiring an HR consultant

Choosing an HR partner is a significant decision for any small business. To ensure you find a consultant who aligns with your culture and business goals, we recommend asking the following:

• Who will be my day-to-day point of contact? In larger consultancies, the person who "sells" you the service is rarely the one who does the work. At Saltwater HR, you work directly with the consultant who understands your business.

• Do you offer advice-only, or will you help with implementation? Some providers only tell you what to do (the law). You should ask if they will actually draft the letters, attend the meetings, and manage the process for you.

• How do you keep your skills and legal knowledge up to date? In HR, a qualification earned years ago is only as good as the consultant's commitment to Continuous Professional Development (CPD). Because UK employment law changes rapidly, you should ask a potential partner:

  • When did you last undertake professional training? A consultant who qualified 20 years ago but hasn't invested in recent development may have an outdated outlook or be unaware of the latest legislative shifts, such as recent changes to the Employment Rights Bill.

  • How do you manage your CPD? Look for a partner who proactively assesses their skills and attends regular updates or legal briefings.

  • How do you stay informed? They should be able to name the specific resources, legal updates, or professional networks they use to ensure their advice remains compliant.

• Are your contracts flexible, or am I tied in for several years? Be wary of long-term "rolling" contracts that are difficult to exit. Fractional support should scale with your business, not trap it.

• How do you charge, and what are the "extra" costs? Ask for a clear breakdown. Are there implementation fees, insurance premiums, or charges for "out-of-hours" calls?

• Have you worked with businesses of my size and sector? While HR principles are universal, the challenges of a 10-person tech start-up are very different from a 50-person manufacturing firm.

• What happens if I have an urgent issue? Ask about their Service Level Agreement (SLA). How quickly do they respond to emails or phone calls when a crisis occurs?

• Do you carry Professional Indemnity Insurance? This is essential for your protection. Any professional independent consultant should have adequate insurance in place.

Why choose Saltwater HR?

We offer the personal touch of an independent consultant with the strategic breadth often only found in larger firms. Based in West Sussex, we provide fractional HR support across the UK, ensuring that small businesses get senior-level expertise that is proactive, personal, and scaled to their specific budget.

Get in touch and find out how we can support you.