The Financial Advantage of Fractional Hires

Companies constantly seek innovative solutions to streamline operations and cut costs without compromising productivity. In 2023, we witnessed drastic cost-cutting in the form of global redundancies. However, we are now seeing different strategies being increasingly adopted.

One such strategy gaining popularity is the adoption of fractional hires. Fractional hiring involves bringing in specialised professionals on a part-time or project basis rather than hiring full-time employees.

Oakstone spoke to previous technology Chief Revenue Officer Dominic Le Claire, who now offers global fractional services to technology companies. "Hiring a fractional CRO can be a game-changer for startups looking to turbocharge their sales efforts without the commitment and financial burden of a full-time hire. It allows them to tap into the expertise of a highly skilled professional, optimise their revenue generation, and drive growth for their business."

Understanding Fractional Hiring

Fractional hiring refers to engaging professionals, often at a senior level, for a fraction of their time. These professionals may work remotely or on-site, contributing their expertise to specific projects or departments. The idea is to tap into their specialised skills without the commitment and cost associated with a full-time position.

This approach contrasts with traditional hiring models where companies hire full-time employees, incurring salary costs and additional expenses such as benefits, office space, and equipment. Fractional hires allow businesses to access top-tier talent without long-term financial commitments.

Cost-Effective Expertise

US-based Fractional CRO and SaaS Leader Debe Rapson highlights, "Fractional hires allow companies to hire very experienced Executives to scale more efficiently because they have the experience that the early-stage company typically couldn't afford. They bring their operational, sales, marketing and financial plays that have worked time and again, so fewer mistakes are made, and a startup gets quick time to value."

For instance, a company looking to enhance its digital marketing strategies might engage a fractional Chief Marketing Officer (CMO) to develop and implement a comprehensive strategy. Instead of hiring a full-time CMO, which could strain the budget, the company can benefit from the expertise of a seasoned professional for a specified number of hours per week or on a project basis.

Flexibility in Scaling

The business environment is inherently unpredictable, with fluctuations in demand, project timelines, and economic conditions. Fractional hiring offers a high degree of flexibility for companies to scale their workforce up or down based on immediate needs. This adaptability is particularly advantageous for businesses facing seasonal demands or those involved in project-based work.

In a traditional hiring model, adjusting the workforce to align with variable workloads can be a cumbersome process involving layoffs, severance packages, and potential damage to employee morale. Fractional hires allow companies to scale more efficiently, bringing in additional expertise when required and scaling back without the complexity and cost associated with full-time employees.

Enhanced Productivity and Focus

Fractional professionals are accustomed to delivering results in a limited timeframe, making them highly efficient contributors to specific projects.

By engaging fractional hires, companies can leverage the expertise of professionals who are not burdened by the day-to-day responsibilities of a full-time position. This focused approach can lead to quicker project completion, improved quality of work, and overall increased efficiency within the organisation.

Building a Customised Talent Ecosystem

Another advantage of fractional hires is the ability to build a customised talent ecosystem tailored to the business's unique needs. Companies can assemble a team of fractional professionals with diverse skill sets, ensuring a well-rounded and agile workforce. This flexibility enables businesses to adapt to changing market conditions and stay competitive in an ever-evolving business landscape.

Le Claire continues, "Startup CEOs often have multiple responsibilities and limited time. By outsourcing the sales function to a fractional CRO, CEOs can free up their own time to focus on other crucial aspects of the business, such as product development, fundraising, or marketing."

Fractional hires can also be utilised to educate and support current full-time employees – allowing them to expand their knowledge and skills. 

Considerations and Challenges

Whilst making a fractional hire on a part-time or project basis can unlock savings, it is worth being mindful of the challenges of fractional hiring.

While fractional hires offer significant benefits, it's essential to acknowledge potential challenges and considerations. Rapson says, "Often companies want Fractional hires to become integrated into their team, which can take time. They ask fractional leaders to attend meetings that don't matter, and they expect the leader to be a part of building the culture. This can take time away from doing the work they are expected to do. Businesses often treat fractionals as employees and don't understand how to use them properly. Often, their expectations aren't realistic when it comes to quick results. A fractional leader isn't a silver bullet."

Clear and well-defined project scopes, deliverables, and timelines ensure that fractional hires align with the company's goals. Moreover, building a cohesive team dynamic can be challenging when working with professionals not physically integrated into a business's culture.

"It is important to debunk the notion that fractional hiring is necessarily quicker and easier. In reality, finding the right fractional talent can be more challenging due to a smaller pool and diverse experiences, often requiring compromises on desired skill sets. Business leaders need to carefully evaluate their needs: should they opt for a part-time C-level generalist, or would a full-time, vertically specialized VP be more beneficial? Ultimately, businesses must assess their challenges and budget constraints to determine whether a fractional or full-time hire is the most suitable choice." – Steve Farr, Oakstone Divisional Director.

In conclusion, adopting fractional hires can help businesses save money while gaining access to specialised expertise. The financial advantages, including cost-effective access to talent, flexibility in scaling and reduced overhead costs, make fractional hires an attractive option for companies of all sizes.

However, it's crucial for businesses to carefully evaluate their needs, communicate effectively, and implement the necessary tools and processes to make fractional hiring a successful and seamless part of their workforce strategy. When executed strategically, fractional hires can contribute significantly to a company's success by providing the right expertise at the right time, ultimately unlocking savings and fostering sustainable growth.