Is there really a market for HR for small businesses?

When I’m talking to HR professionals who are considering self-employment one of the things they are often wondering about is whether there’s enough work out there to sustain them as a viable alternative to regular employment.

We do spend a lot of time talking to HR specialists who are considering this option about how we help them with marketing, but actually although we can give lots of information and support about marketing, obviously the work needs to be there in the first place.

Potential clients

According to the Department for Business, Energy and Industrial Strategy, at the beginning of last year, more than 99% of private sector businesses in the UK were SMEs. That’s clearly very high but obviously many of those are tiny one-person businesses who clearly have no need of HR services.

So let’s disregard those and look at potential clients. In fact 60% of private sector employment in the UK in 2017 was in SMEs, and the number of businesses employing staff increased by 3% from 2016. The number of potential clients out there for HR consultants wishing to target SMEs is growing.

Potential need

There could be tons of potential clients out there but if the services we offer aren’t something they’re going to need, that presents a problem. In fact the need is certainly not diminishing. Employment law still continues to change all the time, either because of new legislation or because of changing case law. The GDPR requirement for example applies to all employers in respect of employee personal data.

Brexit will not represent everything suddenly becoming easier for employers because existing law which originates from the European Union will still apply, there may be new domestic legislation and when anything changes in European case law a decision will need to be made by UK tribunals about whether to follow those developments or not.

And outside of the legal stuff, the various challenges employers have with managing their staff in terms of performance, absence, conduct and relationships will always be something a good HR consultant can help with, and will always provide HR professionals with the opportunity to really add value to a growing business.

What about the competition?

Sometimes people wonder whether there are too many HR consultants out there now; whether the SME market is saturated. The number of different options available does obviously depend partly on area, but of course it isn’t the case that the number of HR consultants locally dilutes the work each gets equally, and however many others there are, it’s about making sure the work comes to you.

We address the issue of perceived saturation in two ways. Firstly we make sure our consultants’ marketing operations are much more effective than those of other consultants in their area. We have clear marketing goals and a clear marketing strategy which we know works. We know from experience and feedback that this makes a difference when potential clients are identifying who they want to work with.

But secondly, we encourage our consultants to be confident in what they are offering and to relax about there being other HR consultants out there. Clients appreciate clarity and find it easier to choose which consultant to work with if they have a clear idea about what the consultant offers, who his/her typical client is, what services he/she offers which are especially relevant to the client, what his/her approach to HR is, and whether he/she has a personal approach to work that they like and can identify with.

When we do research with new consultants about competition in their local area, we do a differentiation exercise where we identify clearly how our new consultant is different from the competition. This helps them know what to emphasise in their marketing but also gives them confidence that giving a client options to find the right HR consultant for them isn’t a bad thing. It will help those clients who want the things our consultants offer to come to us, and will enable others to select someone who better fits their needs.

There’s definitely enough work out there, and as long as your marketing is good, you have a clear identity, a clear brand, good products and services, confidence in your ‘offer’ and differentiation from other consultants, the right clients will find you.

If you’d like to find out more about becoming a partner with face2faceHR, do get in touch.