Fractional working. It’s becoming more popular, especially for small and medium sized businesses who don’t need or want someone full time, but they require specific expertise and someone who is invested in their company.
So, what is fractional working?
Fractional employment is a model whereby employees work part-time for several different employers during the month. A person with a specific skillset is retained for a set period of time and will work for a percentage of their month for a range of companies – providing their expert advice, guidance or the delivery of work.
This is particularly beneficial for both parties – especially for small or medium sized businesses that need strategic input and experience from time to time but who do not need a full time fixed strategic leader. The employer benefits from the flexibility of having this person on call for meetings or key decisions – agreeing up front the expectations and how and when time will be used.
Fractional workers are able to work across multiple industries and bring huge insight into each of their ‘employers’ by transferable knowledge and learning. It’s especially advantageous for start-ups, small and medium sized businesses who want the expertise but don’t need full time resource at that level.
Speaking with a Chief Product Officer (CPO) who is a fractional worker. They are able to work with some incredible teams providing strategic direction and insight based on their many years as a CPO for large FTSE organisations. The business doesn’t require someone full time, nor possibly could not afford. The business is able to utilise half a day a week / 2 days a month for a fraction of the cost and gains just what they need in terms of strategic input. The CPO, in this case, is retained by multiple companies, remains fully engaged and excited by the challenges of each business and feels valued for the work they’re able to contribute – whilst earning a decent monthly income.
Another example, is a Chief HR Officer (CHRO or sometimes also called a CPO – Chief People Officer). They have a 50% contract with one employer, where they are committed to spend 50% of their working week – not necessarily fixed days – and the rest of their week is spilt 30% across other client work, 20% working on their own start-up tech product.
Downsides of fractional working?
A fractional model doesn’t necessarily work in large corporates where there are more teams vying for decisions, direction and reporting, especially if there are regulators involved. It also won’t work if the power of control needs to be more evenly distributed. Fractional workers may not have the same value to the business due to their contractual nature as a fixed full time executive member.
Let’s take a small charity, for example. They might require a CFO for ultimate sign off and strategic direction but on a day-to-day basis the operating model is such that a chartered accountant or accounts payable clerk can manage the books. Whereas, a fintech requires a balance at the exec level to ensure product, technology, commercial, finance and people decisions are considered equally, and decisions might need to be made very quickly with all parties voices valued equally.
Is this the future?
The fractional model works well when you need to scale or reduce your requirements for specific disciplines throughout the week, month, or year. Commercially, a fractional model reduces the need for ad hoc consultants who occasionally have conflicting timelines to your needs. It allows for greater business security by having the same person who gets to know your business and who is committed to you and your company and it’s a more affordable model than hiring someone full-time. I personally think it’s the future of work.