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A guide to what to pay for outside help

Suddenly your organisation needs to find external help. For us in HR, it’s a great opportunity to shine. We should sell against the traditional approach of hiring a big consultancy, who sell as much resource as possible, whilst keeping responsibility to a minimum. Article by JuliaBriggs, Director atInterimityLtd

Don’t think ‘they’ll take the problem away’. This is an opportunity. It allows you to develop internal skills through blending resources, save costs and get a better result. Hire a great programme lead, who reports into the relevant CxO for larger pieces of work, and use your own talent as much as possible. Supplement with one of three main types of independent help:

– selling change (consultant)

– project/senior resource (interim) or

– warm body (contractor)

So where to find these resources?

DO start to build your rolodex of trusted independents, using recommendation and referrals. You only pay the individual. Ask every good independent you know to make one recommendation.

DO hire the Programme Manager directly if you can’t use one of your own team. They will make the CxOs job much easier. Go for the maximum you can afford and task them to bring in a team, but check there are no kick backs. This happens more than you think. If stuck, use a great agency.

DO differentiate between a consultant and an interimand pay the right amount for the right work pattern and skills. A consultant may cost more on day rate, but you should save on work pattern, especially if you have briefed them properly and assigned the right task.

DO understand how to benchmark the day rate

For an interim – work out how much you would pay as a top end salary only for the type of role, eg: £100,000. Divide by 100 = £1,000. Multiply by 85%-90%. £850-£900 per day. Don’t get hung up on how much they earn. Independent workers are actually micro businesses, you pay for their flexibility and expertise (and they only do paid work 160 days according to the IIM, the rest is spent running their business).

For a consultant multiply by about 120% (£1,200 per day) or look at a fixed cost for the project. If you are looking to hire on FTC it doesn’t make economic sense for a good individual to take all the risk around flexibility and expertise but only get paid the same as a permanent employee. It’s a false saving.

DO avoid professional bodies You pay for their name and they use a consultancy who uses associates. One organisation paid £2000 pd to a Chartered Institute for a £650 pd associate. Ask for a breakdown of the chain and costs. If they won’t tell you, don’t use them.

DO go to reputable interim agencies Work with them exclusively and pay about 20% on the day rate.  Take care. Some of the prestigious names are shockers (I’ve been a client and a candidate). Find a great recruiter and stick with them. The Institute of Interim Managers has a list of them.Good ones will also source consultants for you at the same rate, even though it is not in their financial interests to do so.

DO take care when using consultanciesand hiring their associates – they will charge you 60 percent plus on top of the day rate. Acceptable if they are taking the project risk only.

And finally…

DON’T hire through your RPO. Delicacy and nuance aren’t their long suits. You also have to be quick. Good independents don’t hang around for long and they definitely don’t like dealing with RPOs.

So the next time that cry for help comes from the business think what a fabulous opportunity you have to really show what we in HR can do and how well we can do it. 

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