Let’s cut to the chase: It can be very hard to decide how to price consulting services in the Human Resources sector yet it is so important.
There are so many factors involved in developing a successful pricing strategy, including industry, client size, service area, pricing model, level of competition, the health of the economy, and more.
To make matters more complicated – all of these pricing factors are constantly evolving so nothing is ever set in stone. This can be a blessing or a curse, depending on how you look at it.
In this article, we will share:
- General industry pricing guidelines for HR companies.
- A range of real-life pricing models being used by 50 HR-related consultancies around the world right now.
- Pricing advice from successful HR-related consulting firms around the world.
We’ll look at:
Before we get started . . .
Like some help growing (or starting) your HR-related business?
Overview Of The Main Pricing Models
Setting the right pricing strategy for your HR consulting services is essential to achieving a profitable and successful business. There are several options available when trying to work out how much to charge for HR consulting, including:
- Hourly Rate
- Day Rate
- Monthly Subscription/Retainer
- Annual Subscription/Retainer
- Fixed Price Per Project
- Percentage of New Hire Salary
- Percentage of Value (Savings Achieved, Revenue Increase, etc)
When selecting which pricing model to use for HR consulting services, it is important to understand how each model affects profits, customer perception, and satisfaction.
“I am currently using a pricing table to help me come up with retainer or project amounts. I base it on an hourly amount and estimate the hours/work required and offer a retainer amount.”HR Business Leader (Name provided)
Value-based pricing takes into account the perceived value of your services in comparison to other alternatives within the market.
The value-based approach works well when there is high competition among similar consultancies competing where companies looking at paying premium rates would only select them if offering superior levels of advice due in part to specialized knowledge or expertise offered – it could seem more expensive than its competitors but might pay off over time because it aligns with buyer’s needs and offers long-term benefits instead of just hourly tracking.
“We cost our retainers based on headcount and then use that to determine roughly how many hours will be needed per month. We then multiply that x c£150 per hour.”HR Business Leader (Name provided)
Time-based billing charges clients based on the number of hours, days, weeks, or months worked by consultants. This can sometimes be rolled up into a retainer model.
Always calculate rates including extra time in case things take longer than you anticipated.HR Business Leader (Name provided)
Hourly billing may work best for businesses with varied projects allowing both parties clear visibility into billings as these can vary wildly from month-to-month depending on what kind/type/amounts of jobs get requested at any given moment by either side – making forecasting budgets difficult.
“I prefer project pricing but have been burned too many times by clients who weren’t able to provide what we needed as the project moved on. I then had to renegotiate the deal and that was very awkward. So unless the service is something i have complete control over, I use hourly billing.”HR Business Leader (Name provided)
HR Consulting Fees Guide – How Much To Charge For HR Consulting
It helps to have an understanding of the market when looking at how to calculate your rates as an HR consultant or HR consulting firm.
We recently asked some of our clients and network for feedback on how they currently structure their fees for their HR-related consulting services.
We heard back from over one hundred HR businesses and here’s how the fee structure for HR companies varied…
Researching competitors and industry trends can provide valuable insights into what clients are looking for and how best to price services.
“Ask around! Find out what your competitors charge and what the range of pitched and the range of successful (can be v different!) pricing is for particular kinds of projects.HR Business Leader (Name Provided)
Competitive analysis can include a SWOT analysis to examine the strengths, weaknesses, opportunities, and threats of others in your part of the HR sector. Such an analysis enables firms to create strategies that differentiate their offerings from others while leveraging their unique value proposition.
“Don’t undervalue yourself (easy to do in the early days), don’t give discounts, be clear in your proposal as to your pricing structure so to avoid any confusion later on.”HR Business Leader (Name Provided)
In a moment, we’ll take a look at the feedback provided by those HR consultancies.
But first, let’s look at some general industry information relating to consulting fees…
HR Consulting Fees Guide – How Much To Charge For HR Consulting In The US (Background Data)
The B2B service matching website ProMatcher estimates an average HR consulting fee in the US of $142.38 per hour with a range of $96.19 – $188.57.
One of our many excellent podcast guests, Liz Steblay of PICA estimates general management consulting hourly rates to range from $75 (for less than 7 years’ experience), $125 – $175 for 8 – 14 years), up to $175 – $325 per hour for 15+ years of experience. Liz also shares a great tip: propose a range (eg. $180 per hour to $220 per hour) where the final hourly rate depends on the length and complexity of the project. This gives you a little more wriggle room and the client doesn’t want to look cheap by going for the lowest number.
“Figure out how many hours a project will take and then double it! Projects always take longer than you think.”HR Business Leader (Name Provided)
Here’s a handy online spreadsheet from the CRM software company, Copper. The spreadsheet helps you determine your required hourly rate as a consultant. Remember to add your expenses to get a true (if ballpark) estimated rate.
If you are planning to be self-employed and you’re wondering about taxes, here’s a handy online calculator from the accounting software company, Quickbooks.
HR Consulting Fees Guide – How Much To Charge For HR Consulting In The UK (Background Data)
The consulting website Consultancy.co.uk found that a freelance consultant working at Analyst level charges on average a day rate of £350, which translate to just under £44 per hour. An independent consultant working at Associate or Consultant level has a day rate of £540, with that amount rising to £650, £850 and £3,000+ for Manager, Senior Manager and Director level respectively.
“Ask around! Find out what your competitors charge and what the range of pitched and the range of successful (can be v different!) pricing is for particular kinds of projects. Sell to P&L holders / FD rather than HR. Sell fixed price not day rate – changes the perception around value of service, plus saves on admin and false economies. Not exactly pricing, but really important I find to be very specific about what you do and how it creates measurable value – and to sell outcomes and impact not process or technical input.”HR Business Leader (Name Provided)
Startups.co.uk estimate the average rate for a freelance HR consultant to be £80 per hour or £640 per day.
The accounting company Crunch has a day rate estimator you can use for general guidelines.
Here’s a handy online calculator that converts your UK employee salary to an estimated hourly rate (it doesn’t take business costs into account) as a contractor.
Researching competitors and industry trends helps HR consulting firms remain agile in their approach to pricing services competitively without sacrificing value for money considerations.
Managing Expenses & Margins For HR Service Pricing
Understanding your expenses is an important aspect of pricing HR consulting services.
Consulting firms need to accurately account for travel, training, and other costs that are incurred during the course of delivering their services. These expenses can quickly add up, especially if consultants are required to travel frequently or provide specialized training sessions.
When incorporating these costs into pricing strategies, it’s essential to ensure that they are transparent and reasonable from a client’s perspective. If excessive fees are charged for expenses such as airfare, lodging, or meals, clients may view this as a form of price gouging and seek alternative service providers. Alternatively, if the consultant absorbs all the cost themselves this will quickly erode any profitability.
Where project costs may be involved, our general advice on expenses is to set up the administration of new projects so that the client’s own Accounts Payable department pays your expenses directly. For example, you find the appropriate flight details and then the client company books and pays for the flights. It’s not always possible but always try for it first to protect your cash flow.
Avoid Scope Creep
Managing scope creep is also important in any project to avoid unplanned costs and preserve your profit margins.
“Stick to, and define, your boundaries early on. If you don’t, the client will quickly do this for you which then impacts your potential to have the most success.
Better to under promise and overdeliver. Early on when first starting out I did the opposite. This was more difficult for me to deliver the quality of work I wanted to as I was stretched too thin.”HR Business Leader (Name Provided)
As a consultant, it’s important to set clear expectations with clients at the beginning of the engagement and define all deliverables that will be included within the agreed-upon scope. Any changes to this scope should be clearly communicated and evaluated for potential impacts on the timeline, budget, and overall project success.
To manage scope creep effectively, consultants should establish a change management process that outlines how changes will be requested, evaluated, approved or rejected, documented, and communicated. It’s also critical to keep track of time spent on tasks so that any additional work can be invoiced appropriately.
“I advise being upfront and transparent about pricing. Its a business relationship and its important to be willing to have a fee related conversation. This will help protect against ‘out of scope’ work since it will allow you to have a conversation as the request comes to you.”HR Business Leader (Name Provided)
Ultimately managing scope creep comes down to effective communication with clients throughout the entire consulting engagement. As you build trust with your clients through transparency about what services are included in your package offerings and what would require an extra fee aligned with a win-win mindset; you’ll increase your ability to provide value while keeping everyone involved happy without being underpaid for over-delivering.
Leveraging Technology: Tools for Pricing and Billing HR Consulting Services
One of the key tools that HR consulting firms can leverage to effectively price and bill their services is technology. There are several software solutions available in the market, such as:
- Automated invoicing systems such as Xero, QuickBooks, etc.
- Time-tracking apps to manage time-based billing. Check out Episode 198 of the A Better HR Business podcast where we interview Dean Mathews from OnTheClock (Employee Time Tracking System).
- Marketing software to streamline the client acquisition process. Check out Episode 188 – ‘Cool Software To Help HR Consultants Generate More Business – with Reuben Swartz of Mimiran’.
- Project management software to keep everything running smoothly. Check out Episode 161 – Supreet Tare from Anywhere (Work operating system software for consultancies & tech firms).
These digital tools enable consultants to streamline their billing processes and accurately track their hours worked on a particular project.
Moreover, technology can also help consultants analyze data related to client engagement and pricing trends. By using analytics platforms, consultants can identify which services are most in-demand among clients or which areas of expertise require more investment from the firm’s perspective. This information can then inform decision-making around pricing strategies by ensuring that rates reflect market value while still allowing for profitability.
Overall, leveraging technology is essential for HR consulting firms seeking to price and bill their services effectively. Not only does it allow for smoother operational processes but it also enables informed decision-making based on data-driven insights. In a competitive marketplace where demand for specialized skills continues to grow rapidly, utilizing these technologies will be critical for success over the long term.
Upselling and Cross-Selling: Maximizing Revenue Opportunities
Upselling and cross-selling are essential tactics for businesses to increase their revenue opportunities and create a more profitable HR business. Upselling involves encouraging customers to purchase a higher-priced version of the product or service they are already considering. On the other hand, cross-selling entails recommending additional products or services that complement the customer’s initial purchase to achieve better results.
A crucial aspect of upselling and cross-selling is understanding your client’s needs and offering solutions that add value. By doing this, you build trust with your clients, who will be more likely to engage in repeat business with you. Additionally, it creates an opportunity for you to showcase your expertise by providing customized solutions tailored to each client’s needs.
“One of my first ever HR consulting clients many moons ago required an employee handbook. This led to an ‘upsell’ of briefing sessions with employees to faciliate handbook signoff. Once completed, this led to futher higher-priced work running management training sessions for the leadership group. The easiest marketing method of all is simply to do good work for your current clients and then ask if you can help them in other ways.”Ben Geoghegan (Get more HR Clients)
To maximize revenue opportunities through upselling and cross-selling efforts, companies should ensure their teams have strong communication skills and know-how to identify potential upgrade options that can improve customer satisfaction while driving increased profitability. Ultimately, these strategies can help boost overall conversion rates while delivering greater value for both clients and businesses alike.
Negotiating with Clients: Tips for Successful Pricing Discussions
Negotiating with clients can be a nerve-wracking experience, especially when it comes to discussing pricing. However, it is important for consulting firms to understand the value they bring to clients and how this translates into pricing.
“Even if it’s a set price, list the hourly rates for work outside the scope. Put an expiration date on proposals. Include an expiration date on the contract with the option to renew; this allows you to change hourly rates.”HR Business Leader (Name Provided)
Successful pricing discussions start with understanding what the client needs and wants from your services. Ask questions that will help you determine their expectations, goals, and budget.
Once you have established these factors, it is essential to communicate clearly and confidently about the expertise and value that you offer as an HR consulting firm. This might include highlighting specific case studies or testimonials that demonstrate past successes in helping similar companies achieve their goals through effective HR strategies.
“Charge more than you think they will sign off, they normally will still go with it if you have done a good enough job of convincing the decision makers during the bid/pitch phase.”HR Business Leader (Name Provided)
Finally, be prepared to negotiate on price while keeping in mind both profitability for your firm as well as demonstrating clear ROI for your client’s investment in your services.
In summary, successfully negotiating with clients around pricing requires a deep understanding of their needs along with clear communication about your expertise and value proposition as an HR consulting firm. By following these tips gleaned from industry data and successful consulting firms’ experiences, you can ensure profitable negotiations while also delivering high-value solutions for your clients’ HR challenges.
“Establish budget early on – you could provide top notch service but if there budget needs to be there. Never discount – slim down your offering.”HR Business Leader (Name Provided)
Communicating Your Value Proposition: How Will You Differentiate Yourself?
Communicating your value proposition is essential in differentiating yourself from other HR consulting firms and a crucial part of your HR business marketing strategy. It’s important to identify what sets you apart from the competition – whether it’s a specific area of expertise or service offering, experience working with niche industries, or a unique approach to handling complex business problems.
(Remember to get in touch with us at Get More HR Clients if you need help with this).
Once you have honed in on your strengths, focus on communicating them through every aspect of your marketing strategy.
When it comes to pricing HR consulting services, make sure that your rates reflect the value that you bring to the table. This includes not only your level of expertise but also the impact that your services can have on clients’ businesses.
Don’t be afraid to articulate how hiring an expert in HR consulting will ultimately save companies time and money by optimizing their processes and improving performance across all levels.
“Get comfortable with your worth and value.HR Business Leader (Name Provided)
Don’t sell yourself short nor apologise.”
By clearly communicating this message – and supporting it with data-driven evidence – potential clients will feel more confident in investing in your services instead of going with a cheaper option without proper credentials or recommendations.
In summary, differentiation starts with identifying what makes you unique among competitors and then effectively communicating those factors through strong messaging and measurable results-based outcomes for clients.
While you’re here . . .
How To Price HR Consulting Services – PRICING EXAMPLES From Other HR-Related Companies
Here’s a reminder of the informal data we collected from over one hundred HR consulting businesses . . .
Hourly Rate pricing was the most popular, followed by Monthly Retainer and then Fixed Price Per Project:
- Hourly Rate = 36%
- Day Rate = 7%
- Monthly Subscription/Retainer = 25%
- Annual Subscription/Retainer = 3%
- Fixed Price Per Project = 23%
- Percentage (of Value/Savings/New Hire Salary/etc) = 4%
- Other = 2%
Below is just some of the very interesting qualitative feedback we received when we turned to our network for some examples of how they price HR consulting services . . .
(Remember to get in touch with us at Get More HR Clients if you need help winning more new business).
|Location||What does your typical client look like?||How do you usually offer your HR services?||How much do you typically charge for your HR services?|
|United States||Very small company, from 5 to 55 employees||Hourly Rate / Fixed Price Per Project||$114 per hour|
|Canada with US & UK clients||All types||Hourly Rate||$170/hr, charge travel time, recruiting is done on a % of annual salary+bonus|
|Australia||3-50 employees. Range of industries||Hourly Rate / Day Rate / Monthly Subscription/ Retainer / Fixed Price Per Project / Other||$240 per hr for ad hoc work. The day rate is $1200. If scope is defined, will quote a project fee but not necessarily fixed. Not prepared to share the details as commercial-in-confidence and it wins me a lot of work (and you work with a lot of HR businesses). Have a couple on retainer but work with mostly small- to micro-businesses and a retainer isn’t attractive. That’s why they all leave Employsure eventually as they don’t like “set and forget” lock-in contracts.|
|United States||Non-profit, 50+ employees, anywhere in the US||Fixed Price Per Project||$300/hr|
|United States||CEOs of startups||Monthly Subscription/ Retainer||$5000/month for 7 hours a week|
|United Kingdom||Tech, UK-based, established HR but no reward in-house||Day Rate / Fixed Price Per Project||£1000 per day based on 7.5 hours. Fixed price for project work|
|United Kingdom||Up to 10 employees.||Hourly Rate / Annual Subscription/ Retainer||£80 per hour ad hoc|
Discount for multiple hours. The discount depends on the piece of work.
Retainer option from £250 per month depending on number of employees.
|United Kingdom||Has an overstretched or transactional HR department that lacks the skills needed to deliver a project, not sector, size, or location specific.||Hourly Rate / Day Rate / Fixed Price Per Project||£85-125 per hour|
£600-800 per day
Projects vary but can be £5000-10000 depending on the amount of work needed.
|USA||All types. Primarily virtual and not in-person||Fixed Price Per Project||1:1 Coaching – $2k|
1:1 consulting…Includes ■1 hour weekly consulting,: ■1 hour biweekly group coaching:, ■1 VIP day group training (3hrs), ■FB Community, ■email response within 24-72 hour response
|Canada||Seniors’ homes||Monthly Subscription/ Retainer||$2500/month|
|United Kingdom||<50 people, no HR but we have worked for a client on a project that did have HR but had gaps and was more than 50 people. The charge was higher.||Hourly Rate / Day Rate||Day rate range from £500-£750 depending on size of the organisation & scope of the HR Support. Hourly rate is between £99-£125 again depending on the above.|
|United States||A variety.||Hourly Rate||Depends on the service and location $135-$300.|
|United Kingdom||Medium-sized business 2000 – 5000 employees||Day Rate||Tend to charge £1000 – £1500 per day depending on the potential of the opportunity for additional work (of any kind).|
|United States||For a one-month project, charge $3000 depending on projects and efforts of those involved in the project +100%||Hourly Rate||Estimated hours – hourly rate|
|United States||Mid-large||Fixed Price Per Project||For an organizational assessment, we typically charge between $10K to 15K depending on the size of the organization. Everything else varies wildly and using that as an answer to this question makes me realize that that probably should not be the case|
|UAE||Small business||Monthly Subscription/ Retainer / Fixed Price Per Project||For a one-month project, charge $3000 depending on projects and efforts of those involved in the project +100%.|
|EU||Midsize to corporate, multiple industries. Mature HR department||Hourly Rate / Monthly Subscription/ Retainer||For our technology platform: 3€/user/month or 500€/team/year Our consulting activities: 1950€/day|
|United States||One type is a small to medium size with no HR dept and needs help with infrastructure, employee relations, and projects. Defined projects are often with larger companies where they need outside expertise or a team to do intense work for a short time.||Hourly Rate / Day Rate / Fixed price per project||For projects with a defined scope and stop/end timeframe, we charge a set price. For projects and ongoing services, it’s an hourly rate ($175-Principal, $135-Senior, $100-Consultant, $65-85-Associate). For training, we charge by the half or full day.|
|United States||Any industry. Does not have an HR department.||Hourly Rate / Monthly Subscription/ Retainer / Fixed Price Per Project||For up to 50 employees, we charge $4500 for 26 hours of HR support per month. If they go over, we charge $175 per hour.|
|United States||Small business or Startup, up to 100, doesn’t have HR fully established||Fixed Price Per Project / Percentage (of Value/Savings/ New Hires Salary/etc)||Handbook $1500 Recruiting 10%|
|India with clients in USA and Australia||Any industry with small or no HR department.||Monthly Subscription/ Retainer / Fixed Price Per Project / Percentage (of Value/Savings/New Hire’s Salary/etc)||Small to medium-sized business.|
|United Kingdom||Any industry but a lot of salons, mostly established businesses, some employing for the first time but mostly already employing, they don’t have an HR department, headcount ranges from 2 to 200 (but mostly around 10-30)||Hourly Rate / Monthly Subscription/ Retainer / Fixed Price Per Project||Hourly rate around £90. Monthly Retainer ranges from £100 to £400. Fixed project fee varies according to project. Fixed fee for contracts of employment and staff handbook ranging from £170 to £700|
|United States||Small to medium sized business.||Hourly Rate / Fixed Price Per Project||Hourly rate of $150.|
Employee handbooks fixed range: $1,500-$2,000
|NZ||SME/ no in-house HR Department, variety of industries, startup to established. Tend to currently be less than 30 staff||Hourly Rate / Monthly Subscription/ Retainer / Fixed Price Per Project||Hourly rate varies between $140 and $200|
|United States||25-200 headcount||Monthly Subscription/ Retainer / Fixed Price Per Project||Currently using a pricing table to help me come up with retainer or project amounts. Base it on an hourly amount and estimate the hours/work required and offer a retainer amount.|
|United States||Usually small – 30-100 FTEs, established but in growth mode. we will work with any industry. Headquarters located in Texas (can be multi-state). And our clients typically do not have an HR department established–only one or two people doing HR in addition to their “regular” jobs.||Monthly Subscription/ Retainer||Charge $125 per hour. But, if client signs 6-month contract and pre-purchases hours each month, we knock it down to $100 per month. Any additional hours are charged at the $125 rate on the next month’s invoice.|
|United States.||Generally established with an HR Department but requiring additional hands-on expertise to complete a project or temporally fill a gap in available HR Resources. Can be either industry or public sector.||Hourly Rate||I do not offer HR Consulting Services as a business. I accept contracts for HR projects from organizations and my pay is negotiated based on the project requirements and an agreement of an offered rate that meets my (current) market-priced expectations based on the scope and type of project that I am to undertake.|
|Spain but my clients are mostly UK||Start-ups up to 100, social housing up to 300||Fixed Price Per Project||I look at the number of hours needed and build in some contingency and fix the price as I hate counting hours. I may offer a lower rate for charities or not-for-profit and more for clients in larger cities.|
|EU||Start-up business in Tech. Seed – Series B/C. Either building out an HR team or need experience to support existing team.||Hourly Rate / Day Rate||I offer fractional support where I am hands-on in a head of People role. For this ,I charge a day rate and sign a contract for minimum of 3 months. For a day rate I typically charge around €1218. This works out at around €152 per hour. With consulting jobs this is different. For hour rates I have experimented with different amounts (and offered packages) This has been from €150-220 p.h.|
|United Kingdom||Charities, usually more than 100 employees.||Hourly Rate / Fixed Price Per Project / Other||I typically charge a fixed project rate based on an hourly rate of £50 per hour excl. VAT. I work out how many hours of work it will be and then work in a margin for extra time. Travel is usually not included.|
|United States||My client base has ranged between startups and larger employers in the public and government sector.||Hourly Rate||I typically charge between $110 to $150 per hour for services provided. If I am presenting a training session I charge $2000 for a 90-minute session and for research and material development I charge $60 to $95 per hour. These figures do vary depending on the services provided.|
|United States||Currently, I do a lot more subcontracting than direct clients so it really varies. I don’t think I have a niche but I would say I seek out clients that care and have some level of likemindedness with me regarding culture, DEI, etc.||Hourly Rate / Day Rate||I typically price by the hour no less than $150 per hour and as high as $250 – for coaching and consulting. For facilitations, I charge based on time and group size which can vary.|
|United Kingdom||Startups||Day Rate / Fixed Price Per Project||I’m not the best at this. I saw a couple of quotes – these two companies charged £1K per day.|
|United States||Startup and local small businesses under 100 EEs, no HR department or Office Mgr tasked with HR responsibilities||Hourly Rate / Monthly Subscription/ Retainer / Fixed Price Per Project||I’m a consultant for small, local business owners so most of my business is in billable hours or by project. I haven’t secured any client on monthly retainer. Retainer fee starts at $1500/mo for up to 10 hrs then $125/hr after that.|
|United States||Small/medium size business/ non-profit organizations (between 15-100 employees). Any industry and may or may not have an HR presence.||Hourly Rate; Day Rate; Fixed Price Per Project||It depends on the project. Consulting rates are either $100/hr. Specific workshops facilitated are between $2500-$4000 depending on the size of the group.|
|Australia||Typically in real estate and travel industry. Between 5-30 staff onshore and offshore||Hourly Rate / Day Rate||Luckily for me, most of my clients are happy with ad-hoc face-to-face meetings. Usually, the second meeting is f2f and every other one is virtual. Hourly rates are $180AUD and day rates are $800 per day. I am fairly new to consulting and usually consult on processes and have not stepped into strategic HR yet. I priced based on my previous office job and added extra $ for my risks and overheads.|
|United States||Doesn’t have HR||Hourly Rate||Non-profit organizations pay reduced hourly rate ($60-70/hr)|
Small businesses pay $100/hr
Medium businesses pay $150/hr
It is based on headcount and projected growth
|United States||Small businesses||Hourly Rate / Day Rate / Fixed Price Per Project||Not that much|
|United States||Industry agnostic, but most clients are VC/PE backed tech/professional services with 25-1,000 employees||Monthly Subscription/ Retainer||Our fees average $100 Per Employee Per Month|
|United States||established | 50-1000 ee count | has HR Dept.||Fixed Price Per Project|
|United Kingdom||Most are midsize – around £1bn annual revenue (a few much larger, rare to have much smaller), usually multi-site (often multi-national), almost all B2B, range of sectors from government to education to biotech to finance to engineering to charities, mostly European based, all have HR depts||Fixed Price Per Project||Price per project typically £50k-450k (average day rate of consultants across project around £2k-£3.75k – lower end for public sector & charities, projects staffed by the usual small pyramid of deliverers, project manager, senior leader). Pricing level a factor of general market, industry norms, and the fact that we never market ourselves as HR service providers (though that’s what we are) but as operational improvement providers / human risk management advisors / strategic implementation etc…we sell to CEO/COO / regional heads and FDs, not directly to HR – think this helps maintain a value price point even as a small boutique – we’ve never lost work because of our fee rates…perhaps we’re pitching too low!|
|United States||Startups, Emerging Businesses ready to hire, typically no HR department||Hourly Rate / Monthly Subscription/ Retainer / Fixed Price Per Project||Project: $2500-$6000|
Retainer: Based upon # of employees and scope of work- $1000-$3500/mo
|United States||~ 25 employees, various industries||Monthly Subscription/ Retainer||Unfortunately, it’s based on a schedule and services needed, so I cannot provide just a single amount.|
|Mozambique||Established Industry||Hourly Rate / Fixed Price Per Project / Percentage (of Value/Savings/New Hire’s Salary/etc)||We calculate the real cost (time to be invested, market, etc.) and according to the sector/company we will define our desired profit margin|
|United Kingdom||Head count 5-20, Industry/location varies. Established, HR is added onto a member of team||Hourly Rate / Monthly Subscription/ Retainer / Fixed Price Per Project||We charge £200 + vat for our HR consultancy. We charge a fixed price for compliance.|
|United Kingdom||20-80 headcount SME||Monthly Subscription/ Retainer / Fixed Price Per Project||We cost our retainers based on headcount and then use that to determine roughly how many hours will be needed per month. We then multiply that x c£150 per hour|
|United States||5 to 500 employees||Hourly Rate / Monthly Subscription/ Retainer / Annual Subscription/ Retainer||We provide ala carte, project, and retained services. Thus, the range is $99 to $12K per month.|
|United States||We usually work with startups to medium-sized businesses that have gotten along fine but are looking to grow and need to build out the infrastructure to support scaling their business||Monthly Subscription/ Retainer||We typically price our services in hourly tiers on retainer, so they get so many hours within the first tier for X cost, and the second tier for Y cost, and the third tier for Z cost, etc. It allows us to flex up and down with their needs. Additionally, we have higher pricing for bigger businesses and lower pricing for smaller businesses. Our Level 1 tiers range between $1750-$3000 per month for up to 10 or 15 hours. Tier 2 based on company size ranges from $3,000 – $5500, Tier 3 ranges from $4500-8500, all the way up to our highest tier which is anywhere from $10,000-$19,500 based on business size.|
|United States||Under 50 employees, doesn’t have HR, usually CEO/CEO/CFO is currently handling. Long Island, NY. Mostly start-ups.||Monthly Subscription/ Retainer|
Stand Alone Services *Fees Vary*
Discounted Partner Software (ATS, Performance Management, Wellness, Recognition, etc.)
Handbook (price based on employee count and states required)
|HR Consulting Packages |
Thank you to all the people who kindly shared their pricing experiences here.
HR Service Pricing Advice From Other HR-Related Companies
We asked HR consultants from around the world to share some tips and advice on how to price HR consulting services . . .
(Remember to get in touch with us at Get More HR Clients if you need some help growing (or starting) your HR-related business).
- “Always be honest and don’t forget to be confident. No one will have confidence for you. There’s not always a one-size-fits-all, everyone’s business is unique.”
- “Reward loyalty – when I increase my rates I don’t increase my rates for long-standing clients to the full ad hoc level.”
- “Prove your value with hard numbers.”
- “Get comfortable with your worth and value. Don’t sell yourself short nor apologise.”
- “Stick to, and define, your boundaries early on. If you don’t, the client will quickly do this for you which then impacts your potential to have the most success. Better to underpromise and overdeliver. Early on when first starting out I did the opposite. This was more difficult for me to deliver the quality of work I wanted to as I was stretched too thin.”
- “If you’re an independent working on your own I recommend always pricing it based on your “worth”, that is based on if you worked in the open market what would you make. Secondly, also consider profit margin by that I mean money at risk that you can pour back into your business, new website, promotions – all this costs.”
- “Always calculate rates including extra time in case things take longer than you anticipated.”
- “Figure out how many hours a project will take and then double it! Projects always take longer than you think.”
- “Establish budget early on – you could provide top-notch service but their budget needs to be there. Never discount – slim down your offering.”
- “Ask around! Find out what your competitors charge and what the range of pitched and the range of successful (can be v different!) pricing is for particular kinds of projects. Sell to P&L holders / FD rather than HR. Sell fixed price not day rate – changes the perception around the value of service, plus saves on admin and false economies. Not exactly pricing, but really important I find it pays to be very specific about what you do and how it creates measurable value – and to sell outcomes and impact not process or technical input.”
- “Sometimes, the willingness of a client to pay a particular rate depends on whether it’s a cost to get something done or a value add which will generate more income for them than what you’re charging to create it. Consider factoring this into your charges. However, if you are likely to perform both types of projects for the same client, differential rates don’t really work and it’s worth considering a hybrid, single charge for any/all work.”
- “Charge more than you think they will sign off, they normally will still go with it if you have done a good enough job of convincing the decision-makers during the bid/pitch phase.”
- “Sometimes the smallest packages have higher profit margins but are easier for people to purchase- then once you get in there and show them all the ways you can help, they often expand the scope and value their investment.”
- “Under-promise, over-deliver. Sounds silly but most don’t do it.”
- “Be clear about contract terms. If adding services, the contract should be renegotiated.”
- “I prefer project pricing but have been burned too many times by clients who weren’t able to provide what we needed as the project moved on. I then had to renegotiate the deal and that was very awkward. So unless the service is something I have complete control over, I use hourly billing.”
- “Cost transparency. No hidden fees and any third-party discounts are passed through to the client.”
- “I advise being upfront and transparent about pricing. It’s a business relationship and it’s important to be willing to have a fee-related conversation. This will help protect against ‘out of scope’ work since it will allow you to have a conversation as the request comes to you.”
- “I would say just to really evaluate how many hours are really involved, including follow-up calls, emails, and how you will charge for those.”
- “Cover your costs.”
- “Always add more than expected in each of your client engagements.”
- “Under-promise, Overdeliver.”
- “We complete a very detailed discovery process | Identify what is working and not working | are highly responsive on service”
- “We don’t lock our clients into a long-term contract that they can’t get out of. We also don’t charge a minimum.”
- “I think it’s important to sometimes be flexible if working with a non-profit organization (less budget but still might have a great need).”
- “Hourly rates are cumbersome. We usually drive home that with a retainer/monthly rate, they can more easily budget and keep up with HR expenses.”
- “Even if it’s a set price, list the hourly rates for work outside the scope. Put an expiration date on proposals. Include an expiration date on the contract with the option to renew; this allows you to change hourly rates.”
- “At this time I do not other than treat each client as an important client that leads to referrals for continued business and recommendations to others.”
- “Don’t undervalue yourself (easy to do in the early days), don’t give discounts, and be clear in your proposal as to your pricing structure so to avoid any confusion later on.”
- “Value and transformation sell. Be willing to pass up for premium customers. Bring passion, compassion, and consistency.”
- “A customer should feel: ‘We consider ABC company a true HR partner. They offer so much beyond optimizing our payroll and compliance needs.'”
Thank you to all the people who kindly shared their HR service pricing advice here.
Conclusion – Pricing For HR Companies
In conclusion, pricing HR consulting services effectively requires a strategic approach that balances profitability with value for clients.
Successful consulting firms understand the importance of considering various factors such as service offerings, client profiles, market demand, and competition while establishing their pricing strategy. This allows them to provide customized solutions that meet clients’ specific needs and budgets.
Moreover, leveraging industry data and keeping up-to-date on trends and changes within the market can also be helpful in determining competitive rates. Analyzing key metrics including average billing rates, hourly fees or retained earnings percentages of other providers in the same segment or niche area is paramount to maximizing profit margins without compromising quality.
In summary, setting the ‘right’ prices for HR consulting services starts by understanding your unique value proposition and aligning it with your target clients’ expectations at a price they are willing to pay.
As always, get in touch with us at Get More HR clients for marketing advice for your HR-related business.
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