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For HR consultants, business competition can come from a variety of places, such as other independent HR consultants, the internal staff at client organizations and large consulting firms. By understanding what the competition has to offer in specific markets, HR consultants can position their consultancy to target potential clients who have a need for the particular services offered by the firm.
There are two types of competitors: direct and indirect. Direct competitors are other consultants, or consulting firms, offering the same or very similar services. Indirect competitors represent any other available alternatives to what the HR consultant is selling. For example, an indirect competitor for a consultant specializing in conflict management might be a book on conflict management issues, an alternative source of the information.
By being aware of the services available to clients by direct and indirect competitors, HR consultants can determine whether their firm’s services should be positioned differently to increase potential value for clients, says Bob Kustka, president of the consultancy CHR Partners, in Boston. One way to decide whether to reposition a consultancy is to conduct a competitive analysis, which will consider not only direct and indirect competitors but also internal considerations related to the consulting practice, he says. To conduct such an analysis, Kustka uses a tool called a “position map.” The data the position map gathers help determine where to best position the firm within the marketplace relative to competitors. While the questions the position map answers may seem basic, the process of formally considering and documenting responses to the questions is the key, he says. The map collects data on:
• Target audience.
• Competitive environment.
• Consumer insight.
• Discriminator of services being provided.
• Essence of the brand.
• values and personality of the brand.
• Reasons to believe.
The area of the position map listed as “the discriminator” is the single most compelling and competitive reason for a client to choose a particular consultancy, Kustka says. The broader a consultant’s discriminators area, the more reasons a client has for selecting that consultant, he says. Kustka adds that he has several discriminators. “My background is very broad, so that’s one of my discriminators,” he says. “I consider myself a businessperson first and an HR person second; that’s another discriminator. I’ve worked across so many environments that I have what I call business adaptability, another discriminator.”
While the position map may help a consultant decide what market their consultancy should be positioned to pursue relative to the competition, there are a number of other key pieces of information that HR consultants should gather about direct competitors, including:
• Target audiences. The data collected are focused on the types of businesses (size and industry) and the geographic areas being targeted.
• Products and services offered. The data collected are focused on the specific products and services being offered.
• Price points. The data collected can determine the actual price and pricing strategies, which might include discounts and contracts.
• Differentiating factors. The data collected can determine the unique value—or specialty—service(s) areas other consultants have to offer.
• Positioning strategy. The data collected can help determine the way a consultancy describes its services to differentiate it from competitors.
However, not all consultants subscribe to the strategy of focusing on the competition. Curtis Bingham, president of The Predictive Consulting Group Inc. in Littleton, Mass., a firm that helps organizations develop and capitalize on in-depth customer insight, says if consultants deliver value to a client, it does not matter what competitors are doing. “Watching the competition is a fruitless exercise, and the inordinate amount of time that people spend doing so would be significantly better invested in spending time understanding how to deliver more value to customers,” he says.
Nonetheless, there are consultants who say monitoring the competition in moderation is necessary. A balance between overall lack of awareness of competitive forces and being too invested in keeping tabs on the competition is wise, says Winton Churchill, a sales and marketing consultant whose specialty is lead generation. Consultants do not want to get caught “flat-footed” if a competitor begins offering a new service or criticizes what other consultants are doing, he says. Monitoring both the industry and the marketplace can be done by staying current on blog postings, news stories related to relevant areas of expertise, and proposed legislation or court cases that might change the HR landscape, he says. It is also recommended that consultants take advantage of technology tools like Google Alert (www.googlealert.com) that scour the web for topics specified by users and provide results through e-mail, he adds.
Abhay Padgaonkar, president of Innovation Solutions Consulting LLC, a management consulting firm, says it’s important for HR consultants to keep an eye on the competition. “If you are not watching and learning from what the competition is doing, you are merely operating in a vacuum,” he says. Padgaonkar has seen, for example, how monitoring the competition helped with a nationwide recruiting project. By knowing what the competition was doing, a decision was made on how to position the client’s job offering so it was unique, he explains. Observing and understanding what the competition is offering in terms of compensation, benefits, bonuses, systems and processes makes it easier to develop services clients will find valuable, he says.
Competitive information can stem from many sources, including web sites, job postings, phone calls, current employees, former employees, candidates, the grapevine, news stories and the like, Padgaonkar says, but reviewing that information must be more than a passive endeavor. “The data must be transformed into cohesive intelligence,” he notes.
Reviewing competitive activities can also point to opportunities for collaboration, says Shel Horowitz, a marketing consultant and author of several books, including Principled Profit: Marketing That Puts People First (Accurate Writing & More, 2003). “Rather than watching the competition and trying to stay ahead, I suggest finding ways to partner,” he says.
However, while HR consulting tends to be a more collaborative than competitive environment, “the best collaborators have good situational awareness about what is going on in the marketplace,” Churchill says.
Lin Grensing-Pophal, SPHR, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues. She is the author of Human Resource Essentials: Your Guide to Starting and Running the HR Function (SHRM, 2002).
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