Become an HR freelancer: everything you need to know before you start

Starting out as an independent HR consultant? Or aim for a more stable position with a permanent contract?

These are the questions that have been nagging us for a long time at La Ressource Humaine, before we finally took the plunge and became HR freelancers at the dawn of the year 2021.

In almost 2 years, we went through all the emotions: doubt, excitement, joy, pride, fear…

So we thought it would be a good idea to share our experience with you to help you make your decision: what are the advantages of HR freelancing? The points to watch out for? What are the prerequisites and steps to take?

This article aims to answer your questions about starting a HRM or HRD activity on a timeshare basis. We hope to be as exhaustive as possible, and if this is not the case, do not hesitate to ask us your questions via the online chat!

Is there a need for an independent HR consultant?

This is naturally the first question to ask yourself before embarking on an entrepreneurial project. Without going into the details of a market study, our experience leads us to answer in the affirmative. But not with just any target audience! At La Ressource Humaine, we have identified a significant need for HR support in companies with less than 50 employees.

HR Freelancing: focus on the needs of VSEs, SMEs and start-ups

Small and medium-sized enterprises represented nearly 99.8% of the French economic fabric in 2018, i.e. 3.5 million structures (source: Centre de Documentation Economie Finances – Où trouver les chiffres clés des PME?).

As you can see, the playing field for offering your services is potentially (very) wide. Let’s focus on the elements that are favorable to the creation of an HR support offer for these companies.

An overall favorable environment for HRM

The COVID crisis was terrible in many ways. However, it has had the merit of putting human resources management back at the center of the concerns of company managers, and many of us have asked ourselves existential questions during this period. The motivations of employees have clearly evolved: the place left to the balance between professional and personal life has notably become a predominant issue of fulfillment in the professional environment.

In addition, the economic recovery fueled by government subsidies has created a tense labor market. The balance of power has shifted: companies are struggling to recruit, and offering attractive compensation is no longer enough! Building a global and coherent HR policy has become essential to meet the need in human resources.

HRM in small companies

The current economic situation is therefore generally favorable for the HR function. An HR support offer can make sense for small and medium-sized companies in particular.

It is particularly with small and medium-sized companies that the HR services of an independent consultant can make sense.

In many companies with less than 50 employees, company managers manage human resources themselves.

This can be problematic in two ways:

• Managers, who have to manage a multitude of issues, lack the time to build and carry out a consistent HR strategy. HRM is often de-prioritized in favor of the company’s growth objectives
• HR management is a profession! In the vast majority of cases, managers lack expertise in this area. Despite all the good will in the world, the manager exposes himself and his company to financial and criminal risks linked to non-compliant practices.

The contribution of an external HR consultant

The alternative to internal recruitment

HR needs exist in all companies, and this as soon as the first employee is hired. So why not recruit an internal HR manager?

In our view, there are two elements to the answer:

• HR needs do exist in small organizations, but often not enough to justify hiring a full-time employee to manage human resources.
• Small companies do not have the financial strength of large groups. Therefore, each internal recruitment must be carefully considered because of the cost it represents for the company. As an example, an employee who earns 2000€ net per month (after tax) “costs” the company 3853€. As an HR freelancer, an invoice of 2000€ will actually cost the company 2000€.

The salary of an internal HR resource can be amortized if the company’s needs in this area can justify it. This is often not the case for VSEs, SMEs and start-ups with less than 50 employees!

The contributions of the HR freelance for the manager

As we have seen, the ratio of need to cost for the company is better with HR freelancers for small structures. But what is the concrete contribution of an independent HR consultant for the company?

• Flexibility: this is the great strength of the timeshare model. The company can adjust the level of support according to the evolution of its needs and modulate its expenses accordingly.
• Serenity and security: legal and conventional constraints are often vast and complex to understand. They require specific HR skills that the manager often does not have. In this context, the risks of non-compliance are numerous. Mobilizing an HR expert will allow the company to protect itself from the regulatory risks to which it is exposed, and the manager to be relieved of time-consuming HR tasks.
• Structuring: the outsourced HR expert will help the company structure its HR function as it grows. Processes for managing and developing skills, recruiting and onboarding employees, employer branding… By structuring its HR function, the company is prepared to absorb the next stages of its growth.

Becoming an HR freelancer: what it involves

Together we validated the freelance HR consultant model, and the target: small businesses. But not everything about freelancing is rosy! Let’s take a look at what’s involved in going into entrepreneurship.

A new way of working

• Independence: no longer having to answer to a superior, being able to work with managers who understand the challenges of the HR function, doing things the way you feel… independence can clearly be good! Make sure that this lifestyle corresponds to your temperament: being independent can also mean feeling alone, being helpless when faced with decisions to be made…
• Work/life balance: being able to manage your time as you wish, having the choice to listen to yourself… more and more of us are feeling these needs. Starting up as a freelancer will allow you to manage your time as you wish. But be careful, entrepreneurship does not mean working less! Especially at the beginning, your workload could even increase! But once your business is on the right track, you will be able to make choices: work less and enjoy your personal life, or work hard to earn more! Freedom lies in the ability to choose!
• Uncapped income: if salaried employment is reassuring, it offers few prospects of evolution from a remuneration point of view. No limit with entrepreneurship 😎!

Lack of financial security

And yes, the salary that falls at the end of the month is over! The first few months as an HR freelancer are usually stressful from a financial standpoint.

The first money doesn’t come in the first few days: you have to find your first customers, and that requires setting up communication actions to make your offer known. This can take time: at La Ressource Humaine, we sent our first invoice after 3 months of activity!

Our main advice on this subject is to secure your back!

• If you were an employee before starting your own business: choose a method of departure that gives you access to Pôle Emploi benefits, such as a conventional rupture. The Pôle Emploi indemnities will allow you to envisage your launch of activity in all serenity!
• If you were not an employee: we can only recommend that you have reserves before you start, in order to support the first months of low activity. Plan for at least 6 months of the target monthly turnover.

Choose a legal status

“But actually, I need to start a company for my business! I don’t know how to do it.”

We confirm it, you will have to create a company to exercise your activity! Otherwise you risk to be rejected for concealed work (👀 hello URSSAF and Taxes).

And on the choice of the legal status to be privileged, we are quite categorical on a launch of HR freelance activity: the micro-enterprise is the best choice.

For several reasons:

• the simplicity of the creation process! Everything is done online and the steps are clearly indicated on the URSSAF website dedicated to auto-entrepreneurs
• ultra-light accounting, especially for service activities
• a reduction of your social charges during the 1st year of exercise

In short, the micro-entrepreneur status offers so many advantages in the context of launching an HR freelance activity that we will not discuss the other legal statuses.

Be careful, this statement concerns the launch of your activity. Once you have validated the fact that your new freelance HR job is a relevant choice, you will have to ask yourself again the question of the status to make the best choice according to your situation and your objectives.

Also to be noted concerning the status of micro-entrepreneur:

• your turnover will be capped at 70000€ (which would be pretty good for a first year 🙌)
• you will need to open a separate bank account from your personal account
• you cannot deduct your expenses from your turnover

Becoming an HR freelancer: profile and skills required

A first experience to establish your legitimacy

We believe that it is essential to have had a first experience as an HR manager, HR director or HR officer before starting your own business. To launch into entrepreneurship is often to be confronted with the impostor syndrome, especially at the start of the activity.

No doubt that a first significant experience will allow you to limit this harmful thinking mechanism.

Moreover, a first experience will help you establish your legitimacy with your prospects, and help them identify your expertise. A business facilitator, therefore!

The business skills sought in an HR freelancer

We are going to speak here about what we know: the HR needs within the VSE’s / SME’s. By many aspects, the role of the independent HR consultant who intervenes in this type of structure is that of a HR manager. He must therefore have a generalist’s hat and be able to intervene on the great majority of the fields of human resources.

If we were to keep only one technical HR skill, it would be mastering the regulatory aspects of the function. Indeed, small companies often have irregularities in their HR practices. The number one challenge of the support you can offer is to secure the company and its manager through the compliance of HR practices. An appetence for HR development is also a big plus. In this context of talent shortage, structuring an HR policy and processes becomes a major challenge!

The HR freelancer must be able to manage the operational aspects of HR, as well as make a strategic contribution to the company.

When it comes to soft skills, three main skills come to mind:

• discretion / confidentiality: the HR function, by its very nature, involves contact with sensitive information. This duty of discretion is all the more important in the context of a shared HR consultant, working with several organizations.
• Ability to adapt: each client has its own sector of activity, its own corporate culture, its own collective bargaining agreement, its own agreements… being able to juggle between sometimes diametrically opposed corporate contexts seems to us to be a key skill in the exercise of the profession of independent HR consultant
• Ability to monitor and learn continuously: as a freelance HR, you will have to deal with a wide variety of issues, which may sometimes be far from your core expertise. You must therefore have the desire and ability to learn new things every day!

Have cross-disciplinary skills

You are an expert in human resource management! Very good, it’s still better to start an HR consulting business 😃 !

But when one is an entrepreneur, various skills are mobilized: management, business development, communication…

In our opinion, this is one of the main obstacles for people who hesitate to start freelancing. Phrases like “How am I going to find clients?”, “How do I go about creating a website?” or “I don’t even know how to make a quote” can quickly come to ruin your plans for independence.We can tell you about it, we’ve been there 🙄!

“You have to start somewhere! “. That’s what we ended up concluding.Any skill can be learned. When you start your business:

• Learn as much as you can: there is a multitude of resources on the internet today, many of which are free. Take time to fill in your gaps and learn “on the job”.
• Ask for help: you will surely know people around you who can advise you: your brother-in-law in business, your college friend who started her own business a few months before you… Never hesitate to call on others, they will help you willingly in most cases! You can also call on the services of a professional (for a fee) to accompany you.

To conclude

With this article, we have tried to share with you as much information as possible based on our experience as HR freelancers. We have never regretted our decision to launch ourselves, the intellectual stimulation generated by contact with very different companies, and the independence that this activity gives us take precedence over the periods of doubt that we have gone through.

To undertake, it is often to be alone. But it doesn’t have to be that way! Surround yourself as much as possible, exchange with peers, rub shoulders with entrepreneurs… we wish you all the success in the world!