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Is Independent HR Consulting Right for You?

Is Independent HR Consulting Right for You?

Independent consultants have played a significant role in the American workforce for years, especially in the technology industry where freelancers have flourished. But independent consulting isn't just for IT professionals anymore.

Fed up with corporate environments and looking for a change, more and more HR professionals are catching the consulting wave. Being your own boss, setting your own rules -- it all sounds great. But going it alone isn't the right career choice for everyone; there are downsides. Before making the switch to consulting, take note of the following considerations:

Evaluate Your Fit

Start by evaluating your fit as a consultant. Do you enjoy working alone? Are you self-motivated and disciplined? Or, do you need a boss to set objectives and deadlines for you?

One of the most commonly overlooked elements of consulting is selling. Do you have sales skills? As an HR consultant, you'll need them. After all, it's techniques like cold calling and networking that will earn you clients. Being an HR expert isn't enough. Many consultants have learned this lesson the hard way. But don't rule out consulting just because you aren't particularly adept at self-promotion.

Look for an HR consulting firm that handles the sales and marketing for its consultants. You'll lose much of the independence consulting has to offer, but this may be the ideal consulting gig for the sales-shy HR professional.

Choose Your Niche

There are plenty of generalists out there. Resist the temptation to join the crowd. Find a niche area of HR and focus on that. Choose one or two areas of specialization that you know well -- and enjoy. In many ways, this is the tough part. It's tempting to be a Jack of All Trades consultant, but most consultants find that specializing in one or two areas is optimal. Not only does it keep you focused and help you to remain organized, you're not out re-inventing the wheel each time you take on a new project. And, by calling yourself an expert in one or two specialties, you'll add value to your reputation. After all, everyone can consult a little bit on a lot of things, but not many people can call themselves expert consultants with an HR specialization.

You'll need to conduct some research to determine whether or not there is a market for the niche you've chosen. Ideally, the area in which you specialize should be one that poses a common problem for employers -- and one that isn't already saturated with expert consultants.

Create a Business Plan

Even independence requires marketing and business planning. Creating a company name and corporate identity are good first steps. Determine whether or not you'll need office space, or if you'll work from home. Consult an accountant and attorney to determine whether or not incorporation is necessary. Most importantly, create a formal business plan.

Your plan will help you identify obstacles and objectives. You'll need to think through the sales and marketing side of business growth. Raymond Wyzguski, who worked in labor regulations enforcement and administration for the US Department of Labor and the US Office of Personnel Management for more than 30 years before venturing into the world of consulting, says that ''one of the biggest challenges is to continually market your business, even when you're extremely busy.

Virtually every consultant would agree. If you are able to keep the marketing cycle running continuously, your odds of success will increase dramatically. A common problem consultants have is that they become so busy with current projects, they forget to look for new business. When those projects end, there is no business in the pipeline.

Manage Your Expectations

It's important to go into a consulting venture with realistic expectations. It's easy to call yourself a consultant, but not so easy to say you're a successful consultant. Financial expectations should be reasonable. Lack of a regular income makes breaking into consulting very challenging. Do you have the means to support yourself while you build your consulting empire? Wyzguski notes that ''a nest egg is good, but it's important to operate your business without using that as a crutch. You can't let yourself think you've got lots of time to build your business." Plan for at least six months of ramp-up time for your consulting business, and perhaps another six before you can draw a steady income.

Can you ease into consulting while you're still employed full-time? It's possible to create your business plan, map your marketing strategy, develop a corporate identity and attend HR networking associations on evenings and weekends. But Wyzguski makes a good point: "If there is a way you can do a trial run on a part-time basis while employed, you'll be in a better position to decide whether or not to go it alone. However, the security of a regular paycheck doesn't give you the experience of 'It's Monday morning and it's just me, a computer, a telephone and no money until I make it happen.'"

Know the Upsides -- and the Downsides

HR professionals hear it from their employees all the time -- the grass is always greener on the other side of the fence. Independent consulting can be wonderful. Wyzguski lists a few of the advantages he has found: freedom from organization constraints, control of my time, responsibility for my own work product.

But what goes up must come down, and life as an independent has disadvantages. Many are surprised by the impact of working alone. The lack of regular contact with colleagues and friends takes a toll on some people. As a consultant, you need to be extremely comfortable working alone. The lack of a regular income stream, potential loss of healthcare benefits and lack of administrative support -- that's right, you have to handle everything yourself -- are common consulting downsides.

Speaking as an independent consultant myself, making the move to independent consulting was the single best career decision of my life. But it didn't happen smoothly and there have been many times when I've felt the sting of self-employment. If you're considering a switch to independent consulting, talk to other HR consultants to hear their experiences and get their advice. Make sure you're turning to independent consulting for the right reasons -- and with your eyes wide open. The more thinking, planning and listening you do, the better your odds of making it in the freelance economy.

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