People work for a growing company comes from four kinds of outside provider. An HR consultant completes a project. A PEO or payroll provider administers pay and benefits. An employment lawyer advises on legal risk. A fractional CHRO leads the people function. Founders often have the second and third and assume they have the fourth.
What an HR consultant delivers
An HR consultant takes a defined task: write a handbook, run a compliance audit, build salary bands, design a review process, conduct a workplace investigation, or recruit for a hard-to-fill role. The deliverable is a document, a process or a finding. Fees are fixed or hourly. A handbook might run $3,000 to $8,000, a compensation project $5,000 to $15,000. When the deliverable is accepted, the consultant leaves.
What a PEO and a lawyer provide
A PEO becomes the co-employer for payroll, benefits and some compliance, and usually offers HR support by phone. It handles the transactions well. It does not design your org structure, coach your managers or decide how to handle a struggling team lead.
An employment lawyer advises on legal exposure: a termination with risk, a contract, a claim. The advice is privileged, which matters in disputes. Lawyers do not run performance cycles or build pay structures.
What a fractional CHRO owns
A fractional CHRO owns the people outcomes. They keep policies current as you hire in new states, run the review cycle, maintain pay bands, coach managers through hard conversations, decide when to bring in counsel and report to the CEO on turnover, hiring and risk. Quotes typically run $3,000 to $10,000 a month for 4 to 10 days.
Who signs off on decisions
A consultant recommends a pay structure; the CEO adopts it and someone maintains it, or nobody does. A fractional CHRO designs the structure and applies it to every raise and offer, within the budget the CEO sets. The same goes for terminations: a consultant advises on process, and the fractional CHRO manages the process with the manager, documents it and decides when the lawyer should review. Write down which people decisions the fractional makes alone, which need the CEO and which always involve counsel.
When a consultant is enough
If you have a capable HR manager and need specialist help on one piece, hire a consultant. A compensation study, an investigation by a neutral outsider, or a handbook for a new state are good examples. If you are under 25 employees and have a PEO, a consultant on call may cover what you need.
When you need a fractional CHRO
You need one when people decisions have no senior owner. The signs: managers come to the CEO with every people question; the handbook was written for one state and you now hire in five; pay was set case by case and employees have noticed; turnover in one team is high and nobody knows why; or a consultant’s audit found risks that nobody fixed.
Working together
A good fractional CHRO coordinates the others. They brief the PEO, commission the consultant when needed and bring in counsel early. Ask candidates which PEOs, payroll systems and employment firms they have worked with, and how they divide work between them.