The fractional leader has emerged in recent years to help growing companies fulfill high-level duties that often cannot be performed without overextending existing executives. This approach addresses essential tasks but doesn’t require expensive investments of money or time, both of which are at a premium in many growing businesses.
Retaining fractional executives brings valuable experience and guidance to companies that would otherwise find these attributes inaccessible. If your company’s gross annual sales exceed $3 million but are less than $100 million, or if you are considering a significant growth strategy, a major integration, or expansion, then fractional employment could be a potential solution to fill your leadership void.
Fractional Hiring Defined
Originating in financial institutions and academia, the fractional employee is one who divides his or her work week among multiple employers. Usually, the time is defined in discrete terms, such as two days at one company and three days at another. The fractional employee may be self-employed or work for an agency that specializes in offering fractional services to a particular industry.
Fractional employment is not freelance work; the employment is not contingent on a single project or campaign. It is ongoing like a typical employer/employee relationship. Fractional employment also differs slightly from part-time work in that the hours are both regular and regularly defined, although occasionally an organization will arrange for a fractional employee to work on a retainer-style model. Fractional employees generally forego benefits such as medical and dental, but in exchange, they receive greater flexibility over work/life balance and maintain the pace of life they prefer.
The Benefits of Fractional Hiring
Fractional hiring has become a growing trend, particularly for growing businesses that would ordinarily fall behind without seasoned, experienced help. So, how could fractional hiring help your organization?
As opposed to a project-based or short-term hire, a fractional hire will likely develop a personal and emotional investment in the organization.
Because the fractional hire continues to interact with team members, loyalty emerges that is not apparent from other kinds of non-traditional hires. Instead of committing to only a single issue or concern of a business, a fractional executive is encouraged to identify opportunities across multiple parts of an enterprise. In other words, fractional hires do not have the campaign-centered myopia that is inherent in a short-term hiring scenario.
A Suite of Opportunities
A fractional hire could serve as an interim executive as an organization searches for a full-time C-suite executive. They provide a low-risk alternative that saves a company recruiting costs and time spent interviewing and researching candidates for such an immediate vacancy.
Fractional leaders will also advise on or even undertake initiatives, conduct workshops and seminars, provide valuable mentoring to lower-level staffers, and conduct audits. Furthermore, they can establish and monitor reporting systems, act as a liaison between regulators or other third parties and ownership, reduce overall expenses, and provide invaluable free time and peace of mind to stressed executives.
Accounting for Good Taste
Two particular areas where fractional leadership makes a lot of sense are accounting and finance. Because these roles are generally the same across industries, they can make for ideal fractional hires.
No successful businessperson would debate the value that accurate accounting provides for an organization, but most growing businesses cannot realistically prop up a full financial team. The all-too-common solution is often an overmatched bookkeeper or part-time employee without a real investment in the company, which risks damaging financial errors or even fraudulent activity.
Fractional hires can provide accounting needs, so essential activities like profit-and-loss statements, balance sheets, and monthly reporting are all completed timely and efficiently. This provides the data necessary to make important business decisions, and can also provide a stable financial backbone to your growing company.
An Efficient Decision
Fractional hires, or “executives-as-a-service,” cannot by nature exceed budgets and they cannot typically act independently of outside approval.
As a business owner, you receive complete, defined deliverables and a real return on your investment, without having to deal with political machinations or infighting. What’s not to like about a fresh pair of eyes, an informed and trusted mind, and expedient, high-quality results?
Fitting the Role
If fractional hiring has piqued your interest, you may be wondering what to look for in your future candidates. Who makes an excellent fractional leader?
The answer: someone with the motivation and experience to step directly into a leadership role and support your goals.
The ideal fractional leader has high emotional intelligence and understands the intricacies of interpersonal development. Usually, they have already worked as a senior manager or executive and can lean on that background while quickly adapting to the new landscape. These will all be critical skills to look out for during the fractional hiring process at your organization.
Making a Difference
Fractional hires don’t just sound good on paper – they can be a catalyst for growth at your company. With that in mind, maybe it’s time your business considered fractional hiring to reach your business goals.
How would fractional leadership help your growing business? Tell us why in the comments section below.
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