Budgeting for HRMS consultants

Cost is always a consideration when you think about adding a consultant to a project. Can you afford to add a consultant to improve your chances of success? How will a consultant’s cost impact the bottom line or will it make your project cost prohibitive? Here are some key areas to review as you look at projects, staffing and consultants.

1. Use realistic baseline values in your estimates

A consultant can command market rates based on supply and demand. If you are government affiliated, consultant rates are consistently defined by various government entities and transparent. Publicly traded companies can expect to pay two to three times the hourly rate of an internal resource. There is often room to negotiate if you can present favorable conditions like getting experience on a new HCM or offering flexible work options like telecommuting.

A major mistake where companies overrun in their project budgets is when they fail to allocate sufficient hours to a project task or they underestimate a consultant’s hourly rate. If you cannot get accurate past numbers add a 10 percent buffer for project overage.

Find out how much HRMS software costs with our Pricing Guide

2. Consider your options

Many companies have discovered new ways of engaging consulting talent which can allow you to maximize your budget and find the right person for the job. You might find the best HRMS consultant is local to your company and can come on site each day. The use of remote freelancers who are paid a fixed fee for a set deliverable like designing a training manual or delivering a week of training is growing. The use of offshore and nearshore has expanded as the model has matured and companies have call centers and payroll processing hubs in low labor cost countries. We are seeing a move to more remote work especially as HCM vendors move their solutions to the cloud.

3. Focus on how you are spending your consulting dollars to get the best return on investment

Often companies budget a set amount for HRMS consultants and then lose out on later phases like testing, training, and documentation due to overspend in earlier phases. It can be helpful to analyze where your HRMS consultant budget is allocated and to prioritize where you would benefit the most from a consultant’s skills. Some companies restrict their HRMS consultant to specific phases and deliverables to best suit their project needs. Due to economic constraints, companies are being more selective in where consultants are used and what value they are expected to bring to a project.


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Heather Batyski

About the author…

Heather is an experienced HRMS analyst, consultant and manager. Having worked for companies such as Deloitte, Franklin Templeton and Oracle, Heather has first-hand experience of many HRMS solutions including Peoplesoft and Workday.

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Heather Batyski

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