Scaling without full-time headcount

Whether you’re a startup founder or you’re running a medium-sized business, you will need to figure out when and how to scale. Even at The Fractional Hub, we recently spent a lot of time ‘umming’ and ‘ahhing’ about the next step in our growth. We ultimately ended up bringing on our fourth team member, the wonderful Evan Patterson.

For more established businesses, hiring new employees and scaling effectively is a significant challenge. Traditional hiring models come with steep costs:

• Worker benefits 
• Office space
• Training
• Turnover

This can lead to substantial overheads. For businesses that need to be flexible and adaptive, hiring more employees might not always be a good idea.

Today, modern businesses are choosing fractional talent as the solution. Businesses can hire fractional talent to get the exact expertise they need without the commitment that comes with full-time hiring. 

In this blog, we’re going to look at why you should consider fractional professionals as a business owner or HR leader, and how you can position the benefits of fractional work as a fractional pro yourself.

Let’s get stuck in!

The real cost of full-time vs. fractional talent

On the surface level, you might be tempted to look at the average salary for a traditional full-time employee and recoil at the day rates charged by a freelancer or fractional professional. However, pay is just one part of the bigger picture. 

There are plenty of other factors you need to factor in to get a true understanding of the cost of hiring:

• Benefits: Full-time work typically requires the employer to provide paid leave, pension contributions, healthcare benefits, and more. This can cost an employer upwards of 30% on top of the employee’s salary (SalaryCube), which means a fractional employee can be more cost effective.

• Workspace costs: While it’s possible to have a remote full-time workforce, traditional employment often requires physical office space, not to mention any equipment the employees will need (company laptops, for example). Furnishing an office alone can cost thousands of dollars per employee (ICTSD).

• Training and onboarding: Companies have to spend time, money and energy training up employees to enable them to succeed in their roles. Training can cost up to $1,000 per employee per year for small-to-medium-sized businesses (LearnExperts). Fractional professionals are usually fractional because they’re already well-versed and skilled in their specific role or niche, allowing them to hit the ground running.

• Productivity delays: Full-time employees will normally take a while to become autonomous and productive in their role, impacting others in the business. In most white-collar jobs, employees can take months to reach full productivity (MIT Sloan Management Review). As mentioned in the previous bullet point, the expertise that fractional talent comes with can shorten productivity delays.
• Turnover risk: When full-time employees leave, employers spend time and money replacing them (and compounding the cost of training, getting up to speed, etc.). For example, for companies in the US, the average cost of replacing a full-time employee is $4,700 (Society for Human Resource Management), while a mid-level manager can cost tens of thousands to replace. Certainly not chump change, and this really adds up over time. Fractional talent offers more flexibility for onboarding and cancellation terms.

Scaling smart: Identifying growth needs vs. system needs

Many leaders often mistake hiring more people for scaling a business. Scaling a business is more about scaling a business’s output through improving productivity, which may or may not include increasing headcount. It is about understanding what requires human expertise vs. what can be systemised or automated:

• Core leadership roles: Long-term strategic functions requiring full-time leadership, such as a CEO or Managing Director
• Specialised expertise: Skills your business requires on-demand or in short bursts, such as marketing or legal expertise
• Systemisable processes: Tasks that you can automate or standardise, such as reporting or support workflows

Organisations should determine whether a business need requires focused expertise or an investment into better operational systems before defaulting to full-time hiring. It can very well be both!

If you can identify the areas of your business where fractional talent would do the trick, there’s potential to save a bunch of money!

Building your fractional dream team

If you decide that fractional hiring is the right solution for you (good call, by the way), it’s important that you don’t just think of it as filling the gaps in your business strategy. Fractional hiring is about finding the right talent that will seamlessly integrate into your business.

Here are our top tips for finding the right fractional professionals for you:

• Industry expertise and proven results: Look for professionals with a track record of delivering impact in what matters most to you
• Flexibility and adaptability: Fractional pros need to deal with varied work environments and shifting needs
• Structured agreements: Make sure you agree on expectations early on, in terms of what the fractional hire will deliver, how you’ll communicate, and more
• Trial projects: Before committing long-term, try working with a fractional hire on a small project to see if they’re a good fit for your team
• Watch for red flags: Lack of accountability, unclear scope, or difficulty integrating into existing workflows can be a sign of misalignment

Working with fractional professionals

Fractional teams are often remote or hybrid, requiring businesses to adapt their management style for seamless collaboration. For businesses that are used to working with everyone sharing an office, this will require different approaches and tools to work effectively with a distributed workforce.

If you’ve got fractional professionals in your team, you’ll need to think about the following:

• Be clear on ownership; fractional professionals need well-defined goals and objectives, but you also need to trust them to handle things in their area of expertise
• On a related note, you’ll want to define KPIs and deliverables up front to make sure everyone’s singing from the same hymn sheet
• Work to a schedule; weekly check-ins or monthly strategy sessions can help to ensure that you’re aligned and able to adapt as required
• Using collaboration tools for remote team management can help to streamline workflows and ensure that things don’t slip through the cracks, especially when working asynchronously

Measuring success and ROI in fractional hiring

So you’ve hired a fractional pro and set them to work solving your problems. This is all well and good, but how can you actually determine whether your fractional hire is worth the money?

There are a few simple things you can look at to see if your fractional team are delivering the results you need:

• Key business growth metrics, such as revenue or signups
• How long it’s taking to see improvements
• Savings compared to the equivalent cost of full-time employees

Connect with the Community: We’d love to hear your success stories in fractional work, whether that’s a great fractional pro you’ve worked with, or how you’ve driven growth in a fractional engagement.

Why scaling smart beats scaling fast

When businesses aim for rapid expansion, this can come at the expense (pardon the pun) of cost-effective hiring. If your business brings on full-time employees before properly evaluating your growth strategies and needs, this can be a costly mistake.

Fractional hiring, on the other hand, allows you to stay agile by scaling up and down as required, minimising financial risks, all while getting the exact expertise you need without the need for long-term commitment.

What’s your experience?

One of the main reasons we started our community was to share valuable insights and stories about fractional work, so we want to hear from you:

• Have you leveraged fractional professionals in your business?
• What challenges have you faced when scaling?
• How have you helped businesses to scale as a fractional professional?

Share your thoughts in the community, and sign up for a free account if you haven’t already!

And if you’re serious about positioning yourself as a strategic fractional partner, that’s what our The Fractional Hub Plus community is there for. Each Plus member gets access to valuable discussions, masterclasses, and access to The Fractional Career Blueprint digital course. 

If you’ve got any questions, please comment below or email us at [email protected].