Our consultants have some clients on retainer, and of course some form of retained advice service is common to most HR consultants. It makes sense all round – it means the client knows they’ll pay a certain, regular amount per month, rather than worrying about escalating fees, and it means the consultant can rely on some steady income, which is always welcome for self-employed individuals managing cash flow issues!
But sometimes there arises a question of additional charges. Committed and ethical HR consultants wanting to do the right thing and treat clients well often worry about charging extra, or feel bad doing it. So when it charging extra ok and when is it not?
Check your terms of business
Once you’ve got your terms of business sorted, other than making specific amendments when necessary, you probably never read them, and (lets be honest) your regular clients probably don’t either. But if you’re wondering whether to charge for something over and above your retainer fee, checking exactly what your terms of business and engagement letter to the client actually say is your first step. Hopefully you have previously made it clear exactly what is included, therefore you should be in a position to make a decision whether additional fees are appropriate.
Although it isn’t an approach we use at face2faceHR, some HR consultants structure their retainer based on a number of hours a month. It goes without saying that if you are required to work more than that in any given month, you can and should charge extra. The fact that you may not have worked all the required hours in previous months doesn’t matter – your terms are probably a certain number of hours each month, not a total amount for the year, to be used whenever, and you will have structured it like that for a reason – on the commercial basis that you won’t actually need to provide that many hours each month, and to protect you from having to do too much all in a short period.
Not in scope
A client may need or want you to complete some work that is not in the scope of your retainer service. Even if you feel bad about it, you should absolutely charge extra for that. Your fees are set where they are for a reason, and the client has accepted that. If you were quoting for a retainer to include whatever extra it is your client is wanting now, the fee would have been higher.
At face2faceHR we operate a limitless advice service, which we find works well. After some early experimentation, clients to whom the unlimited advice term was applied were actually no more needy, in fact less needy, than clients with a time limit. However, with no specific limit, we needed a mechanism to protect ourselves just in case, and this is in the form of a fair usage clause. This enables us to say to a client – “You are using us far more than would be reasonable or expected for an employer of your size, therefore we need to charge more”.
We have triggered this clause on rare occasions, and the client has always understood and accepted it. We tend to propose an increase in fees for a short time, then a review, with the intention of bringing fees back down to the ‘normal’ level as soon as possible. If you operate an unlimited service without the protection of a fair usage clause, it is advisable to include one, in case you get an exceptionally needy client!
Our consultants joke about the extent to which I encourage them not to cut prices and to charge what they are worth and not feel bad about it. But having said that, I have sometimes made exceptions. I don’t have retained clients any more, only a couple of very ad hoc ones, however I have had long-term retained clients for whom I’ve done a couple of things that would ordinarily be extras without any additional charge. This has only been in circumstances where they have been extraordinarily low maintenance for a significant period of time, and it feels fair to draft the odd new policy or pop in for an additional meeting.
But those are exceptional circumstances, and by and large, even where a client hasn’t been needy, they are still absolutely getting the benefit they are paying for in terms of that security of knowing someone is available when there is an issue, the comfort that any legal updates or policy changes will be covered, and the reassurance that they have a consultant who knows their business inside out and can give the quality of advice associated with that.
If you’re interested in talking to us about becoming a partner with face2faceHR, with bags of support, do get in touch.