Fractional HR consultants: what they cost in the UK and when a small business needs one
By Liam Buckler, Deputy Head of News, Newspage ·
Fractional HR consultants are becoming more popular, as small businesses use them to navigate the challenges of increasingly complex employment law.
HR and fractional HR experts told Newspage what the role involves, what it costs and when a business needs one.
Instead of employing a full-time HR manager, businesses can hire fractional HR consultants on a part-time basis, without the financial commitment of a permanent member of staff.
Changes to employment rights and employer responsibilities mean organisations need to ensure their contracts, policies and procedures remain appropriate and compliant.
What does a fractional HR consultant do?
A fractional HR consultant helps businesses manage their staff and deal with workplace issues, providing expert HR support without the need for a full-time HR director.
Kate Underwood, Founder at Southampton-based Kate Underwood HR & Training, commented: "I have been a fractional HR director for 11 years. I just never had the fancy title.
"Fractional means a senior HR brain in your business a few days a month, who knows your people by name.
"Outsourced HR is usually a helpline and a template. One knows Dave. The other gives you a ticket number.”
How much does a fractional HR consultant cost, and when do you need one?
But when is the right time to bring someone in, and how can businesses make sure they're getting value for money?
Kate added: “Expect £400 to £800 a day, or retainers from about £500 to £2,500 a month, depending on days.
"When do you need one? When the owner is doing HR at 10pm. Usually somewhere around 10 to 15 staff, or the first time someone says ‘grievance.’
“A full-time hire comes later, often at 50 plus. The first three months: contracts and handbook fixed, live people problems sorted, managers shown what good looks like, then a plan.
"Not a pile of policies nobody reads. Before you sign, ask: who actually turns up?
"Can I reach you on a bad day? Will you train my managers or keep me dependent? You don’t need HR full time. You need it before it’s urgent."
How is fractional HR different from hiring a consultant?
The difference is that a traditional consultant offers advice, while a fractional HR professional works within the business, helping manage staff and make day-to-day improvements.
Tim Day, Founder at FractionALL Services, commented: "The beauty of fractional experts is that they are embedded and integrated into your business rather than outsourced.
"Consultant is not the right classification as they are typically hands-on in delivery bringing experience for rapid positive change that's on demand and highly concentrated value for money.
"Fractional works perfectly for small businesses that don't have the budget for a full-time hire but without losing out on accountability or ownership.
“Developing a solid people strategy at the outset, even pre-revenue in readiness to scale is a perfect scenario for a fractional HR professional to deliver.
"Rates and scope of works vary immensely. Often the scope is not the same after three months as originally expected but that advisory-led approach is exactly what drives the value from fractional consultants.
"I'd always encourage the conversation at the start to be all about the why and identifying the outcome for the client.”
