I’m contacted regularly by a couple of “HR” guys I’ve come to know.
They invariably have a question to ask.
And a lot of the time, more than one.
They say that they just want to “pick your brains”. This is said to flatter me. And persuade me to overlook the fact that what they are really looking for is free advice.
The scary thing is that both of these guys have a lot of clients in the SME/small business sector. And some of their questions betray an appalling lack of knowledge in areas that they are supposed to be “expert” in.
They can probably acquire new clients in the SME sector because they are good salespersons. But when the crap hits the fan in their clients’ business in relation to employment law, they are on the phone to guys like me.
Because while they have a decent broad general knowledge of employment law, they don’t have the necessary expertise when the going gets really serious.
And when the employer is facing a potentially very expensive claim.
Or claims.
They operate like many others in this space-on a small monthly fee basis. That way, the employer/client doesn’t really feel the cost. But it adds up over a year. And really adds up over a number of years.
Recurring Income Model
Any recurring income model like this is a great way to derive an income for two main reasons:
- The apparently small cost. When you divide up a yearly fee into easily digested small chunks like a monthly payment (or even a daily payment) it looks very affordable and
- Inertia. Once the HR/employment law provider has the employer signed up the employer comes to accept the monthly deduction, which is small, and is unlikely to cancel it.
So it’s a great business model.
Unfortunately for the employer, lads like me end up picking up the pieces either in advising when a difficulty arises or in providing representation when a claim ends up at the Employment Appeals Tribunal, the Labour Court, or the Civil Courts.
SMEs, small business owners, and employers generally should ask some searching questions at the outset-questions about their qualifications in relation to employment law, if any; about what happens if the employer is given incorrect and costly advice; about insurance for professional negligence and whether the HR expert has any.
The relatively small monthly payment should not mask the potential cost for the employer is (s)he is on the wrong end of a successful employment related claim.
Awards in unfair dismissal or equality related cases can be very high. And when you throw in the cost of getting professional legal advice and representation for these cases it is quickly obvious that not asking some basic questions when obtaining the services of a HR/employment law service, like those outlined above, can be a big mistake.