How to Start an HR Consulting Business: A Step-by-Step Guide

HR consulting is all about helping businesses manage their most valuable asset – people. From recruitment and performance to policies, training, and culture, HR consultants bring the expertise that many small and growing companies lack in-house.

It’s a promising business idea in the UK, where demand for flexible, outsourced HR support continues to rise. Trends like hybrid working, HR tech, and DE&I are creating new opportunities for independent consultants, as many smaller businesses lack in-house expertise in these areas.

Whether you’re an experienced HR professional, freelancer, or someone ready to turn their people skills into a full-time venture, running an HR business offers many possibilities. Here’s how to start an HR consulting business.

Why is now a good moment to start an HR consulting business?

If you’re thinking about starting your own HR consulting business but need a little more reassurance, look no further. Here’s why you should start an HR consulting business today:

• The global HR consulting / HR professional services market is growing. The global HR consulting services market is projected to reach USD 68 billion by 2035, with steady compound growth.
• HR outsourcing / HR tech is also expanding – the HR outsourcing (HRO) market is forecast to grow at ~5.3 % CAGR over 2025–2029.
• HR analytics is a fast-growing niche: the UK HR analytics market (data, predictive modelling, workforce planning tools) is expected to grow at ~14 %+ CAGR, potentially reaching USD 550–600 million by 2033.

These trends point to both steady baseline demand (compliance, recruitment, training) and evolving demand (tech, analytics, remote working, DE&I, people analytics).

How can you help your clients?

As an HR consultant, your job is to provide practical solutions that help businesses manage their people more effectively. You can:

• Improve onboarding, retention, and employee engagement: Design structured onboarding programs, retention strategies, and initiatives to boost morale and reduce turnover.
• Clarify roles and performance expectations: Create clear job descriptions, performance metrics, and career paths to help employees succeed and align with business goals.
• Ensure compliance with employment law: Review contracts, policies, and procedures, and guide clients through disciplinary processes or disputes.
• Optimize remuneration and benefits: Assess and restructure pay and benefits to attract and retain top talent while staying competitive.
• Enhance workplace culture: Advise on engagement strategies, team dynamics, and wellbeing programs to foster a positive and productive environment.
• Support remote and hybrid work: Develop fair policies, performance measurement systems, and strategies to manage distributed teams.
• Implement HR systems: Assist with selecting and deploying HRIS, payroll, or applicant tracking systems for efficient people management.
• Streamline organizational structure: Advise on reporting lines, span-of-control, and team structure to improve efficiency and accountability.
• Manage change effectively: Guide businesses through redundancies, restructuring, or other organizational changes.
• Drive diversity, equity and inclusion: Develop strategies, initiatives, and training to create a more inclusive and equitable workplace.

The services you choose to offer may depend on your expertise and client needs, but the process of starting an HR consulting business, like building credibility, marketing your services, and delivering value is largely the same.

How to start an HR consulting business: The step-by-step guide

Now that you know your why, it’s time to get to the how. Here’s a step-by-step checklist to help you get things off the ground.

Step 1: Choose your company structure

If you're going to run a professional HR consulting business that includes invoicing, signing contracts, and hiring subcontractors, you will want to register it. Doing so also allows you to scale your business and build greater credibility with clients.

Each structure has its pros and cons, so choose based on liability, tax, scale, perception, and growth plans.

Many consultants begin as sole traders or single director Ltd companies and evolve over time. In the HR field, having a limited company often gives more credibility in B2B proposals.

Pro tip: Skip the paperwork and confusion – ANNA can register your company, handle all your filings with Companies House and HMRC, and even open your business account at the same time. You’ll be ready to trade in minutes, stress-free.

Step 2: Get your licences and insurance

HR consulting is relatively unlicensed compared to regulated professions, but you should consider:

• Professional indemnity (PI) / errors & omissions insurance – To protect yourself if your professional advice leads to financial losses for the client.
• Public liability insurance – If you ever meet clients in person or on-site, it protects you against claims for accidents or injuries that occur on your premises or while working on-site.
• Employer’s liability insurance – If/when you hire staff or subcontractors, it covers you in case they are injured or fall ill due to their work for your business.
• Data protection / GDPR compliance – As HR work deals with personal and sensitive employee data, you must comply with GDPR. Register with the Information Commissioner’s Office (ICO) if needed.
• Employment law / legal compliance – If you intend to give advice on contracts or dismissals, you may want to partner with or refer to legal counsel.
• Industry-specific rules – In HR consulting itself, there are no hygiene/DBS requirements, but if you're consulting in a regulated domain (e.g. working with schools or vulnerable clients), you may need background checks, safeguarding training, or sector-specific compliance.

Step 3: Plan your finances

You can launch an HR consulting business with relatively low overheads, and many consultants start from home and scale as they grow. Here’s a breakdown of the typical initial setup costs:

Ongoing costs

Once up and running, you’ll have predictable monthly or annual costs that keep the business running smoothly:

Profit margins

Knowing your potential profit margins is an essential part of financial planning, which is why you need to set clear pricing models. If you're not sure how much to charge your clients, take a look at some potential pricing plans:

Typical gross margins in HR consulting range from 50–70 % (or higher for solo consultants) since most costs are service-based.

Step 4: Attract your clients

Getting your first few clients is often the hardest step. Here's how to approach it:

1. Define your ideal client profile

When launching an HR consulting business, you’ll want to identify which kinds of clients you wish to assist. Possible segments include:

• Small and medium enterprises (SMEs): Many SMEs don’t have an HR team. They often need help setting up policies, hiring cycles, performance systems, contracts, onboarding processes, etc.
• Startups and scaleups: They may need help designing people operations, culture, HR tech stacks, or scaling HR processes rapidly.
• Nonprofits and charities: They often have budget constraints and need guidance on compliance, volunteer policies, and retention.
• Established firms and mid-market: They may outsource parts of HR or want a consultant for specific projects.
• Niche verticals: For example, tech firms, creative agencies, remote-first firms, fintech, and regulated sectors (e.g. health, education) need experts in those fields.
• International and remote companies with UK presence: Firms outside the UK that hire or operate in the UK often need help navigating UK employment law, contracts, IR35, or remote HR policies.

2. Use different strategies

Once you know who you want to work with, you can implement these strategies to attract those ideal clients:

3. Build trust

Once you attract your clients, you need to work just as hard to keep them. Some things you should consider doing include:

• Always publish case studies, anonymised if necessary.
• Showcase testimonials & reviews.
• Use before/after metrics (e.g. turnover reduction, efficiency improvements).
• Offer free audits/health checks to prospects (e.g. HR process audit) as a lead magnet.
• Maintain a clean, professional online presence.
• Get credentials or certifications (e.g. CIPD membership, HR certifications).
• Publish thought leadership (guides, whitepapers, toolkits) to show depth.

Step 5: Streamline your work

Running your own HR consulting business doesn’t mean doing everything by hand. The right digital toolkit will save you hours of admin, keep your finances neat, and help you look professional from day one:

How to start an HR consulting business seamlessly with ANNA

Starting your HR consulting business is easier than you think – especially when you’ve got ANNA by your side.

ANNA is your all-in-one business platform, combining a smart business account with invoicing, expenses, bookkeeping, and tax tools. We even handle your company registration with Companies House, so you can go from idea to fully registered HR consultancy in a single day.

ANNA is also an Authorised Corporate Service Provider (ACSP), officially trusted by Companies House to carry out ID checks for anyone forming a UK company. This means that your business setup is 100% compliant from the get-go.

Here’s how ANNA helps you launch like a pro:

• Check your business name for free – Our free company name checker instantly tells you if your preferred name is available, and it even suggests creative alternatives.
• Register your company the same day – ANNA can handle this for you.
• Open your business account in under 10 minutes – No paperwork, no waiting around.
• Send professional invoices in seconds – Every invoice comes with a secure payment link, QR code, or Stripe option for instant payments.
• Automate your finances – From expense categorisation and bookkeeping to real-time tax estimates.
• Stay compliant with ease – We’ll remind you about VAT, PAYE, and your Confirmation Statement before any deadlines hit.
• Simplify MTD without paying a penny – From 2026, UK sole traders will need to file taxes digitally four times a year. With ANNA, it’s effortless and free. ANNA automatically collects your data, prepares your returns, and files them with HMRC – 100% for free for the first 12 months.

With ANNA, your HR consulting business starts on the right foot – fully registered, financially organised, and ready to grow from day one.

👉 Register your HR consulting business with ANNA today – it’s fast, free, and fully compliant.