Do Small Businesses Need an HR Consultant?

Technically, no.

There is no law in the UK that says a small business must employ an HR consultant.

But here's the question we think is much more useful:

If you employ people, why wouldn't you want an HR expert in your corner?

You don't need to wait until you have 50 employees.

You don't need to wait until something goes wrong.

And you certainly don't need to wait until you're facing a grievance, disciplinary issue or potential employment tribunal.

In fact, getting HR support from your very first employee can be one of the smartest decisions a small business owner makes.

Because your business might be small.

Your responsibilities as an employer aren't.

"But I've only got one employee..."

We hear this a lot.

"We're only a small business."

"I've only got two employees."

"We've just taken on our first member of staff."

"Surely we don't need HR yet?"

And it's understandable.

When you're building a small business, every pound matters. You don't want unnecessary costs, layers of bureaucracy or policies for the sake of having policies.

But employing someone changes things.

Suddenly, you're not just running a business.

You're an employer.

That means understanding your responsibilities around areas such as contracts, holiday entitlement, National Minimum Wage, workplace pensions, sickness absence, discrimination, health and safety, working time and employee rights.

And that's before you get into the day-to-day reality of actually managing people.

You don't need an HR department. You need HR support.

This is where an HR consultant can make a huge difference.

For most small businesses, employing a full-time HR manager simply doesn't make financial sense.

You might have five employees.

Or ten.

Or fifteen.

You don't necessarily need someone sitting in your business five days a week managing HR.

But having access to an experienced HR professional when you do need them?

That can be incredibly valuable.

Think of it like having an accountant.

You probably wouldn't employ a full-time accountant to sit in your office every day if you have a small business.

But you'd still want someone who understands your accounts.

HR is no different.

Outsourced HR gives you access to specialist knowledge without the cost of building a full internal HR department.

The benefits of having an HR consultant for your small business

So, what do you actually get from having an HR consultant?

Quite a lot.

1. You can get your employment contracts right from the beginning

Your first employee is exciting.

It's also the point where you start creating the foundations of your employment relationship.

A good HR consultant can help you create appropriate employment contracts and documentation that reflects how your business actually operates.

Rather than downloading a generic template and hoping for the best, you can have someone explain:

"This is what this clause means, and this is why we've included it."

That gives you – and your employee – clarity from day one.

2. You have someone to ask when you're not sure

This might be the biggest benefit of all.

You don't need to know everything.

You just need to know who to ask.

Your employee has been off sick for several weeks.

What do you do?

Someone has raised a grievance.

How do you respond?

An employee isn't performing.

What steps can you take?

Someone wants to change their working hours.

Can you say no?

You're thinking about making a role redundant.

Where do you start?

Instead of spending hours searching Google and trying to interpret employment law yourself, you can speak to someone who deals with these situations every day.

That's what good HR support should feel like.

3. You can prevent problems before they become expensive

HR isn't just about fixing problems.

In fact, we'd argue that preventing problems is much better.

A poorly written contract.

An inconsistent approach to employees.

A manager who doesn't know how to handle a performance issue.

A disciplinary process that isn't followed properly.

A poorly handled resignation.

A redundancy consultation that goes wrong.

These things can become expensive.

And the cost isn't always financial.

There's also the cost of:

• Your time
• Management time
• Lost productivity
• Employee turnover
• Recruitment
• Stress
• Disruption to the business
• Damage to your reputation

Having HR support means you can get advice before a small issue becomes a big one.

4. HR can help you build a great place to work

Here's where HR gets really exciting.

HR isn't just about employment law.

Good HR can help you create a business where people actually want to work.

Your HR consultant can help you think about:

• Employee engagement
• Company culture
• Values
• Leadership
• Performance
• Training
• Career development
• Reward
• Recognition
• Wellbeing
• Recruitment
• Retention

When you're a small business, your people can be your biggest competitive advantage.

You don't necessarily have the budget of a huge company.

You might not be able to offer every benefit under the sun.

But you can create a workplace where people feel valued, supported and listened to.

That's HR too.

5. You can become a better employer

Nobody starts a business because they dream of becoming an expert in employment law.

You started your business because you had an idea, a passion, a skill or an opportunity.

Being an employer is something that comes with growth.

And there is absolutely nothing wrong with saying:

"I don't know how to handle this."

That's actually a sign of good leadership.

A good HR consultant doesn't take over your business.

They give you the knowledge, confidence and support to make better decisions.

You remain the business owner.

You just don't have to figure everything out alone.

6. HR support can grow with your business

One of the best things about outsourced HR is that it can scale with you.

When you have one employee, you might simply need contracts, policies and someone to call for advice.

When you have five employees, you might need help with recruitment, onboarding and performance management.

At 15 employees, perhaps you're looking at more structured processes, employee engagement and management training.

At 30 employees, you may need a much more strategic approach to people management.

Your HR requirements evolve as your business does.

Your HR support should too.

So, when should a small business get an HR consultant?

Our answer?

As early as possible.

Not because we think every business needs a massive HR department.

Quite the opposite.

We think small businesses deserve proportionate, practical HR support that makes sense for their size.

If you're hiring your first employee, that's a great time to get advice.

If you've already got employees, it's not too late.

If you're growing quickly, it's probably time to put some HR foundations in place.

And if you're currently dealing with a difficult employee situation?

Don't wait until it gets worse.

Do small businesses legally need an HR consultant?

No. There is no general legal requirement for a UK small business to employ an HR consultant or HR manager.

However, employers do have legal responsibilities towards their employees.

These can include areas such as:

• Written employment particulars
• National Minimum Wage
• Holiday entitlement
• Working time
• Workplace pensions
• Sick pay
• Equality and discrimination
• Health and safety
• Family-related leave
• Data protection
• Disciplinary and grievance processes

The exact requirements will depend on your circumstances, and employment law changes regularly. You can find useful employer guidance through GOV.UK and Acas.

But having access to information isn't the same as having someone who knows your business and that's where an HR consultant can really add value.

HR isn't an expense. It's an investment in your people and your business.

We know that when you're running a small business, every expense gets questioned.

And that's exactly how it should be.

But HR shouldn't be viewed simply as another overhead.

Good HR can protect your business, support your people and help you grow.

It can give you confidence when you're making decisions.

It can help you avoid mistakes.

It can make difficult conversations easier.

It can improve your employee experience.

And it can give you something every small business owner needs:

Someone in your corner.

One employee. One hundred employees. We've got your HR covered.

Ready to make HR one less thing to worry about? Get in touch with IG-HR to find out how outsourced HR support could work for your business.

Need support? Contact support@ig-hr.co.uk