How to Hire a Fractional Leader

I’m Taylor - the founder of fractionaljobs.io. We help companies reach and recruit senior fractional talent directly.

I’m also a Fractional Head of Product, specializing in early-stage startups. In my practice, I work with 3 startups at a time for about 10 hrs/week each.

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How to Hire a Fractional Leader

Congrats on completing the hardest part of hiring a fractional leader - realizing the potential need for one in the first place. (If you’re still not sure why you should hire fractional, read this first).

This playbook provides companies with a detailed guide on how to hire a fractional employee, from zero to kickoff. If you’ve made the decision to explore a fractional hire for your company, but you don’t quite know the steps to execute a hire, this is the post for you.

We’ll walk through:

1. Assessing Your Need - What type of fractional do you need?
2. Targeting the Right Candidates - How do you find and attract the right fractionals for the job?
3. Interviewing Best Practices - What’s the right way to evaluate fractionals?
4. Compensation Expectations - How much do fractionals cost, and why?
5. Signing a Contract - A few tips to consider including in your contract

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Assessing the Need

Companies can evaluate the type of fractional hire they need across four categories:

• Function area
• Rough Time Commitment
• Seniority
• Background/experiences

Evaluating the right function area (Engineering, Marketing, Sales, Analytics, etc.) is fairly straightforward and is the same exercise for making a full-time hire, so we won’t spend much time there.

Rough Time Commitment

A typical fractional engagement might be for 2, 5, 10, or 20 hours a week.

Keep in mind these hours are meant as a guide to understand rough commitment level, it doesn’t mean your fractional hire will work exactly these hours every week (same as how a full-time employee doesn't work exactly 40 hours every week).

• 2 hours - A closely involved advisor providing weekly check-ins, document reviews, comms via Slack/email, and makes introductions
• 5 hours - A strategic-only leader that guides the direction for their function area (e.g. Sales), can manage a very small team, can make hires
• 10 hours - A strategic leader who can manage a team or be hands-on with execution work, and collaborates regularly with other leaders on the team
• 20 hours - An involved leader setting direction, managing a team and/or doing execution work as needed. Their output will be hard to distinguish from the average full-time hire

So, what is your company’s exact need? About how many hours per week might the work require? This spectrum is the essence of fractional work (and where the word “fractional” comes from). Enjoy the newfound opportunity to choose the perfect engagement size.

Seniority

Fractional employees by definition are all experts in their field. They typically have leadership or management experience, too. They are former c-suite execs, VPs or Directors in charge of a department, former founders, or even very senior-level ICs.

Which is right for you? It depends on the ideal mix you’re after of strategic and advisory work vs. hands-on and tactical work.

A c-suite sales executive with 20 years CRO experience is going to be a very different hire compared to a Director of Sales. Both fractional employees, very different levels of seniority, price points, and types of value-add.

Background & Experience

A huge benefit of hiring fractional is the access to people with a set of experiences you’d otherwise never be able to hire. Take advantage of this by hunting for the experiences that feel uniquely beneficial to your company.

You can bring someone in with the right rolodex of industry relationships, or expert knowledge of your exact technical stack, or is a specialist at your stage of company.

Many fractionals actually make this easy for you, because they often position themselves in distinct ways. Some examples might be:

• Functional expert —> “Fractional B2B Demand-Gen Leader”
• Industry expert —> “Climate-tech-focused Fractional Head of Product”
• Stage expert —> “Early-stage Fractional CTO”

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These four categories - function area, time commitment, seniority, and background, should help you picture the ideal fractional profile in your mind.

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Targeting the Right Candidates

With that picture-perfect candidate in mind, the next step is to find them. To attract the right candidates, the two rules to follow are 1) go where the fractionals already are, and 2) talk their language to show you’re serious.

There is one exception to rule #1 though, and it’s to use your network.

Use Your Network

As is the case when making a full-time hire, or in the dating world, or when making a restaurant reservation, a recommendation from someone you personally trust is gold.

When making a fractional hire, see if someone you trust personally can connect you with the right fractional leader, ideally someone they’ve worked with before.

If you can make the perfect hire just by leveraging your network, you can save time recruiting and evaluating.

But as is also the case in hiring, dating, and restaurants, your network will typically only get you so far. Most companies need to find additional ways to build a candidate pool.

Typical Recruiting Channels Won’t Work

Going to Linkedin Jobs, Angellist/Wellfound, or a recruiting agency can produce great results for a full-time hire but will come up short for a fractional hire.

These channels have networks of candidates that are looking for full-time work. They’ll be much less helpful targeting experienced fractionals that have room for more fractional work.

You may next think of options like Upwork, that are more geared towards shorter-duration, contract-based work. Great for hiring a virtual assistant, good luck hiring a Fractional CMO.

Freelance sites like Toptal can be just what you need for hiring exceptional freelance talent. But freelance is not fractional (fractionals are more senior). Fractionals adopt the “fractional” title to differentiate our work from freelance work, the last place you’ll find us is browsing freelance gigs.

To find the best fractional talent, you need to go to where the fractionals are. You need to go fishing in the fractional pond. (Now the hero image is starting to make more sense... huh?)

How to Target Fractionals

This is where we come in. Fractional Jobs (the site you’re reading this on) is purpose-built to help companies reach exclusively fractional talent.

We cast a wide net in our network via our job board, our newsletter, and the sub-communities we’re tapped into. And we pair that with personalized outreach to candidates in our network that are exceptionally good fits. Then, we screen all the interested candidates, sending hirers just the qualified ones. Enough pitching though. If you want to learn more, feel free to get in touch.

Craft an Attractive Job Description

Whether you’re tapping into your network or branching outside of it, you’ll likely want to write up a job description for the role. This helps you clarify to others, and also clarify to yourself, exactly what you’re looking for.

We’ve all read and written job descriptions before, but with a fractional hire, there are a few additional topics you’ll want to include.

• About what time commitment are you looking for?
• What compensation range are you looking to pay? Bonus points if you describe compensation as a monthly rate, as most fractionals tend to charge a monthly retainer
• Are you comfortable with “moonlighting”, i.e. doing most of their work on nights and weekends? This is typical for folks that do fractional work on top of a full-time job
• Is there an opportunity for this role to convert to a full-time role eventually?
• Assuming a remote role, are there any time zone restrictions?

By including these topics, you’re not only describing your need, you are also demonstrating to fractional candidates that you understand what fractional is all about. You’re speaking their language, and it will attract the best fractionals.

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Interviewing Best Practices

An interview process for a fractional hire is generally shorter and more direct than a full-time hire. In fact, it feels wrong to even use the term “interview” because this process will not feel like one.

Tip #1: Start Quickly

A fractional engagement sometimes starts with a trial, and when the trial goes well, you’ll typically agree to something like a monthly retainer. Fractionals are also independent contractors, not W2 employees. For these reasons and more, if the relationship is not working, it can end very easily and quickly.

Because it can end quickly, it can therefore start more quickly too. Do you see why? Since the cost of a poor fit is reduced, there is less need for a lengthy, complex interview process designed to make sure the candidate is perfect before the work begins.

And after all, we know that interviewing is generally a poor way to determine fit and output anyway. Fractional hiring is more conducive to assessing fit continuously vs. all up front during an interview process.

So don't be afraid to start an engagement quickly.

Tip #2: A Typical Process

An interview evaluation process for a fractional candidate will take different forms based on the role, the company size, the type of engagement, and more. However, a good baseline might look something like this:

• Intro call [30min] - Describe the company need, learn about the candidate’s capabilities. In this call both sides are selling themselves
• Deep dive [30 - 60min] - A more detailed walkthrough of the company needs, giving the candidate enough information to put together a proposal
• Other Stakeholders - Optionally, if there are other stakeholders that should meet the candidate, this is the time to do it. Others on the leadership team, direct reports that the fractional candidate would be managing, etc.
• Proposal - Based on the first two calls + stakeholder conversations, the fractional candidate should have enough information to put together a proposal including a scope of work, budget, etc. This is typically sent over email or narrated over a call
• Contract - Sign an Independent Contractor agreement, inclusive of any key points discussed in the proposal

Tip #3: Ask About Their Fractional Practice

Aside from evaluating fractional candidates on their core skills and fit for your company, it’s helpful to also learn about their fractional practice.

• “How do you typically bill?” - Monthly retainer is most common, some fractionals do hourly, and others do fixed scope of works
• “How many clients do you typically work with at once?” - This is one of several ways to understand the type of fractional work they do. 10 clients, and they’re surely doing advisory or high-level strategy work only. 2 clients, and they’re typically getting quite involved in each business
• “What does ending an engagement look like?” - Make sure you’re aligned here. How much notice is expected from either party? If desired, will the fractional leader help hire their replacement?

Tip #4: Consider a Trial

A paid trial is a great way to de-risk a relationship, and can be beneficial for both sides. A trial might be something like a week or a month.

Depending on the type of work being done, many fractionals may choose to use a trial as a fixed scope “strategy build” of sorts, where they put together an in-depth plan of action for their area of the business.

Unlike a full-time hire, a fractional employee is typically not quitting a full-time job to join your company. They already have capacity for an additional client, and so a trial typically does not have a massive opportunity cost. Take advantage!

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Compensation Expectations

A glorious truth about hiring a fractional leader is that companies save money by doing it. Yes, obviously one important cost saver is that you’re only paying for a fraction of someone’s time. But there are several other ways hiring fractional is cheaper than a full-time employee.

• You don’t pay payroll tax, often 10 - 15% on top of a full-time employee’s base salary
• You don’t pay for employee benefits, including healthcare or 401k matching
• You’re not expected to pay bonuses (commission-roles aside), nor give out equity
• If a fractional takes a vacation, they aren’t billing you for that time either

The cost of a fractional leader is simply their monthly retainer.

How Much Do Fractional Leaders Cost?

Imagine you’re looking to hire a Fractional CTO. Someone with 10 years of experience, who can both code but also manage a team of two full-time engineers. If this was a full-time hire, it might run $200,000 in base salary + a bonus + equity + benefits, etc.

An easy rule of thumb is to start with what you expect the base salary to be for an equivalent full-time role. In our example, that’s $200,000.

To calculate the approximate expected hourly rate of this person, just remove three 0’s, and add “per hour” to the end. $200,000 —>  $200 / hr.

An approx. monthly retainer would be the “hourly rate” x “hours / week” x “weeks / month” (4.35). Or, just look at our fancy chart.

The actual rate may be lower or higher than this based on several factors, but this is a reasonable heuristic.

Notice how the rule of thumb is NOT to take the full-time salary and simply divide it by something like 4 because the fractional is working 1/4 time. You will not find successful fractionals at these price points.

To better understand the economics of fractional work, read “How Much Money Can I Make as a Fractional Employee?”

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Signing a Contract

We’ve reached the final step towards onboarding a fractional leader. And we’ll save the legalese for the lawyers. But it’s worth covering a few best practices regarding the contractual agreement itself. These suggestions tend to be the norm in the fractional world, but are absolutely subject to changes based on the nature of each fractional relationship.

Renewals and Cancellations

Renewals can either happen automatically, e.g. every month until cancelled, or contracts can renew with explicit agreement and a new scope of work.

Cancellations of the contract can also happen in two ways. If the contract renews automatically, it’s common to give notice to the other party of an upcoming cancellation, e.g. 14 or 30 days ahead of time.

If the contract renewal isn’t automatic, then cancellation typically happens simply by not renewing the contract.

Cancellations should always be the same for both parties. E.g. a 30-day cancellation notice means the fractional or the company must cancel 30 days in advance.

Working More or Less Than Expected

Given most contracts are on a monthly retainer and not hourly, it’s possible to run into scenarios where the expected commitment level is either being exceeded or not being met.

Small variance is expected and should balance itself out over time. But there are certainly cases where significantly more hours are put in (e.g. a big deadline), or less hours (e.g. a vacation).

Guardrails around this can be put in the contract, though it doesn’t have to be. Common guardrails might be:

• An agreed upon hourly rate if the work consistently exceeds expectation
• A pro-rated monthly retainer to account for vacation or other off time

What doesn’t go in the contract but should still be talked about?

There are certain expectations that typically don’t make it’s way into the contract but are nonetheless important to be aligned on

• Will the fractional employee be working throughout the work week, or only on set days or time frames?
• Are there any restrictions around when meetings should or should not be scheduled?
• Do the company norms around Slack & email communication match the fractional’s own policies around availability?

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After contract signing, you've successfully made a fractional hire. Congrats! Now, the real work begins. And we'll save those best practices for another playbook.

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If you follow these steps to hire a fractional leader for your company, you will be among the top 10% of companies hiring fractional. And as a result, you’re likely to find the best fractional talent.

The Fractional Jobs network makes it easy to target the right fractional leaders, but we’re also a resource to you through every step of the fractional hiring process. If you want any help or guidance on this process, just reach out.

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FAQs

Are fractional hires only senior-level leaders or can I hire a junior fractional employee too?

Fractional work is defined as being performed by experts in their field. This is, in part, used to differentiate the type of work from freelance work. Freelance work is typically done by junior or mid-level employees, that perform the tasks they are given, and are typically paid by the project.

If you’re not sure how to market your role, (fractional or freelance), and want some guidance, feel free to reach out.

At the end of the day you’re welcome to call any role you want whatever you want, but it probably makes sense to align with the broader community, otherwise you risk attracting the wrong candidates.

Can I ask my fractional hire to report their hours?

You can certainly ask them, if it’s important to you. But it doesn’t mean they will. Fractional employees expect to be treated like full-time employees, with the only exception that they are part-time. Just as it’s unlikely a full-time employee keeps meticulous track of their hours, the same applies to fractional employees.

Are fractionals paid before or after the work (prepayment or postpayment)?‍

A service provider can either be paid up front for their services, or afterwards. There is no fractional best practice here, at least not at the moment. Some fractionals expect payment after services (which is also how full-time employees are paid), while others expect prepayment (which is typical when hiring an agency).

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