Limited Budget? The EHS Services Cost Truth SMEs Want.

By : Admin - November 22, 2024

The consulting costs associated with environmental, health, and safety (EHS) services chill many small and medium enterprise (SME) owners and general managers.

Let’s face it . . . A robust EHS compliance program is not a business luxury in today’s market. It is necessary, as ignoring it can put an operation at risk of hefty fines and a damaged business reputation. Yet, many SME owners and general managers are apprehensive about the cost of engaging consultants to help build the strategy needed to excel at EHS.

However, this fear often stems from ignorance about what’s involved or what to expect. Suppose a restaurant owner contacts a consultant about EHS services to create a hazard communication plan. The owner has a budget of $250 for the plan and receives a shock when the consultant quotes a price of $1,000. However, this pricing includes the necessary data gathering, assessment, inventory creation, and form building, which the owner was unaware needed to be completed alongside the plan authoring. Sound familiar?

Why does this occur? Experts are not always transparent with their consulting fees. This stance on the part of consultants stems primarily from fears that they will scare off clients or give their competitors an edge. Nevertheless, this mindset only hurts the practitioner and their potential clients. Companies buy from people they know, like, and trust. Consultants fail to build that trust when they hide information about the cost of their products and services.

However, this post will remove the veil on EHS services costs, including the items impacting the consulting fees and tips to help you manage engagement without breaking the bank. So, keep reading to gain the knowledge you need to correctly inform your decision to hire a consultant to help enhance EHS compliance.

EHS Services Basics

Before diving into costing, we need to look at EHS services in general. Consultants in the environmental and safety space possess a variety of client offerings, ranging from very simple to more complex. Furthermore, they use differing pay models and delivery methods to serve their customers.

EHS Offerings

EHS consultants can provide a myriad of products and services to potential clients. The following list displays examples of the types of assistance offered, but it is by no means exhaustive. Not all experts will offer every item listed below, as they often tend to focus on their areas of expertise:

Hazard identification
Assessments (risk, hazard, environmental)
Regulatory applicability research
Permitting
Compliance plan/standard operating procedure (SOP)/checklist development
Workforce training
Auditing and inspections
Compliance reporting
Environmental sampling and monitoring
Data analysis and compliance/permitting calculations
IH sampling and monitoring
Incident investigations
Environmental remediation
Culture building & workforce engagement initiatives
Control measure identification and execution
Management system implementations
Digital platforms solutions for EHS

EHS Services Fee Types

Just as the offerings differ from consultant to consultant, the payment structures will vary. Some EHS experts prefer to work on the retainer model, in which the client pays an upfront fee for services or products rendered over time. You can think of a retainer as a deposit, from which the consultant will deduct their payments as they work. Additionally, requesting a retainer for large, lengthy EHS compliance projects is common, especially when working with a new client.

Other EHS services companies follow a subscription model. This framework is not unusual for businesses offering software as a service (SAAS) platforms for data collection, management system support, reporting, and or online training. Moreover, clients pay a recurring monthly or annual fee, usually per user, to access the platform.

EHS consultants may also choose to bill their clients after delivering the work or product. Generally, experts will charge an hourly rate for services rendered. In EHS consulting, the hourly rates can run from $75-$500 per hour. In addition, some experts may package their EHS services with fixed-rate pricing. Doing so helps to reduce the administrative burden on the consultant while making the consulting costs more straightforward for the client.

Delivery Methods

Practitioners also pursue differing models to deliver their EHS offerings. Some practitioners may provide their knowledge and expertise in the form of products. Items like pre-built templates, assessment tools, software programs, online video training, etc., can be utilized by SMEs with little to no further intervention from the consultant. Likewise, any necessary customization would be the client’s responsibility or could be completed at an additional cost by the expert.

Coaching is another model for EHS consultants. Under this format, the practitioner provides expert guidance on environmental or safety program tasks completed by the client. The expert may provide the client with templates and tools to support the client’s EHS compliance efforts, review the work, and give feedback on potential improvements. Moreover, they may act as a project manager to keep more complex initiatives moving efficiently.

The most popular model in EHS consulting is the deliverable framework, in which practitioners take clients’ specifications and complete the work on their behalf. Upon conclusion of the work, the customer usually receives a deliverable in the form of a report, permit application, compliance plan, SOP, training program, or other written documentation.

Some consultants offer their EHS services by utilizing only one of the delivery methods provided above. Yet, others, like Prorsa Consulting, may use a couple or all of these tactics to serve their clients best.

What Really Drives the Consulting Costs Associated with EHS Services?

Three main items impact the final consulting fees clients will pay . . . the delivery method, the scope of the services, and the practitioner’s experience level. Let’s take a deeper look into each of these topics.

The Delivery Method’s Part in Consulting Costs

How services are rendered plays a significant role in determining pricing for EHS services. Delivery methods that require less involvement from the practitioner will drive the consulting costs lower. Conversely, a higher price tag will accompany approaches that employ a more customized touch.

If we look at the delivery methods discussed in the previous section, products will generally be priced lower than the other EHS services renderings. For example, the digital downloads offered through Prorsa Consulting’s Store are priced on average 10x to 20x cheaper than a similar custom deliverable built by the principal consultant. Our products require effort on the part of customers after purchase to customize and utilize them. Moreover, the buyers do not receive the same access to an EHS compliance expert, but this delivery method will save money.

The coaching model represents the middle of the road with regard to consulting fees. Providing guidance, feedback, or project management assistance will usually require less of the EHS consultant’s time than actually completing the work. Furthermore, this approach generally provides the best of both worlds . . . The operation benefits from the consultant’s expertise at lower overall consulting costs than traditional deliverables. Likewise, the consultant retains time to serve more clients. Prorsa Consulting’s FORGE EHS Program provides a solid example of a coaching format within EHS consulting.

As you have probably guessed, the deliverable model is the most expensive of the delivery methods discussed here. EHS compliance deliverables are often highly customized to the client and require scoping for the practitioner to arrive at a suitable consulting fee. Thus, most consultants charge hourly fees for their deliverable projects as they will often require more investment from the expert to complete. Prorsa Consulting’s EHS Compliance Support Services demonstrate a deliverable model for EHS services.

How Scope Impacts Consulting Fees

Regarding EHS consulting projects, you can think of scope as the number of tasks or time required to complete the project. As such, you can expect consulting costs to increase as the number of tasks or the time increases. Moreover, this is not always a simple 1:1 product, coaching, or deliverable ratio.

For example, if Company ABC needs Tier II reporting assistance but Company XYZ requires an air emissions inventory submittal, the consulting costs will be higher for Company XYZ. Why? The time and expertise necessary to complete and submit an air emissions inventory is significantly greater than with a Tier II report. Even though it may seem on the surface that these two companies should have the same scope because each is requesting a single environmental compliance report submittal, the relationship is not 1:1.

Furthermore, projects may require additional equipment, materials, or personnel to execute, which equates to a high final cost. If travel to your site is necessary, hotel room, rental car, plane ticket, and meal costs may also be included in the final EHS services price.

Depending on the consultant, all these extras may be billed at cost or marked up to recoup the associated administrative burden. Administrative fees, when charged, usually range from 5% to 20%.

EHS Services Practitioner Experience Level Links to Costs

Just as employees expect their wages to rise as they gain experience, more tenured EHS consultants tend to charge higher rates than less experienced professionals. Generally, practitioners who have worked more years in the EHS field have had the time to truly become experts within their chosen specialties.

Likewise, they oftentimes have a better understanding of the regulatory landscape and available best practices. More seasoned experts’ exposure in the EHS usually has also provided an opportunity to build a network that can be relied upon for insider insights and answers to complex questions. Some EHS consultants only offer services in one specific area. Thus, they become excellently skilled at and charge more for that one thing.

For instance, a practitioner may only conduct environmental site assessments for clients. They may complete 35 of these evaluations in a year. Conversely, a different consultant may offer the same service but only completes five of these analyses in a year. Over time, the first EHS service provider will become more skilled at this task much quicker and can command higher prices for their assessments.

Generally, EHS coordinators or specialists will be billed at the lower end of the EHS consultant hourly rate scale when dealing with a firm. Project managers and senior project managers represent the middle of the range. Business unit program managers and principals are usually billed at the top.

If you engage a solo consultant, they will set their billing rates to align with their experience and compete in the market. As a result, many lone consultants will have hourly rates lower than similarly experienced EHS professionals employed by larger environmental or safety firms.

EHS Services Engagement Tips for SMEs to Manage Consulting Costs

SMEs often face challenges that larger businesses do not. Knowing what to ask and how to proceed when considering an EHS services provider can help to level the playing field. The tips listed below can assist SMEs in finding an environmental or safety consultant to fit their needs and budgets best.

Request a Free Consultation

A 30- or 60-minute consultation can help an operation gain clarity on regulatory requirements, identify possible hazards, outline a possible EHS compliance strategy, and more. The good news is plenty of EHS consultants offer free introductory consultations even if they don’t advertise it.

Consultations are a fantastic way to perform reconnaissance on any EHS service provider you may want to engage for a larger project or long-term compliance assistance. So, go ahead and ask for a free meeting or call.

Prorsa Consulting provides free 30-minute discovery calls to help operations with EHS challenges. Want to talk to us? Book your free session here.

Get the Right Information about the EHS Services Presented

Regardless of the type of EHS services your company needs, there will always be questions concerning the proposed solution. SMEs must fully understand the resource expectations, possible obstacles, and work product specifications to make sound choices about the path forward.

Therefore, businesses should take a proactive approach when selecting a consultant for their EHS compliance endeavors. Don’t be afraid to inquire about alternative courses of action, customizing an existing product, or pacing work over a more extended time period.

Moreover, ask the EHS services provider about the steps they will take to ensure quality work and timely completion of your project. You can also request case studies and work samples from the consultant’s previous engagements. By collecting this information, your organization will be better equipped to make the best decision concerning EHS services.

Thoroughly Evaluate EHS Consultants

The last thing businesses would want is to hire a practitioner who is wholly unqualified to provide the services they need. As such, companies should vet their EHS vendors just like any other contractor.

Obtain and review information concerning the educational background, experience, and pertinent licenses or certifications of the EHS consultant who will perform work on your behalf. If multiple individuals will help fulfill your EHS compliance project needs, procure this information for everyone involved. Additionally, you can request a statement of qualifications for more information on the company and its capabilities.

It is also essential to gauge the organizational fit of the EHS services provider. Do their values align with your company? Will their communication style suit your needs? Is their schedule flexible enough to serve your operation? An EHS consultant with a stellar record and tons of experience isn’t a fit if you can’t work with the person.

Set a Reasonable Budget, Get Pricing Early, and Avoid Scope Creep

The perceived value of services versus the consulting costs is why many organizations shy away from consultants. However, both parties can take pride in their final results when price expectations are managed well.

SMEs should enter the engagement talk with an EHS services provider with a reasonable budget. If you expect the EHS consultant to give you 120 hours of work for $2,500, you may need to reassess your actual needs and reconsider the scope of your project.

Furthermore, your enterprise does not want to find the “perfect” EHS consultant only to discover late in the selection process that your company cannot afford the consulting fees. Therefore, SMEs should engage in pricing discussions early rather than waiting.

Be open about sharing your project budget and request a fee schedule, price list, and/or written quote from the consultant. Doing so will help you and the EHS practitioner avoid future misunderstandings.

Another item that often drives up consulting costs is a phenomenon known as scope creep. It occurs when work products or tasks outside of the agreed project plan are requested. If left unchecked, mid-project changes, reworks/revisions, unplanned on-site visits, and additional deliverables can increase the final price tag.

Sticking to the written project scope is always best to stay within budget. If additional services or products are needed, inquire about pricing before requesting completion of the work.

Final Words on EHS Services Costs for SMEs

The cost of EHS consulting should not be the only determining factor when deciding whether or not to hire an outside subject matter expert. In fact, environmental and safety consultants’ hourly rates are on par with what you would expect from a business strategy, management, financial, or operations consultant.

As we covered above, the delivery method, project scope, and consultant experience level will impact total costs. Investigating these items early in the buying process helps you avoid last-minute surprises. Moreover, SMEs can and should manage the entire engagement process to ensure expectations are met while staying within the budget.

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