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May 23, 2024

What Is a Fractional Executive? Guide to Hiring an Ace Interim C-level

Need executive-level expertise on a budget? Whether you’re looking for help with high-level strategic tasks or an interim CEO to smooth a succession, fractional hiring can help business owners tap in-demand skills as needed – even at the c-level.

Fractional hiring has been on a steady rise since the pandemic. And according to Breezy’s latest Hiring Challenges Survey, it’s more than a temporary stopgap. 

Nearly a quarter of employers are already tapping into contract-based talent as they navigate ongoing economic shifts and market changes.

Whether you’re dipping your toes into the fractional talent pool or diving straight in with a key executive hire, one thing is clear: the fractional talent market is gaining momentum. Even in the corner office.

What is a fractional executive?

Fractional executives are experienced c-suiters who work in an as-needed capacity. They occupy roles like CEO, CFO, CTO, CIO, CMO and CSO, offering targeted support and a fresh perspective in a short-term, contract-based setup.

Businesses may use interim executives to fill a temporary leadership gap or hire a project-based executive for guidance at key moments in a business’s growth journey. They may work a few hours each day or a few days each week and often assist multiple companies simultaneously.

Compensation for fractional executive roles is typically project-based or charged on a monthly basis. Fractional work agreements can be a more cost-effective option compared to a full-time hire, as these roles do not require the same level of time, compensation, and benefits.

Full-time executive vs fractional executive

Full-time executives offer dedicated direction, leadership skills and expertise on a salary – but salaried leaders aren’t the only option.

Fractional executives are a valuable alternative for growing companies in need of top-shelf talent but wanting to hire them at a fraction of the cost. Offering shorter-term contracts and flexible rates, these part-time execs help businesses access c-level support without the full-time commitment.

And they’re not just consultants. Fractional execs have the power to set and execute strategy, depending on your needs.

“As a fractional CMO or COO, I often receive an @company email, evaluate teams, audit systems, and coach up (or out) employees,” explains Aimee Schuster, an experienced fractional exec and founder of Bandwidth Strategy. “I have a handle on and drive actions toward the overall business objectives. I'm also often a sounding board and ear to the CEO, who may not want to discuss certain frustrations with C-suite colleagues directly.”

Here are some of the many benefits of hiring a fractional executive:

  • Expertise at a "fraction" of the cost. C-suite salaries are more expensive than ever. But when you hire a fractional exec, you’re able to tap into their expertise as needed. This allows you to access a wealth of experience without committing to the long-term expense of hiring a full-time employee.
  • More flexibility. Fractional executives provide more flexibility for companies that need to adjust staffing levels based on workload and budget. Experienced executives can be hired for short-term contracts, ranging from a few days to several years. If your fractional hire is no longer a good fit for the company, replacement costs could be as low as a few hundred bucks versus a whopping 213% of a CEO’s annual salary.
  • Access to a larger talent pool. Fractional professionals are highly experienced and talented individuals who, for whatever reason, aren’t interested in full-time employment. Whether you need an ace marketing VP or an interim CEO, fractional hiring gives you the ability to tap into a pool of expertise that is both wide and deep.
  • Reduced risk. Fractional executive services can also help you reduce the risk of making a bad hire. Contract terms are usually at least three months and come with a 30-day cancellation policy. This allows employers to assess their performance and make changes if necessary.

Balancing the insider-outsider perspective, fractional executives offer specialized support for company-wide initiatives. But where do you find them?

5 steps to hire the right fractional leader for your business

Short-term hiring isn't just for temp workers. With a super-specialized skill set and a track record of success, fractional leaders can help take your business to the next level. 

But connecting with these pros isn’t as simple as posting your open role to Indeed and calling it a day. Here are five practical steps to connect with the right fractional talent.

1. Assess your needs

Before you jump on the fractional hiring train, consider your day-to-day needs for fractional executive work.

If you need someone available 24/7, fractional leadership probably isn’t right for you. But if you’re open to new perspectives and scalable support, part-time executives can offer unbiased feedback as you scale your business.

Fractional executive contracts can be adapted to fit any business. However, they typically work best in a few key scenarios. Fractional leadership might be right for your business if you’re:

  • In need of specialized, hard-to-find skills
  • Transitioning to new ownership
  • Don't have the budget for full-time executives

Fractional leadership often works best for early-stage startups or businesses in transition. When you're growing quickly or changing your business structure, you need to make sure the right people are focusing on the right tasks.

“As a full-time executive, I found that 80% of my time was spent on tasks that could be done by more junior staff, given the right guidance,” Adi Vaxman, the founder and CEO of Sheba Consulting, told Entrepreneur. “This observation reinforced my belief that many companies don't necessarily need a full-time executive, as the role doesn't always warrant constant high-level attention.”

A fractional approach ensures that you’re not paying top dollar for busywork.

2. Build a list of well-defined job requirements

Because a fractional leader only dedicates a set number of hours to your operations, you need clearly defined responsibilities to optimize your results.

Let’s say you need a chief marketing officer (CMO) to revamp your brand strategy. Instead of falling back on vague goals like “we need marketing help,” dig in and define your needs in the job posting

Ask yourself:

  • Do I need short-term help with a single campaign? Or overarching marketing strategies I can expand on long-term?
  • Do I need help executing a strategy or tracking results?
  • Do I need help building up my internal team?

If you want your contract to be more execution-based, you need to have a clear goal and strategy in place before hiring. But if you want to hire someone to help you set the strategy, clarify that in the job posting.

3. Focus on experience

You already have in-house staff who know your product or service inside and out. What you’re lacking is an external expert who can take your company to the next level.

That’s where fractional executives come in.

While full-time executives are experts in their niche, fractional executives have been exposed to a range of different systems, processes, and business structures – meaning you get both depth and breadth of experience.

When hiring a fractional leader, focus on finding a candidate whose experience matches your needs. 

Look for candidates with:

  • A successful track record in your industry
  • Positive references from past clients 
  • Connections with important service providers
  • A commitment to fractional work as a career rather than a temporary job

When you put in the effort to hire the right person, it saves you time down the line.

Take it from Anne, an entrepreneur and web publisher who transformed her business with the help of a fractional chief operating officer (COO).

“Managing [organizational structures] effectively is hard for someone with an entrepreneurial mindset but no previous high-level management experience or skills…[but] having a fractional COO helped me bridge that gap, allowing for more growth and stability,” she explains

Even though her company is “way too small” to afford a full-time COO, Anne was able to access the help she needed through a high-impact fractional exec.

4. Don’t overlook leadership style

Your best-fit fractional executive will share your passion, helping you build a dynamic leadership team as you progress towards your biggest, hairiest goals.

But to keep the partnership effective, you need to make sure everyone’s on the same page.

Communication is critical in a fractional setup so make sure you learn their cadence, style and preferred methods. And don’t forget to make your own expectations crystal clear.

To establish clear communication with fractional executives, you need to:

  • Define the role clearly, and set the bar for success early on
  • Keep an eye out for candidates who are responsive and proactive
  • Schedule a consultation before you make the hire to get a sense of their work and leadership style
  • Document agreements and set strategies in writing

After you make the hire, schedule regular meetings so you can touch base and adjust course as needed.

5. Set clear compensation and KPIs

Fractional executives are paid on a project basis, and compensation varies based on factors such as industry, experience, and company stage. Usually, this range is around $250-450 per hour. If you need daily assistance, that can add up to at least $10,000 per month.

That’s why it’s important to keep your budget needs in mind when sourcing fractional candidates. To determine a fair and appropriate compensation structure, you need an idea of the project scope.

Define your needs and establish clear metrics by:

  • Identifying the key performance indicators (KPIs) that will measure the success of the project
  • Communicating these metrics clearly to the fractional executive team
  • Establishing a reporting process that will allow you to track progress toward these goals

With the right set of responsibilities and the right metrics to measure their progress, you can make sure your fractional hire is well worth the investment.

Get the best talent in your corner

Whether you’re growing your small business, easing a transition, or addressing critical growth challenges, a fractional executive with targeted expertise might be the puzzle piece you’ve been missing.

Luckily, Breezy helps you connect with fractional experts faster. With instant job posting to niche and premium job boards, you can connect with experienced professionals with specialized skills in record time.

For more tips, templates and guides, check out our free hiring resources. Or, start finding your next fractional rockstar right now with a free 14-day trial of Breezy HR.