HUMANS ARE AWESOME
Written by: Hanadi El Sayyed
It goes without saying, but recruitment can be a challenge for most (if not all) businesses. From finding the best talent to ensuring that prospective hires match your culture, talent acquisition, despite all the challenges it faces today in attracting the right fit, is an essential part of accomplishing most business goals irrespective of the company size.
But there is a solution that is often overlooked by talent acquisition and the HR community alike. This solution can help startups as well as large organizations not only with their talent needs but also in terms of HR integrating it as a new model in their overall workforce planning strategy. It is called fractional employment, and it can be just the thing your company needs to attract and afford stellar talent.
In this three-part article, we want to take a deep dive into fractional employment. In this Part One, we will specifically explore what fractional work is and why companies should leverage this model in their businesses. In Part Two, we will dive into why fractional employment is particularly attractive for startups. Finally, in Part Three, we will tackle fractional employment as a new employment model for HR to adopt, while considering the impact on workforce planning and overall policies. At the end of this series, you will have a much greater understanding of fractional employment and whether it is an excellent option for your business.
If you haven’t yet heard of fractional employment (also called fractional recruiting), it is pretty self-explanatory. Originating in financial institutions and academia, fractional employment is a situation where an employee divides their time among different organizations. The arrangement can vary, from the employee working several days at one company and other days at another (or several others) to the employee working in several places during the same day. The general practice is usually fractional employees often working at a specific company for the entire day for several agreed days during their workweek. Typically, companies take on fractional employees either directly on a one-on-one basis or by subcontracting them through a fractional employment agency.
While you may initially equate fractional employment with part-time employment or freelance employment, there are some key differences. A key difference between fractional employment, part-time or freelance work is that fractional employment tends not to be project-based and is more ongoing in terms of the services provided by the fractional worker to a company. Work time tends to be more regular than part-time: a fractional CFO or CMO might dedicate two days a week to client X, one day to Client Y, and so on. That way, the employer also has a clear understanding of when the fractional employees are available.
You may be thinking: “why would anyone do this?” Afterall, fractional employees do forego health insurance and many other benefits they receive if they were full-time employees. One of the significant benefits for them is flexibility. They can have more control over their working schedules. Not only that, but fractional employees are usually motivated by the variety in their work. They get to work with different colleagues and tackle projects in different industries. This sort of experience is rare and can help these employees see what others aren’t seeing. It hones their knowledge and skills and makes them more competitive in the job market, and they’re able to connect disparate ideas from many different industries.
It is difficult to precise statistics on the number of fractional employees in any particular job market. Having said that, younger generations are more than happy to change jobs or take on multiple positions. According to the U.S. Bureau of Labor Statistics, the average worker predicts that they will hold about ten different jobs before they turn 40. Along with this, approximately five percent of workers tend to hold more than one job at once. While data on the industry itself is hard to come by, the fact remains that our working habits are changing. Fractional employment is becoming an increasingly attractive option for talented employees who are looking for alternative work arrangements.
So we can see why employees would favor the fractional employment model. Not only can it appeal to their preferred lifestyle, but it can help them learn about many different industries and become more competitive in the marketplace.
But what are the benefits for companies?
For starters, companies can quickly access stellar talent according to their own needs. One of the best things about fractional employment is that it can encompass a wide range of positions and tasks. You can hire everyone from fractional executives to fractional salespeople. Further, you can employ these individuals relatively quickly. There are no real rules here, meaning that your business can go out into the marketplace and hire any type of fractional employee as necessary.
For instance, a large, emerging company may be looking for help to address some accounting issues in its finance department. Here, it may make sense to bring on a fractional accountant. This fractional accountant can be quickly onboarded and start contributing on day one. S/he can work on as many projects as necessary within the two to three-day commitment at the company. The company gets the benefit of having an experienced professional use their talent to help the company accomplish important goals. On the other hand, the fractional employee gets more flexibility in their schedule and gets some variety in their work.
Another key benefit of fractional employment for companies is that it is less demanding on their budgets. This is especially relevant for companies that are undergoing financial pressures or stress. While they may need help to execute their growth plans, bringing on full-time talent could break their budget. Therefore, they are stuck in this dilemma of needing to hire more people, yet they aren’t able to do so.
Fractional employment can be the perfect solution in this case. Companies can get the help they need in an affordable, cost-effective way. The fractional employee can provide a substantial amount of value in the time that they are working at the company. Because they are only working two or three days per week at the company, they are compensated for less than a full-time employee. Because of this, your company can afford to bring on the talent that it needs for mission-critical tasks.
Finally, a key benefit of fractional employment is that it can fill temporary gaps in your organization. If your company lost a key member of your staff, for instance, you could leverage a fractional employee to fill the gap temporarily. S/he can rely on their experience to quickly take on the departed employee’s work. Moreover, they can stay for as long as the company needs. While they may only be in the office two or three times per week, their work can go a long way minimizing disruption from staff departures.
Regardless of the size or sector of your business, fractional employment can be an attractive option for your business. It lets you bring in a talented employee at a fraction of the cost. Not only that, but the employee brings to your organization their experiences and insights, which can ultimately make your company more innovative, productive, and efficient.
As with any hiring situation, it’s critical to complete some due diligence. Ensure that the fractional employee is a good fit for your organization’s culture. But by doing your homework here, your investment in a fractional employee will undoubtedly pay off.
Hanadi El Sayyed