By then, it’s reactive, stressful and expensive.

The smarter move is choosing the right support before you need it urgently.

But with several options at different price points, it’s hard to know which one is worth the money.

This guide breaks down your options, costs and the pros/cons, so you can avoid costly employee problems and spend more time running your business.

Levels of HR

HR operates at different levels:

Operational HR

This is the foundation. It covers the day-to-day work that keeps you legally compliant and your business running.

• Contracts, handbooks and policies
• Absence and holiday management
• Disciplinary and grievance procedures
• Health and safety basics

Tactical HR

This level helps you to manage and improve how your people work.

• Recruitment and onboarding
• Performance management
• Training and development
• Supporting line managers to handle issues earlier

Strategic HR

This is where HR starts to drive growth. It connects your people decisions directly to business outcomes.

• Workforce planning and organisational design
• Leadership development and succession planning
• Culture, engagement and retention strategies
• Change management

Many small businesses only ever get support at the operational level.

That keeps you compliant but it won’t help you to build a stronger, more capable team. The right HR support should be able to help across all 3 levels.

Your 4 main HR options

Option 1: Give it to an existing team member

Most common starting point and the cheapest on paper. Your office manager or admin lead picks up HR tasks alongside their existing role.

But someone without HR training won’t know where the legal risks sit. They won’t spot the issues that escalate into formal processes, tribunal claims or costly mistakes.

We often see businesses in this situation where contracts are out of date, policies don’t reflect current law and problems with employees have been left to drift because nobody felt confident enough to deal with them.

Option 2: Hire a dedicated HR manager

If you want someone in-house who owns HR fully, this is the route. You get a dedicated person who knows your team, sits in the business every day and can respond in real time.

The downside is cost. Including employment costs, a full-time HR manager in the UK typically earns between £40,000 and £55,000 a year.

For businesses with fewer than 50 employees, this is often hard to justify.

There’s also a knowledge gap to consider. One person can only bring so much experience. If they’ve never dealt with a tribunal, a complex grievance or a restructure, they’ll be learning on the job, at your expense.

Option 3: Use a large HR provider

Companies like Peninsula and other similar large providers offer fixed-fee HR packages, often bundled with software, a 24/7 advice line and legal protection insurance.

Packages typically start from around £200 per month, but costs increase with complexity and headcount. Annual contracts are common.

The advantage is simplicity. You pay a set fee and get access to a phone line when issues come up.

The limitation is depth. You’re usually speaking to a different person each time you call.

They don’t know your business, your team or the history behind an issue. Advice tends to be cautious, template-driven and non-strategic, because the provider is protecting itself, not necessarily giving you the most practical answer.

Option 4: Work with an independent HR consultant

An independent HR consultant gives you direct access to experienced, senior-level HR support without the overheads of a permanent hire.

Typical rates in 2025/26 range from £80 to £150 per hour, or £500 to £1,000 per day. Many consultants also offer tailored monthly retainer packages.

A huge upside is that a consultant gets to know your business. They understand your team, your sector and the specific challenges you’re dealing with. That means advice is practical, relevant and tailored, not generic.

Because they work across multiple businesses, independent consultants tend to have broader experience than a single in-house hire.

They can also flex up or down with their time, depending on what you need. Often, you only pay for what you use.

Most importantly, an independent consultant can deliver across all 3 levels of HR, from admin and compliance right through to strategy and growth planning.

Cost comparison

Here’s a comparison of what you can expect to pay for each type of HR support. These figures are based on current UK salary data and typical market rates for 2025/26.

How to decide what’s right for your business

There is no single right answer. It depends on the size of your team, the complexity of the issues you’re dealing with and how much risk you’re comfortable carrying.

Here are some things we often see:

• For businesses with fewer than 10 employees, an independent consultant on a pay-as-you-go or light retainer basis usually makes the most sense.
• Businesses with 10-30 employees tend to benefit most from a monthly retainer with an independent consultant.
• Businesses approaching 50 employees might start to consider an in-house HR manager, but many still find that an independent consultant offers better value and broader experience.

What to look for in an independent HR consultant

If you decide to go down this route, look for someone who:

• Has hands-on experience with businesses your size and in your sector
• Can show they work across all three levels of HR, not just policies and compliance
• Gets to know your business rather than giving off-the-shelf advice
• Is upfront about costs and flexible in how they work with you
• Will flag risks before they escalate, not just respond when things go wrong

A good consultant should feel like a trusted part of your team, someone you can call when you’re unsure, someone who helps you to make better decisions and someone who saves you time, money and stress.

We’re here to help

If you’re weighing up your options and want to talk it through, we’re happy to help.

We work with small businesses across the UK, providing flexible, senior-level HR support that fits around your needs and your budget.

Get in touch for a free, confidential conversation about what would work best for your business.