Hiring , Re-framing Work , Trends
November 15 | Blogs
Why Fractional Hiring Is Not Just for Startups
Estimated read time 8 min

In the past few years, the rise of flexible and remote work models has contributed to an increase in fractional hiring. Startups have embraced the model  as a way of containing costs without sacrificing expertise, particularly for executive roles.

But there’s no reason not to extend the benefits of fractional employment beyond C-level hires or startups positions. Fractional hiring can infuse value into  businesses at any stage who apply it to secure the talent required  to fill skills gaps.

Starting at C-level

 In 2015 Ron Jamieson published  Fractional Employment: The New Employment Model on LinkedIn.  He made the point that what he was calling “new’ was already established in academia and financial services but that it could and should be applied to other industries.

Jamieson referred to his exposure to that model years earlier when the company he worked for hired an experienced CFO to develop the processes needed for some complex issues on a schedule of about two days a week.

The fractional model is a win-win for businesses and employees. While the company saves the costs of a full-time hire, seasoned executives  are able to work on their own schedule. They willingly  give up full-time benefits in favor of more life in the work-life ratio, Jamieson explained.

That vision has now been realized.  It’s become increasingly common for startups to hire fractional CFOs and CMOs or other experienced professionals to fill their talent gaps in the C-suite. What is taking a bit longer for businesses to realize is that fractional hiring doesn’t have to be reserved for leadership level titles –  or for startups.

 Not just for startups  

“It’s not just for breakfast anymore.” The ad campaign for orange juice launched in the 1970s when orange juice was considered strictly a breakfast beverage. It took a few years to uproot that assumption, making people realize they can enjoy the drink throughout the day, and orange juice consumption shot up dramatically as a result.

The slogan worked because it drew attention to the fact that there is no compelling reason to limit orange juice to breakfast. Likewise, there’s no compelling reason to keep fractional hiring reserved for one particular industry or one stage of businesses. Anyone can benefit from filling skill gaps quickly and economically.

The fractional future of work

This is the future of work model that Matt Widdoes describes in a recent Forbes article, The Future Is Fractional: How Remote Work Opened Doors For Decentralized Talent. He describes fractional work as “a proven but previously under-adopted practice” that is getting more attention now as a result of the increasing use of “virtual and decentralized” work in the wake of the pandemic.

Skilled individuals are empowered by technological tools to work remotely and complete tasks on time without having to be managed on-site. That is especially true of people brought on to address tech issues that can easily be managed from their laptops.

Bringing in an outsider to supplement the team can not only fill a skills gap efficiently but infuse a new perspective on solving problems based on previous experience elsewhere. Widdoes sums it up this way:

 Put simply, fractional hiring seeks out short-term, decentralized and dedicated expertise that can achieve results in a fraction of the hours it may take a full-time (and often heavily managed) generalist to produce. If done thoughtfully, fractional hiring can save your company significant resources, including capital, time and energy, while infusing new insights and ideas into your team.

While Widdoes describes this ideal setup that accommodates fractional staff as a form of hybrid work, that’s not the way the term is commonly used. “Hybrid work” typically refers to dividing work days between home and the office.

Modern work models

Hybrid options have become increasingly common as a compromise from companies trying to lure their employees who started working from home during the pandemic back into the office at least part of the time. That is the meaning used in “Remote Work Has Opened the Door to a New Approach to Hiring” in Harvard Business Review.

 Adam Ozimek and Christopher Stanton, the authors of the article, declare that “hybrid and remote work aren’t the end of the story” and argue that it is time to embrace “the flexible or open talent model: project-based or temporary work that is staffed with workers who are not permanently attached.”

 They explain that assigning tasks to temporary remote workers makes it much easier for organizations to adapt to changes in demand, scaling up or down quickly without the delays and encumbrances involved in traditional hires. It also makes it possible to get things done without undertaking the expense of a full-time hire or contracting for consultation services.   

These benefits are often key to empowering lean startups to take off with limited resources. But even well-established businesses can gain a competitive advantage by applying a more agile approach to hiring rather than forcing everyone to fit into the traditional paradigm of work. Innovation and necessity have now combined to shift that paradigm and allow hiring to evolve.

The evolution of work

The office setup with people all coming to the same location at the same time prevailed as the paradigm of work into the beginning of this century. While business managers felt more confident about seeing their employees do their jobs, such a setup limited their hiring to those already living or willing to move to a neighborhood within commuting distance.

While companies have made a practice of hiring abroad to  save on labor costs by utilizing offshoring, that is based on an inflexible factory model of work. It is not the remote option for skilled individuals who are paid fairly, which marks the technologically enabled evolution of work today. 

When remote work became essential rather than merely a nice-to-have perk due to the pandemic and lockdown orders, managers were forced to think outside the box of traditional office setups. Some came to realize that remote employment doesn’t have to be a temporary expedient but can add value to the business at any time.

That’s what Ozimek discovered from surveys he conducted. Over half of respondents (53%) said that they “made more use of remote freelancers compared to their pre-pandemic baseline” and close to half (47%) indicated they would continue to use nontraditional hiring going forward. 

Flexibility boosts productivity

Studies on work from home (WFH) productivity conducted during the pandemic found that productivity increased. People put in more time rather than less when they didn’t have to come into the office to work.

 Part of it was that they were using their commuting time to work. Another part, likely, was being able to focus better in a quiet home office than in a workplace with an office plan or cubicles that don’t block out noise and distractions. 

In addition to the gain of productivity, businesses save costs when shifting to a distributed model of work. Not maintaining an office saves the cost of  rent, utilities, furnishings, and maintenance.

 More importantly, though, the business is liberated from the traditional model of employment that requires employees to commit to coming into the company office for 40 hours a week. That means that hiring doesn’t have to be limited to the people within commuting distance, and the company has to only consider the candidate’s skills, experience,  and capability rather than the zip code.

A smarter way to work

Making the job about driving outcomes defined by business objectives changes the game for measuring the value contributed by the employee. In a system that compensates on the basis of time alone, an employee or consultant  who takes a full day to complete a task is paid more for that task than the one who tackles it more efficiently and finishes it in three hours.

From the point of view of the business value, the completed task is not worth any more for taking up more work hours. If anything, there is greater value in making the task process more efficient.

When assigning work to fractional hires, it’s possible to reward such efficiency by linking compensation to defined tasks tied to objectives rather than paying for hours alone. That works particularly well for goals that are broken down into objectives for the week or month. Achieving that kind of efficient workflow demands a commitment on both sides to clear and open communication and respect for the particular expertise that each one brings to the table.

The stakeholder has a better understanding of the larger business context – the what and why of the goals. The experience of the engineer or admin with technological tools gives them insight into what they can and cannot do on their own, which integrations will deliver the designed outcomes, and how long it will take it to achieve – the how and when of the goals.

The key to doing more with less

Now it’s possible to gain input from an expert for a fraction of the cost of a full-time hire. As pressures from the economy force many businesses to do more with less, they need to take a page out of the startup playbook. By taking on fractional hires to fill their skills gaps, they can meet their business needs efficiently and economically. 

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