Re-imagining the C-suite: 7 things founders need to know about hiring fractional talentGrowth & Scaling
When you think about the gig economy, you might not immediately think it applies to senior-level leaders. However, the market for fractional talent has recently grown, all the while more and more high-level execs are seeking flexible roles that allow them to diversify their revenue streams and make an impact.
It's typical to see fractional Chief Marketing Officers (CMOs), Chief Financial Officers (CFOs), and Chief People Officers (CPOs). But as demand grows, it is increasingly common for fractional talent to fill other C-Suite positions within operations and technology functions.
For founders, the advantages are attractive–decades of experience with lowered overhead costs. But can a senior leader be effective only working part-time? Or is it a pipe dream for founders who need expert leadership but have limited cash flow?
Rethinking the traditional organizational structure
Startups have been growing in number, and with rapid growth comes the demand for experienced leadership. But hiring a full-time CMO or CPO isn’t always practical, especially in the early days. Founders are increasingly aware of the skills they need to hire for, while at the same time may lack the funding or revenue required to sustain a permanent position. This is where fractional executives can help fill the gap.
”There is value if you can find the right person who can provide the right level of expertise,” says Alitta Tait, Harvest’s Head of Partnerships & Engagements. "Fractional executives can add tremendous value when startups aren’t ready to hire a person full-time but need an experienced leader that can help drive strategic decisions."
And while it might sound like the dream solution, there are some things to consider before going all-in on a fractional talent strategy.
What startups need to know about hiring a fractional executive
1. They help founders tune out the noise and move forward
A founder wearing too many hats has less time to focus on the strategic direction of the organization. Oftentimes, startups lack the much-needed perspective to move forward. Fractional executives provide a fresh pair of eyes to help problem solve and remove barriers so that founders can focus on the critical path forward.
2. They guide an inexperienced team
A fractional executive can bring their years of experience to lead and mentor a junior team. They can help set and meet organizational goals while building internal capacity and setting the team up for future success.
3. They save you money
The most tangible benefit of a fractional hire comes from the costs saved over hiring a full-time senior leader. But, fractional leadership can also help cut costs in other areas. For example, if the business is losing revenue, it might be time for a fractional CFO to come on board. They can help the startup avoid common mistakes and bumps in the road.
4. They will give you the hard truth.
It can be difficult for some founders to have an outsider come in and offer constructive criticism. A fresh perspective will bring feedback garnered from years of experience. This might not sit well with some founders, who are less prepared to accept negative feedback on their business.
5. They can be met with internal resistance.
Fractional executives may cause some internal tension. There may be confusion and a lack of support from internal team members, especially if the function of the new role isn't well communicated.
To help mitigate this, explain to the team why this temporary hire is here and what benefits the organization will reap. To smoothen the transition, help the fractional employee understand your workplace culture.
6. They’re not suitable for all types of roles.
Another caveat, some roles may not be the best to outsource. For example, tech companies should own product development from start to finish. It’s critical to have a CTO and in-house tech team from day one, rather than relying on fractional talent in the long term.
7. They don’t replace the need to build skills internally.
It’s important to set your teams up for building capacity. For example, when outsourcing, ask how much your fractional hire will support building aptitude within your team. That way your organization won't be dependent on outside talent. As your company grows and generates more revenue, you can take on that function in-house.
At the end of the day, the many benefits of fractional talent are not met without a few challenges.
Before bringing a fractional employee on board, make sure you’re prepared for possible sources of tension within your team. It’s also important to think about how you can simultaneously build capacity within your team to set them up for success once the fractional employee's agreement comes to an end.
Want to know more about how Harvest helps connect growing startups with skilled talent? Learn more about our Recruitment services, including executive search.