Would “free” Human Capital Consulting be abused?


There is a restaurant in London that does not put any prices on its menu ~ they simply ask patrons to pay what they think the experience and food was worth , if they think it was terrible, they can simply walk out without paying! The owners are so confident that their “product” is of such high quality that they are prepared to put their convictions to the test. The outcome….most patrons end up paying more than the price the owners would have put on the menu.

How confident are Human Capital consulting companies or internal HR consultants of the services they offer, and would they be prepared to only get paid for their services or receive their salary according to how  their clients or internal customers felt they had received value adding and high quality services?

Its an interesting question because I think many Human Capital service providers and internal consultants think they are adding value, but I’m not sure they would be prepared to put it to the ultimate test of letting the recipients of the service decide that. Is it because they lack confidence in their offerings or believe that non-HR folk don’t understand the real value of the service, offering or tool? Perhaps there is low levels of trust in HR to really make a difference beyond process efficiency ?

Back to the restaurant.. the chef may technically cook a meal to perfection, but that does not mean the patrons will like the food ~ a good chef is not only technically good, but understands what customers want. He blends technical perfection with client needs, in other words he accepts that the client might not recognise the value in being technically perfect, but adjusts to suite the need. In short he is in tune with the client.

To much HC work and consulting is done “out of tune” with the business requirements and if HR was the London restaurant, it would go out of business and the “HR Chefs” would not understand why.

Is anyone ready to take up the challenge of a “pay-for-value-perceived” HR consultancy or service provider?

4 comments

  1. Hi Rob,

    In my field (payroll systems consulting), I am aware that the problem is often not whether the organisation values their consultants and the services that they provide, but whether there is budget to pay for those services.

    Several of my previous clients would never have let me (or many of the other consultants working for them) go if there was no impact on their bottom line or budget. However, as you well know, budgets often mean that they have to choose their scope and pick their priorities so that the client get the biggest bang for their bucks, and get the important things done.

    I don’t think it’s about ‘abusing’ the service, just that there’s often not enough money to allow clients to do all of the things that they want to do. I suspect that if someone was to offer the service on a ‘pay what you think it’s worth’, then the client would probably get to do more of the things that they want to do, but that wouldn’t necessarily translate into dollars for the consultant, no matter how much value the client thinks the consultant is adding.

    In one sense, that’s a real shame – imagine all of the innovative HR and payroll stuff that we could build if budgets didn’t get in the way.

    1. Thanks for the comments Brett – I tend to think if you have a good client relationship and the client has funds, they wont abuse you, but if there is some bad vibes or they don’t really value long term relationships, they likely to pay loss than what they really feel .

      Regards
      Rob

  2. Hi Rob,

    I guess that depends on your definition of “abuse”. If you mean “pay below market rate” then I don’t think that we can agree here. My experience in consulting is that the client always wants more than what their budget will allow. So something would need to give: Scope or the price paid. And that doesn’t even begin to cover concepts like scope/timeline blowouts.

    Of course, this argument is grounded by most projects being fixed-price for exactly for this reason: there is an allocated budget to get an amount of work done. As we all know, budgets can sometimes be increased through normal project management processes, but it provides significant insight that most projects aren’t ‘non-fixed price’ from the start. It probably also answers your question – that they might offer you an amount of money based on the budget irrespective of the amount of work that actually occurs, and almost no matter what your rapport with the client is.

    And of course, I don’t need to remind you that “payment that doesn’t take into account the amount of work required” isn’t exactly the pinnacle of modern remuneration policy!

    I agree that if you have a good rapport with a client then they’ll be less inclined to take advantage of you if they were paying you what they think you’re worth, however I suspect that if push came to shove and the options were letting the consultant go early with an unfinished project, or paying the consultant the same overall for more work (in effect, a lower hourly or daily rate), then the second option will be chosen more often than not.

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