Every company strives for continual growth. But with labour costs accounting for as much as 70% of total business costs, sometimes getting the talent needed to properly run, let alone scale a company isn’t feasible.
But what if you could not only have your cake and eat it, but have an artisan baker come in and make that cake for you?
Fractional hiring is the name of the game here. As an alternative to the traditional hiring process, fractional hiring allows companies to access the talent they need without having to commit to a full time or long-term role. In doing so, businesses can reduce costs not to mention risk.
From startups to trying to get off the ground to established businesses wanting to boost profitability—here is why fractional hiring could just be the secret to your success, especially when it comes to keeping those overheads in check.
What Is Fractional Hiring?
As the name suggests, a fractional hire is an individual who only works for a company part of the time.
There’s a little more to fractional hires than this though, as they are also specialists who deliver expertise exactly where it’s needed within a business. Offering essential support to key areas of operation, fractional hires make it possible for companies to scale or navigate complex challenges. All without having to pay for a full time salary or even commit to a long-term role.
Fractional hires work as many hours as the business needs for as long as they need. Typically, fractional staff are self-employed though can also work on behalf of an agency. They will usually perform the same role for several companies, dividing their time based on how many hours each business hires them for.
For example, a 40 hour work week could like so for a fractional worker:
Company A – 10 hours
Company B – 10 hours
Company C – 20 hours
In some cases, people also become fractional workers as a side hustle in addition to full time employment. Though, it’s more common for someone to work purely on a fractional basis for several companies at once.
Fractional Talent Role Examples
- Fractional Chief Financial Officer (CFO)
- Fractional Chief Marketing Officer (CMO)
- Fractional Chief Operations Officer (COO)
- Fractional Chief Technology Officer (CTO)
- Fractional Human Resources (HR) Director
- Fractional Product Manager
- Fractional Sales Director
While fractional roles have traditionally been associated with C-suite level positions, in today’s world, fractional jobs are getting increasingly broader.
Now, it’s possible to hire practically any specialist on a fractional basis, whether you need help with your company accounting or want to perform technical SEO improvements to your website.
It’s also good to note that while there are some overlaps with freelancers or part time employees, fractional hiring is a different type of working arrangement.
The Cost Efficiency Of Fractional Hiring For Businesses
The bottom line is always top of the agenda in business, and the decision to opt for fractional rather than full time hiring is no exception.
If you want to scale a team but don’t have the resources to bring everyone in full time, fractional is the way to go. Giving you another option than creating a full time role or having to sacrifice company performance, a fractional setup means you only pay for the hours you determine your business needs.
This means employers don’t pay for:
- A full time salary
- Payroll taxes
- National Insurance
- Paid time off
- Pension contributions
- Health insurance
- Other workplace benefits
There can also be lower costs associated with things such as HR and recruitment, since the way that fractional hires are brought in and interact with your business is also different.
In terms of what these savings look like in tangible terms, Forbes published an article in which it estimates that the fractional business model saves 30%-40% compared with the cost of hiring a full time employee.
The cost savings and overall benefits for businesses have proved to be so beneficial, it has led to one company announcing that ‘the future is fractional’ in a recent LinkedIn post.
Additional Benefits Of Fractional Hiring
Fractional hiring means your business calls the shots about the exact expertise needed and to what degree.
Many of these additional perks can also subsequently lead to reduced costs and ultimately higher ROIs for businesses.
Expertise On Demand
When you are trying to scale or solve a problem in your business, sometimes a full time hire isn’t necessary or even affordable. Fractional hires bypass these issues by only giving you the time you need to get the job done. As specialists in their field, they cut right to the skills or knowledge your business needs to reach its goals.
Flexible To The Needs Of The Business
As a business, you might need a certain specialism for two days a week or only while a project is taking place. Since you can determine the ‘fraction’ of a fractional hire in terms of days or hours per week, this makes fractional staff not only affordable but also fully flexible to the requirements of your business. Over time, you can increase the number of hours they work so long as the individual has availability.
Remote Fractional Hiring Removes Geographical Talent Barriers
It used to be the case that if your business is based in a city such as London then all of your staff would be too. But with many fractional jobs able to be done remotely, geographic restrictions no longer apply. Instead, the focus is on finding the very best talent based on the needs of your business. In some cases, expanding your talent search to other areas can also save your business money too.
Exposes Your Business To Diverse Business Models
Whatever expert you bring in as a fractional hire, they offer the same expertise to your company as they do several others simultaneously. With that, they bring all of the experience they are constantly learning elsewhere into your company too. As a result, a fractional hire can supercharge your business with an unrivalled level of insights and specialisms that are industry wide rather than just company wide.
Fast Onboarding
Fractional hires are parachuted into your business with a specific purpose in mind. They know exactly what you need from them, and they are ready to get straight to work. Forgoing lengthy onboarding, training and anything else non-essential to their specific role speeds everything up and also cuts costs.
Reduces Risk
According to GrassGreener Group, the cost of a bad hire is upwards of 3x of the original salary. These costs relate to aspects such as lost salary, wasted training, recruitment agency fees, lost productivity, loss of business and reputation damage.
If that sounds bad enough, they add that poor hires typically happen 30% of the time.
Since fractional hires are vetted experts who also have limited attachment to your business, this reduces the risk of a bad hire from multiple angles.
The Fractional Support Staff That Have Been Instrumental To Our Success
We couldn’t write about the many benefits of fractional hiring without giving a special shout out to those who have helped us grow at GoSquared, as well as our new climate-conscious email tool EcoSend.
As a casual reader of this post, you might also find it insightful to see fractional hiring from a real case study point of view.
JamPot
Based in the UK, GoSquared has relied upon JamPot for various areas of expertise over the years.
The fractional talent hire agency gives business owners access to top-level specialists in areas including administration, EA and operations, finance, human resources, legal, marketing, sales, strategic development and web design.
After all, most businesses can relate to the fact that it’s impossible to do it all alone. With so many specialists to choose from, JamPot enables business owners to leave the stress of trying to be a one man band behind in favour of a more harmonious tune, thanks to the specialism of each respective expert.
Our CEO James adds that JamPot “continues to be one of the highest ROI spends we make at GoSquared” which is very high praise indeed.
Bruno Scott From B Consultant Collective
In our quest to become a B Corp, we have valued the insights of industry professionals who have held a guiding light along the path to becoming a better business.
One such individual who was able to share their insights was Bruno Scott from B Consultant Collective.
When striving for B Corp certification, it’s not always a given that as a business owner you happen to know how to make the biggest impact. Experts such as Bruno ensure that businesses can access this important yet highly niche area of specialism with ease.
Tim Maiden From Green Small Business
Another person who has been helping us on our mission to be a business that looks beyond just making a profit is Tim Maiden who founded Green Small Business.
Green Small Business offer a wealth of services for businesses wanting to track and lower their carbon footprint. This includes carbon scoping assessments, environmental management systems, environmental certification, training and building energy assessments.
Given many companies want to be greener but often don’t know where to start, these types of services can be used to make a genuine impact to drive real change on the climate issues we’re all trying to navigate as businesses.
Fractional Hiring FAQs
Still have questions about fractional hiring, and why it’s so cost-effective? We’ve got you covered with some of the top queries, which we’ve answered below.
What Is A Fractional Role?
A fractional role describes when a position in a company is either project-based or is limited to a number of hours per week. Someone working in a fractional role can either work for several companies at once or only work a reduced number of hours to fit around other commitments. However, the main difference between a fractional hire and a full time hire is that the fractional hire is usually self-employed or works on behalf of a fractional agency. They are their own entity rather than being an official employee. The reason for hiring someone on a fractional basis is so that the company can access the talent they need without facing huge cost barriers of a full time employee.
How Much Does Fractional Hiring Cost?
There is no set fraction staff cost, since it really depends on what you’re willing to spend, along with what the professional charges for their services.
However, a major benefit is that the costs of a fractional hire tend to be far more transparent than a regular employee. That’s because there are no employer contributions, taxes, benefits or other hidden overheads to consider.
What Are The Potential Challenges Of Fractional Hiring?
When someone comes into your business on a fractional basis, it’s not the same as hiring a regular employee. Namely, the individual is self-managed rather than having the same contractual obligations as your employees. For example, they aren’t bound to anything set out in your company handbook. This isn’t inherently a bad thing since a fractional role is by its very nature designed to be different, though it can require some adjustment from employers in terms of being open minded and also respecting different processes.
Fractional hires can require onboarding as well as additional team building initiatives since they don’t spend the same amount of time in your company or working alongside the rest of your employees as full time hires.
On the flip side, embracing the differences in the ways of working can bring new perspectives and insights into your company. This can actually strengthen your team as a whole.
How Do You Find And Recruit Fractional Hires?
At GoSquared, we highly recommend using a purpose-built fractional hire agency such as JamPot. Making it effortless to cherry pick the exact expertise you need on their website, using a dedicated provider can help avoid the pitfalls of hiring external talent.
Whichever avenue works for your business, we’d always recommend vetting the potential hire just as you would a regular employee. That said, the benefit of using an agency is that much of this legwork is done for you, allowing your business to literally hit the ground running with your chosen specialist.
How Do You Determine The Right Fractional Hours Or Days Per Week For A Role?
As a business, you should factor in your budget, along with how many hours you are comfortable committing to. However, if you’re new to fractional hiring, it can also be helpful to explain to the professional what your needs are, so they can advise on how many hours might be needed to achieve your goals. Since fractional hiring can be flexible, there is always the potential to scale up the amount of hours someone works for you if required.
How To Vet Fractional Hires?
Using a reputable agency such as JamPot can remove much of the risk for businesses in terms of being sure you are accessing high quality levels of talent. Whenever we’ve required more hands on deck, we have an established relationship that we not only trust but know we can count on. For us, this really removes the stress of bringing in new team members, since every new hire can just slot right in.
If you don’t plan on using a similar agency, there are a few things we can suggest to look out for. This includes conducting video interviews and having hires sign NDAs along with any other applicable documentation. Having any kind of certification as well as professional indemnity insurance are also signs you are dealing with the right people.
Can Fractional Hires Transition Into A Full Time Role?
Technically, this is possible if it’s something that works for both parties. However, it’s worth noting that fractional hires do not come into the business with an expectation of a role expansion. Instead, their agreement is that they work a set number of hours for several companies.
As fractional hiring also has a degree of flexibility, companies can also scale up or down their requirements as needed. For instance, if there is a big project to complete, extra time could be added to the fractional hire contract to fulfil any requirements, so long as the individual has the availability.
What Are The Benefits For Fractional Workers?
Those who choose to become fractional hires also do so with intent, given the job flexibility it provides. Working fractionally also gives the unique ability to work for several companies at once, which can be hugely beneficial for professional development. Fractional workers set their own rates and also choose the projects they work on based on the requests made to them. Another advantage is that by selecting the area of specialism and also the services they want to provide, fractional workers can enjoy greater job satisfaction.
Fractional Hiring: In Summary
Fractional hiring was born out of a need to offer a cost-effective way of accessing talent, as it allows companies to avoid paying for more hours than they realistically need or can afford. Swapping full time for fractional hires creates limitless potential for companies wanting to scale or solve specific challenges with the business.
With the ability to hire talent remotely for most job roles, it has never been easier or more affordable for companies to grow thanks to the power of a fractional team.
