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What is a Fractional Executive and When Does it Make Sense to Hire One? Article by: InterimExecs 

Fractional executives are the hottest thing in the C-suite. Once a rarity, fractional executives have gone mainstream, especially since the pandemic. Companies across the spectrum, from start-ups to Fortune 500 firms, are considering hiring fractional or part-time executives.

During a webinar, InterimExecs CEO Robert Jordan took a look at the trend and some situations when a fractional leader might make sense for your company.

First, the definition.

In short, a fractional executive is an experienced C-suite executive — CEO, CFO, CIO, COO, CSO, CTO, or CMO — who works less than full-time. The work arrangement might call for the fractional executive to be on the job a few hours each day or a few days each week. They often work for two or more companies at the same time.

Fractional executive work “has become its own career calling,” Jordan said. “They are not ‘between jobs.’ They love doing fractional work.

“Executives who excel at this have a strong repeat track record of success. If not, it would be a hard career to sustain,” he said. Fractional executives “are driven to take on new challenges, drive for results, and focus on building, growing, and transforming businesses.”

Here’s how a fractional CEO can benefit your organization.

What Are the Benefits of Hiring a Fractional Executive?

There are many benefits of hiring a fractional executive rather than a full-time employee, including:

Reduced cost

There is no employer-employee relationship with fractional executives. They typically charge a monthly or project-based fee. That can be a fraction of the cost of hiring a full-time executive with similar experience, who will expect a big paycheck along with other perks of the job, from health insurance to stock options to severance pay.

More Flexibility

Fractional executives can be hired on an as-needed basis so companies can adjust their staffing levels based on workload and budget. Fractional executives work for a defined period, from as little as a few days to as long as several years, depending on the needs of the company.

Access to a Bigger Talent Pool

Fractional executives who are part of InterimExecs RED Team are highly experienced and talented professionals who are not interested in full-time employment.

That means business leaders have “more tools in their tool box now than ever before.” Like a baseball manager who will bring in a new pitcher mid-game, a business leader can bring in new leadership as needed.

“The nature of business is such that thee are stages and cycles and things that happen for all of us. Now, there is more possibility for everyone to put someone new into the game,” Jordan said.

Less Risk of a Bad Hire

Because fractional executives are typically hired on a short-term contract, companies can assess their performance and make changes relatively easily if the executive doesn’t work out.

Ability to Access Specialized Skills

When your company is growing or going through transition — such as a planned IPO or sale — it requires specialized skills. This is a great time to contract with an experienced fractional executive who has been there and succeeded in the past.

In one case, Jordan related, a European tech company wanted to enter the US market. It contracted with a fractional CEO who had “hit two home runs — zero to $100 million twice!” It proved to be an affordable and effective way for the European company to launch in the U.S.

What is a Fractional Executive?

Fractional executive work “has become its own career calling,” Jordan said. “They are not ‘between jobs.’ They love doing fractional work.

“Executives who excel at this have a strong repeat track record of success. If not, it would be a hard career to sustain,” he said. Fractional executives “are driven to take on new challenges, drive for results, and focus on building, growing, and transforming businesses.”

Here’s how a fractional CEO can benefit your organization.

What Are the Benefits of Hiring a Fractional Executive?

There are many benefits of hiring a fractional executive rather than a full-time employee, including:

Reduced cost

There is no employer-employee relationship with fractional executives. They typically charge a monthly or project-based fee. That can be a fraction of the cost of hiring a full-time executive with similar experience, who will expect a big paycheck along with other perks of the job, from health insurance to stock options to severance pay.

More Flexibility

Fractional executives can be hired on an as-needed basis so companies can adjust their staffing levels based on workload and budget. Fractional executives work for a defined period, from as little as a few days to as long as several years, depending on the needs of the company.

Access to a Bigger Talent Pool

Fractional executives who are part of InterimExecs RED Team are highly experienced and talented professionals who are not interested in full-time employment.

That means business leaders have “more tools in their tool box now than ever before.” Like a baseball manager who will bring in a new pitcher mid-game, a business leader can bring in new leadership as needed.

“The nature of business is such that thee are stages and cycles and things that happen for all of us. Now, there is more possibility for everyone to put someone new into the game,” Jordan said.

Less Risk of a Bad Hire

Because fractional executives are typically hired on a short-term contract, companies can assess their performance and make changes relatively easily if the executive doesn’t work out.

Ability to Access Specialized Skills

When your company is growing or going through transition — such as a planned IPO or sale — it requires specialized skills. This is a great time to contract with an experienced fractional executive who has been there and succeeded in the past.

In one case, Jordan related, a European tech company wanted to enter the US market. It contracted with a fractional CEO who had “hit two home runs — zero to $100 million twice!” It proved to be an affordable and effective way for the European company to launch in the U.S.