Starting an HR Consultancy After a Layoff

By Lin Grensing-Pophal, SPHR Jan 22, 2009

With layoffs on the rise, more HR professionals are deciding to strike out on their own— either because of a long-time dream or out of sheer financial necessity. While common wisdom would suggest that the best approach to starting a consulting firm would be after careful consideration and planning, those who find themselves suddenly facing the opportunity of being on their own can succeed, say those who have done it.

Patricia Pippert was laid off from AIG six years ago and used that layoff as an opportunity to start her training and development consulting practice, P2 Enterprises in Chicago, Initially, the biggest challenge she faced was overcoming the blow to her ego, she says. “There can be a great deal of embarrassment, but you really have to put that aside,” she says. HR professionals finding themselves in this situation now need to find a way to deal with their anger and ego issues privately and move forward, she advises. She adds that in her experience she found that most people were not only understanding but also supportive.

It is important for HR professionals to step back and look beyond their emotions to really determine whether running a consultancy is right for them, says Pippert. Others agree.

Joni Daniels of Daniels & Associates in Baltimore,, is an organizational development consultant. After being laid off several years ago she automatically began looking for another job but eventually realized, after feedback from a potential employer, that being independent was right for her. That was 20 years ago and she has not looked back.

Daniels stresses that HR professionals suddenly out of a job and considering what to do need to seriously consider their skill sets and the requirements of succeeding in a consulting career. It is not for everyone. She differentiates between freelancing and consulting. Freelancing is picking up projects here and there. In contrast, consulting is a business that requires focus and commitment. “A consulting practice should be grounded in a business plan or marketing plan and the understanding that half of your time you’re going to be doing the job and half of the time you’re going to be running the business that enables you to do the job,” she says.

Focus and Commitment

Debbie Payne is a leadership development and organizational learning specialist in Delta, British Columbia. Laid off in June 2007, Payne started her own consultancy and says she has been very successful in a fairly short time. She recalls that her self-discovery process involved a lot of job searches and interviews and, ultimately, the realization that what she really wanted to be was an independent consultant.

“I assumed I would just go back and find another job so that was my approach at the beginning,” she says. But as she went to job interviews she found that she was having a difficult time actually imagining herself working full-time for those organizations. “I could see myself being effective and having influence, but I didn’t want to be there full-time and be embedded in an organization again,” she says. Eventually her path became clear and she is enjoying the life of an independent consultant.

HR consulting is not for the faint of heart says Payne. Those who choose to move in this direction will find success only through firm commitment, she says.

Beyond an initial commitment to making consulting work, clarifying the services that will be provided is critical.

Harriett Cohen is principal of Training Solutions in Agoura, Calif., She started the business about 14 years ago, went back to the corporate world and let the business become relatively dormant and then, after a layoff, revived the business again. She says she is glad she did.

Consultants need to consider their skill sets carefully and determine where they can provide value, says Cohen. “You have to have credibility,” she notes. “As I tell my clients, this isn’t the buckshot method—you don’t just throw everything up against the wall and see what happens. You have to be focused and clear about whom you’re going to market to and what you have to offer,” she says. The next step is conveying clearly what they have to offer to their identified target market, says Cohen.

“I can’t emphasize enough about getting really specific, practical and down-to-earth in everyday language about what you offer,” says Pippert. “Take away all the HR jargon and think in terms of your clientele and what they might be looking for—speak their language,” she advises. “Make it as black and white and as tangible as you possibly can.”

Joining Groups and Networking

One thing that many new consultants fail to realize is the amount of time and effort that will need to be focused on building business. Networking and making contacts is critical at any stage of a consulting career, but especially during the initial weeks and months. “Looking for consulting assignments is like looking for a full-time job,” says Pippert. “You have to get up in the morning and sit at your phone or computer and go mining for information,” she says.

“If you’re not out there getting stuff in the pipeline, you’re not going to have work in three months,” agrees Daniels. Even when working a project, and even when busy, consultants need to be continually hitting the street to build business, she says. “No single client should represent more than 30 percent of your total business,” she adds.

Online networking sites can be valuable tools as well, if used strategically. Pippert recommends LinkedIn. “Make sure that your profile is as professional-looking as your resume,” she advises. “If you’re on Facebook, get off,” she adds. She prefers LinkedIn for its more professional approach which is important to establishing credibility, she says.

Networking can also involve reaching out to take advantage of available resources in the community. Pippert said she took advantage of services offered through SCORE (Counselors to America’s Small Business) when she struck out on her own. “It was like going to my father and getting some really good advice,” she says. In addition to SCORE, the Small Business Administration (SBA) has offices in many cities and also offers free services that new HR consultants should take advantage of, she says.

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