What Types of Companies Benefit Most From Hiring Fractional Executives and Other Fractional Talent?

These types of companies (with the exception of those going through a transition), are all small companies, and this is not a coincidence. There are two primary reasons for hiring fractional talent, 1) when you don’t have the need for a full-time hire, or 2) when you don’t have the budget for a full-time hire. (Read more about why you should hire a fractional leader here).

These constraints tend to be felt most by small companies, therefore fractional hiring is mostly done by early-stage startups, small businesses, and nonprofits.

Fractional Jobs has worked with 100+ companies to help them hire fractional talent, and 100% of those companies fall into one of these four buckets.

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Fractional Hiring for Early Stage Startups

Startups are a huge adopter of fractional hiring. They tend to be early adopters in general, including of trends like remote work.

Naturally, startups are constrained by budget. They might desperately want to hire a full-time CTO, but simply cannot afford it. A Fractional CTO becomes a very attractive option, because it allows the startup to get access to the experience they need, but without running out of money.

Startups often find themselves searching for product-market fit. While they iterate on their product, they likely still want to get in front of customers, but aren’t ready to slam the gas pedal to the maximum. A full-time CMO might just be overkill given the breadth of marketing work that needs to be done. Nonetheless, the right tailored strategy from a Fractional CMO is a hyper-efficient way to grow at a pace the product can support.

As startups grow, their fractional need will graduate to a full-time need. And they tend to grow fast, too, so a startup’s Fractional Head of People might spend 9 months working with the company before transitioning out and finding a full-time Head of People to replace themselves.

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Fractional Hiring for Small Businesses

Small businesses, too, love to hire fractional executives. They tend to optimize for steady, predictable growth, and they try to run their business efficiently, with an eye towards profit.

SMBs tend to operate with tight margins and strong cost discipline. They are often willing to invest in senior help, but only if the time commitment and cost make sense given the value they get. Fractional roles give SMBs access to seasoned operators who can modernize outdated processes, introduce best practices, or mentor younger full-time staff, all without the long-term cost burden of a full-time executive.

Even beyond budget, many functions like Finance or HR just don’t require a full-time executive given the size of the company.

Small businesses often hire Fractional CFOs, Fractional Heads of HR, Fractional COOs, Fractional Heads of IT, and more for these reasons.

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Fractional Hiring for Nonprofits

Nonprofits are generally budget-constrained. Every dollar matters and spend needs to be highly justified. While they tend to be slower to adopt new ways of working, the cost savings of hiring a fractional exec are so undeniable that it’s becoming an increasingly popular way for nonprofits to get access to the talent they need.

Nonprofits often hire Fractional Operations Leaders to run the day-to-day. They’ll hire Fractional CFOs to own the financials.

Especially small nonprofits often hire a Fractional Head of Development (an industry term for fundraising) that can help the nonprofit unlock huge new sources of funding, like large donors, government grants, or other types of partnerships.

Nonprofits often struggle to attract talent because their compensation packages are usually smaller than the private sector. But one benefit of hiring a fractional exec is that, since the fractional exec typically has multiple clients, taking on an engagement for a nonprofit they care about doesn’t impact their earning potential as much. They have clients from the private sector that make up for it.

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Fractional Hiring for Companies in Transition

Fractional hiring can also be helpful for companies going through a transition, regardless of their company size.

The most common types of transitions where fractional hiring could make sense are:

• A suddenly departing full-time executive
• A company exploring a totally new business opportunity
• A company downsizing

A departing executive leaves an immediate leadership gap. Sure, sometimes another executive can fill the gap, or someone more junior on the team can step up. But not every company has this luxury. Instead, hiring a fractional exec, even for half-time, can be a major pressure release that helps the company stabilize quickly. The fractional exec might even help you hire the right full-time replacement.

Similar logic is true for a company downsizing, where there’s a need for stabilizing the team, and where budget and flexibility are especially important (given the likely reasons for the downsizing in the first place).

On a more positive note, companies that are exploring totally new opportunities increasingly look towards fractional leadership for help. A company might hire a Fractional Head of Product to lead a skunkworks project to build out a whole new type of product. Or they might hire a Fractional CMO to lead their expansion into the US market. If a company has a hunch that a partnerships strategy might prove fruitful, they might hire a Fractional Head of Partnerships to find out for sure.

In all of these examples, the company needs someone senior to “validate” a business opportunity, but they’re not ready to commit to a full-time leadership hire. Perhaps, once validated, they might be.

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