Five Reasons to Hire a Compensation Consultant
The question often arises as to whether to develop your pay programs in-house, or spend the money to hire a compensation consultant. Below are five significant reasons to consider engaging a compensation consulting firm:
1. Time Factor – The consultant can focus on your issues, without being needed to put out fires, such as the ones you are constantly facing. The consultant can also focus on completing the project to meet your deadline, without any distractions.
2. Experience – A consultant brings to the assignment the breadth and depth of experience acquired from handling similar problems with a broad group of clients. Therefore, a consultant can quickly respond to your needs without having to “reinvent the wheel” or “learn on your dime”.
3. Objectivity – A consultant will provide unbiased solutions to your issues, and provide alternatives that best meet your needs and administrative capabilities, not those that benefit the consultant. Remember: Be cautious of “one size fits all” solutions, or where their solutions conveniently resemble the products they sell.
4. Cost/Benefit – Companies have tried working out the solutions themselves, and sometimes they succeed; however, the cost of failure can be immense, since it includes the value of lost opportunities, wasted management and training time, costly recruiting, and damaged credibility with employees. The consultant can laser focus on the problem and develop better solutions quickly.
5. Availability – Even highly-qualified staff needs help occasionally, which is why a consultant is important; they have the time, resources, and specialized experience to supplement a company’s regular talent.
Six questions to ask when hiring a Consultant
When you have made the decision to engage an outside compensation consultant, there are a number of important questions you must address:
1. Responsiveness – Did the consultant return your call quickly? How long did they take to prepare the proposal? Remember: if they don’t react quickly when you call before the contract is signed, they probably won’t be any quicker once they are working on your project.
2. Experience – Do they have specific experience in your industry and type of company? Are their solutions “canned” or are they tailored to meet your special issues, management style, and culture? Remember: There is a good chance that the concepts that worked somewhere else probably won’t meet the unique needs of your company.
3. Cost – Does the proposal cost make sense, based on what has to be done? Is the approach thorough and complete or do they only deliver a pretty binder with “blank pages”? Remember: If the price is too low, it could be a “lost-leader”, just to get in the door. If the price is too high, you are probably paying for their overhead and marketing, as well as their learning curve.
4. Deliverables – What will you receive at the end of the project? Will you receive concepts or the actual finished materials, documentations, formulas, etc.? Remember: It is extremely important that the deliverables you actual receive are everything you expect, in order that you have all the tools and materials you need, going forward.
5. Commitment - Will the consultant be available to assist you in the future? Does the consultant provide you the materials necessary to fully implement and use the program in the future, or are you tied to them forever? Remember: The Consultant’s responsibility is to provide the tools and training so you can handle things on your own; however, they should be available to assist your company when you want their support.
6. Relationship - Who will actually do the work? Will the consultant who sold the project continue to be available to you during the project phases? Remember: The person you are speaking with may only be a salesperson, not the consultant who will actually be involved with the assignment.
After you have decided to pursue an engagement with an outside consultant to assist you to resolve your pay issues, we hope you will consider Compensation Resources, Inc. as a resource.