A fractional executive is a hiring trend that allows SMBs to get VP or C-level expertise for a “fraction” of the cost. Fractional executives usually offer long term engagement working on a retained basis for an agreed-upon amount of time per month. The fractional executive may work for several companies at one time or may opt to work on a part time basis while they pursue something else in their life or partial retirement.
Why Hire a Fractional Executive?
Here are three reasons to consider hiring a fractional executive:
- You have growth objectives but don’t currently have the budget to hire a full time executive to help you get there.
- You’re too small to offer a challenging full time position to an experienced executive.
- You want leadership and experience, but need to allocate your budget to the tactical workforce to move forward.
The difference between “fractional” and “interim”
Often you will hear of a professional who has stepped into an “interim” role at the C-level. Typically this would refer to someone who may or may not end up with the job, but they hold the responsibility for that role until the permanent replacement can be found. They are expected to make decisions and lead as if they are going to become the replacement. Many times these are current employees who are a step or two down from being qualified to take the role OR it could be a board member who steps in with the best interest of the company at heard.
On the other hand, a fractional executive assumes the role as if committed to the company as he or she would be if they were full time. They participate in strategy and major decisions. They provide leadership and expertise, just simply on a part time basis. In the future, as the company grows, a fractional executive may be asked to become a full time, regular employee at that level.
As employment models continue to grow and trends develop, a flexible workforce is a need which will always be present. The fractional executive adds the kind of flexibility which was missing in the past and promises to be a vital option for growing SMBs.
To learn about hiring a fractional CFO, be sure to read our blog post here.