The coronavirus instituted a period of significant economic uncertainty for businesses in every industry across the globe. The restrictions on social interaction also restricts businesses’ sales. The majority (75%) of small businesses are experiencing fewer sales. 

A Goldman Sachs survey of small businesses found that a majority (51%) of small businesses can only operate for a maximum of three months under the conditions of the pandemic.This uncertain economic landscape leaves a majority of businesses in need of cost cutting measures to remain viable. 

HR consulting agencies allow businesses to reduce costs associated with administrative and legal responsibilities. These outsourced partners provide the following benefits to businesses:

• Outside perspectives to spot areas for improvement
• Resources to reduce your time spent on none growth related tasks
• Expertise to limit liabilities and ensure compliance

Businesses should consider the following opportunities provided by HR consulting services to establish greater financial stability during this economic downturn.

• An Outside Perspective Can Improve Processes

Businesses can benefit from an objective evaluation of their operations and people management procedures.

Business owners focus on the management of everyday operations, especially in this moment of financial insecurity. This focus may prove advantageous to sustain operations. However, it may also limit your view of potential changes.

External consultants provide unbiased opinions that are impossible to attain from inside your organization. HR consulting services offer an unbiased perspective to identify opportunities to streamline processes and minimize your expenses of resources. An HR consultant may be able to identify unnecessary programs within your organization. These may include unused voluntary benefits.

Consulting agencies can also craft a survey to understand employees’ preferences. A simple and cost-effective solution to craft a survey is Google Forms. The survey application is included with Google Office suite, which means you and your employees only need to have a Google account to participate.

Source: Zapier.com

The application is free and permits collaboration for you and an HR consultant to craft survey questions about employees use of benefits. You can toggle between multiple choice, checkboxes, and short answer questions to collect a variety of responses. The data is automatically collected in a spreadsheet for easy analysis.

HR consulting companies can also review employee salaries and compare them to the rest of the market. This process is not to reduce salaries, which is an unpopular measure that would reduce morale. Rather, an HR consulting firm can help you to implement reasonable measures such as a red circle policy. This involves a temporary freeze on the highest paid employees or employee salaries that are more than the market average.

Small businesses can improve their operations through the fresh perspective offered by an HR consulting company to remain competitive in an uncertain time.

• Manage Opportunity Costs

Businesses can transfer the management of HR functions to HR consultancies to invest more time in growth opportunities during a moment of economic contraction.

Small business executives spend an average of 16 hour a week performing administrative tasks. This time spent completing these administrative tasks is a significant loss in opportunity. HR consulting companies offer a vast range of services that includes payroll processing, benefits administration, recruitment, and training.

By letting an HR consulting firm manage a few or all of your HR tasks, you can invest more time in core growth activities. Instead of spending hours filing payroll taxes or workers compensation claims, you can spend time developing products or securing sales. Businesses that engage a PEO (professional employer organization) grow 7%–9% faster than those that do not. 

From PEOs to AMOs, the HR outsourcing market is diverse with different offerings. You can choose between providers and their services to tailor a solution that fits your unique needs. Businesses can reduce their opportunity cost by transferring timely administrative tasks to an HR consulting agency.

• Limit Risk to Avoid Penalties

HR consulting services minimize businesses’ risks by ensuring policies, documents, and procedures are compliant with government regulations. Businesses lose an excess of $85 billion annually to operational risks such as mistakes, errors, and external events. A small reduction in operational risk can result in significant cost-savings.

HR consulting firms agencies offer expertise as well as benefits and compensation management services. The firms can review existing and future policies to ensure compliance with federal, state, and local laws. These intricate processes are only made more complicated by the changeable health and safety standards of the current moment. 

The economic downturn and the widespread transition to remote work leaves businesses at higher risk for an infraction. Small businesses that do not keep precise time and wage records may unwittingly commit a violation of The Fair Labor Standards Act (FLSA). The FLSA sets specific criteria for employees to gain an exemption from overtime.

An all hands-on deck moment, employees may be more likely to work longer hours. However, the constant changes in external circumstances and the stresses of sustaining operations make it difficult to maintain accurate records. 

These changes increase the risk of committing wage theft. There are several forms of wage theft including not paying for overtime and not paying employees for all the hours worked. Under the FLSA, the U.S. Department of Labor may impose a monetary penalty of over $2,000 for a violation.  

HR consulting firms maintain digital records of employee information including work hours to ensure that you remain compliant even during the chaos of a global pandemic.

It can be difficult to maintain detailed records with the consistent changes to everyday operations during the pandemic. HR consulting services ensure compliance to ensure that you don’t infringe on federal, state, and local labor and tax regulations.

HR Consulting Firms Can Optimize Operations to Reduce Costs

HR consulting agencies offer services and industry expertise that can help to reduce costs during an economic downturn. With the help of an outside perspective, you can find ways to maximize their resources and further streamline their processes.

HR consulting firms manage administrative tasks, which allows you to invest in critical activities to stimulate growth.Small businesses can limit their liabilities with the tools and expertise of HR consulting agencies, which remain up to date with legal standards and employee data. Small businesses should consider HR consulting services as part of a solution to cut costs during this period of economic contraction. 

Kate Russell is an Editorial Associate for Clutch — an Inc. 1000 private company that helps decision-makers determine the best B2B service providers to solve business challenges. She is also an HR research and content lead.