With the labor market presenting challenges for both job seekers and recruiters, many companies are looking into alternatives to traditional hiring to add capacity to their teams. One option some companies are considering is fractional hiring, a type of contract work that can help organizations overcome the challenges of today’s job market, get interim support, and scale up more cost effectively.
In fact, the majority of hiring managers surveyed in Robert Half’s September 2023 hiring and employment trends research expected to bring in more contract workers in the future.
In this article, we’ll dive deep into the fractional hiring trend to explain why it’s on the rise.
What is Fractional Hiring?
Fractional hiring refers to hiring an individual for a fraction of the time a full-time employee would work. That could be as low as five hours per week. Unlike a traditional part-time employee, who might receive benefits like health insurance and PTO and usually only works for one company, fractional workers typically split their time between multiple organizations throughout the month and source their own benefits.
Fractional hiring has been a growing trend for several years, especially for executive-level roles like chief operating officer (COO), chief financial officer (CFO), human resources business partner (HRBP), and chief marketing officer (CMO).
In fact, we took a look at Google Trends data and found that the term fractional executive was virtually unheard of before 2014, at least according to search behavior trends. But since 2022, searches have been on the rise — reflecting the growing interest in this hiring strategy.
Recently, we’ve also noticed more companies seeking fractional talent for interim roles such as operations manager, chief of staff, associate chief of staff, and executive assistant.
Why Should You Consider Fractional Hiring? 3 Reasons
There are many benefits of fractional hiring, especially for startups and small-to-medium sized businesses that can’t afford the cost of a traditional full-time hire.
Fractional Hiring is a Low-Risk, Versatile Staffing Solution
Growing organizations, especially nonprofits, startups, and small-to-medium businesses, can often benefit from the expertise of a C-level executive long before they can comfortably afford a C-level salary. Some leaders make the bold decision to hire a full-time COO or CFO even before they’re completely ready in the hope that the new executive will drive significant business growth. But this is a risky strategy.
Hiring fractional talent is a much less risky option. Fractional hiring makes executive-level support accessible at a fraction of the cost of full-time hiring. You’re only paying for part of the executive’s time, you don’t have to provide any benefits or office space, and the hiring process itself is more cost-effective. You can bring on someone with the experience you need to navigate the growth period you’re in, while keeping your costs manageable.
Additionally, if market conditions change suddenly and you need to quickly cut costs, you can cancel a contract with a fractional executive with just 30 days’ notice in most cases.
Fractional roles are also very versatile. They’re great for providing interim support while you search for a full-time employee to backfill a C-level role. While you look for a candidate, you can get an interim executive to manage the most critical duties of the role. The fractional executive will give you space to breathe to avoid the costly mistake of a mis-hire. Once you find someone, the fractional executive can stay on to help onboard the permanent hire, ensuring a seamless transition.
Another situation where fractional professionals can provide critical support is during an executive’s sabbatical or medical or parental leave. A generalist, such as a chief of staff, can handle a wide variety of responsibilities to keep critical projects moving until the executive returns.
Fractional Hiring is a Cost-Effective Solution for Fast Interim Support
When you need someone to fill a role immediately, fractional hiring is one of the fastest ways to fill a role with a qualified candidate. An executive staffing company that specializes in fractional roles (like vChief), can typically provide two to five highly curated and vetted candidates within a week. If you find a good match, you could have a new team member starting in less than two weeks.
Fractional hiring can also be more cost effective than full-time hiring for short-term positions. The cost of hiring for any single full-time position can be up to three times the salary, according to SHRM’s Real Costs of Recruitment report. A big contributor to that cost is the time departmental leaders and managers have to invest in supporting the HR-specific roles of the hiring process.
The fractional hiring process is much more cost effective and streamlined, taking as little as two weeks and cutting out the time and expense of posting on a job board, setting up an applicant tracking system, and sourcing and screening candidates.
Fractional Hiring Helps Companies Scale More Efficiently
In addition to streamlining the hiring process and reducing costs, fractional hiring offers another significant advantage: it helps organizations scale more efficiently. By leveraging the expertise of fractional leaders, companies can strategically expand their operations without the financial burden of full-time salaries and benefits. This approach not only provides access to top-tier talent at a fraction of the cost but also helps businesses navigate growth transitions more smoothly. Let’s explore how fractional executives can drive efficient growth in various key roles.
Fractional CoS
The chief of staff role is highly adaptable and designed to maximize an executive’s effectiveness. CoS candidates are strong generalists, capable of strategic thinking and execution across various disciplines. They fill gaps in HR, operations, finance, or fundraising, allowing growing organizations to expand leadership capacity without the expense of another C-level position.
Fractional COO
A fractional COO is a senior operations leader who can develop streamlined systems to address bottlenecks caused by company growth. By improving operational efficiency, a fractional COO helps organizations serve more customers effectively, ensuring sustainable expansion.
Fractional CFO
A fractional CFO brings experience from leading multiple organizations through critical growth transitions. They bridge traditional accounting with strategic financial planning, optimizing cash flow, upgrading financial processes, and supporting overall financial health and profitability.
How Does Fractional Hiring Work?
Fractional hiring is a flexible, versatile, and low-risk staffing strategy because with most fractional staffing agencies, you won’t be locked into any long-term contracts. At vChief, you can increase or decrease the number of hours you’re subscribed to from month to month as long as you notify us by the 15th of the previous month. And if you no longer need the support of a fractional executive, you can cancel with just 30 days notice.
Many people are drawn to fractional work because of the increased flexibility it provides as compared to full-time employment. They can apply their industry knowledge to interesting challenges while working a less rigid schedule than they might have at a traditional job.
Here are some answers to frequently asked questions about fractional staffing.
What Kind of Projects Can a Fractional Executive Take On?
Fractional hires can take on a wide range of duties. Acting more like an in-house team member than an outside consultant, they can tackle initiatives that require cross-departmental collaboration or interfacing with external stakeholders. Or you could bring them on to work independently on a specific project that would otherwise fall entirely on the leader’s plate.
They can also support a leader with personnel management. While they can’t directly manage an employee, meaning they can’t be the one to make final decisions about hiring, performance improvement plans, or firing, they can coach, train, and mentor employees, and they can draft things like offer letters and professional development plans on behalf of the leader.
Is There an Upper Limit to the Number of Hours a Fractional Team Member Can Work?
A fractional team member can work as many hours per week or month as they want. If you work with a fractional staffing agency like ours, and you find that you need more support than your fractional executive can provide in a given month, you can hire multiple fractional executives to work in tandem.
If you engage someone on a fractional basis for a long time, they may want to take planned vacations. In that case, they’ll usually work with you to front or back load their hours during the month that their vacation falls into so that your costs stay the same and the work gets done on time.
Is a Fractional Team Member an Independent Contractor?
One of the ways fractional work differs from part-time work is in the way the person is classified legally. Fractional executives are considered independent contractors. This means they don’t receive any of the benefits or legal protections that W-2 employees receive. They are typically self-employed consultants who operate their own LLC, and many of them have multiple clients.
It’s important to never misclassify someone who should be considered an employee as an independent contractor. At vChief, our team will work with you to outline a scope of work that clearly meets the definition of an independent contractor in your area.
Access Top Talent for a Fraction of the Cost with Fractional Recruiting
Fractional hiring is a smart way to manage your company’s growth while keeping your costs low.
At vChief, we place talented change-makers in fractional roles such as Associate Chief of Staff, Chief of Staff, Chief Operating Officer, and Human Resources Business Partner. Our clients include startups, small businesses, nonprofits, foundations, charter schools, and corporate enterprises.
We have a diverse talent pool of nearly 400 highly qualified executives who are ready to take on fractional roles. When you work with us, you don’t even need to write a job description. Our talented team will assess your needs during a free consultation and create a scope of work outlining exactly the kind of support you need.
Schedule your free needs assessment today.
