Strategic HR Consulting Business Models in India: Innovations and Challenges

India is a burgeoning market for consulting services, with a diverse range of business models that cater to different needs. The traditional consulting model, which relies heavily on hiring top talent and charging clients by the hour, has been prevalent.

The Traditional and Evolutionary Models

The traditional consulting business model is based on two primary ideas:

Hiring top talent when possible Charging clients a fee per hour or day for access to expertise and/or manpower

Depending on the type of consulting or the brand, there may be a greater emphasis on sophisticated expertise or simpler manpower. While the bulk of the consulting industry follows these basic principles, new business models have emerged in recent years, such as freelance consulting, which allows individuals to offer value to clients in ways that create superior value for themselves and their ecosystem.

Innovative Business Models

From Hiring a Team to Offering Access to Top Talent

In the traditional model, existing assets, namely consultants, are utilized to their fullest. There's a strong incentive to sell as many consultants and days as possible. This often leads to well-staffed teams and a preference for more consultants to be on board. However, in the freelance model, flexibility is key, offering clients the option to choose the talent they want.

From Staffing Projects to Commercializing Expertise

Examples of innovative models include PSFK, a trend research consultancy in New York, which doesn't focus on selling expertise through human resources but instead provides reports, research services, and strategic advice. This approach allows clients to benefit from detailed, comprehensive insights on trends and innovations without having to hire individual consultants.

From Consulting to Solutions

Mckinsey's business model has evolved to offer software and technology-based tools that provide data analytics and data-driven decision-making. Their Solutions business model provides structured, repeatable, and standardized processes that are independent of individual consultants. Clients pay for outcomes, which are delivered in a shorter timeframe, reducing the risk for clients significantly.

From Fixed Fees to Success-Based Fees

Fahrenheit 212, an innovation consultancy based in New York, has moved away from fixed fees to a success-based model. They charge clients based on objectives achieved, with 2/3 of the fee dependent on the achievement of pre-defined goals throughout the innovation process. This model reduces the risk for clients as they only pay if the output of their work is successful.

Strategic Human Resource Management in India

Corporate Strategy: Formulated at the top management level, influenced by both internal and external environmental forces. Internal Environment: Internal forces play a crucial role in corporate and business strategy formulation. External Environment: External forces, such as competition and government regulations, also affect corporate and business strategies. Business Strategy: Formulated for each business unit in alignment with overall objectives. Human Resource Strategy: Formulated to incorporate HR planning and job design approaches to align with corporate strategy. Employee Separation: Key to ensuring a smooth transition when employees leave the organization without disruption. Laws Regulating Employees: SHRM activities are affected by government regulations on recruitment, pay scales, promotions, etc. HR Information Systems (HRIS): Essential for making effective HR strategies, HRIS helps in making informed decisions and performing other HR functions.

These strategic models and business practices in India are constantly evolving to meet the changing demands of the market, offering a variety of approaches from traditional consulting to innovative solutions that cater to specific client needs.