What is a ‘fractional’ hire, and how do you find one?

‍

‍

When might you need a Fractional hire?

Secure top-tier guidance for achieving those crucial funding milestones without the full-time salary commitment. Imagine, for example, that you’re an early-stage company where funds are limited and you want to get to Series A  - a fractional CXO can potentially allow you to ‘buy in’ the gravitas and seniority you need to secure funding without committing to the financial outlay required to bring that gravitas and seniority on board on a full-time basis.

‍

Fractional hires are often tasked with building a specific team or function, then stepping aside once the framework is established.. They might be responsible for defining team structure, recruitment and infrastructural setup, with an understanding that once the framework is established they will step back from the business.

‍

When your hiring budget doesn't match the market rate for the seniority you need - you’ve only budgeted £60k for a Chief Marketing Officer, but the market says they cost £150k - fractional expertise can fill the void, particularly when you’re at a stage when you don’t need someone full-time.

‍

‍

‍

‍

How do you know you need one?

You know you need one either because you’re struggling to get to the next stage of the funding journey, or because you’re hiring and the allocated budget simply doesn’t cover the seniority of talent that you actually require - for example, say you have an £60k allocation for a role whose market rate is currently £130k and there’s no wiggle room either side.

‍

The fractional route is a mechanism to counter salary inflation in tech, one could say. Further, with comparative lack of liquidity events within Europe in particular, there’s less of a desire for senior talent to offset salaries with equity and the fractional route has enabled some startups to bridge the gap of hiring senior talent when they can’t truly afford to do so.  - Sometimes though it’s just a fancy term for part-time.

‍

‍

‍

‍

‍

What Can (and Can’t) You Expect?

You're buying a fraction of their time. Clear deliverables and boundaries are key. What you cannot expect is the same commitment as a full-time hire with or without an equity stake in your venture - because you’re not paying for it.

The most vital thing of all for a healthy and productive relationship with a fractional hire is a clear mutual understanding of deliverables.

‍

Do not apply full-time hiring principles to a fractional role - you cannot expect someone of whom you are buying 20% of their time to afford you the same degree of commitment and input as if you were buying 100% of their time (while this may seem obvious, it bears repeating).

Like any contract, establish parameters, ways of working, KPIs, etc, at the outset.

‍

Remember, this is likely to be a senior hire, and as such make it clear whether this person is expected to get their hands dirty with the day-to-day “grunt” work: for example, deploying marketing campaigns or writing extensive code.

We’ve seen that fractional Senior Talent  guide and direct, but won't be in the trenches daily. Instead, you are purchasing their experience and expertise.

‍

You can give them a domain to own - eg build a tech function for my business, build a marketing  function, etc etc - and give them the authority to do it.

Often we see the best fractional relationship being involved in the core  strategy behind your business where they function as something akin to a trusted adviser or ‘consigliere’.

‍

A good fractional hire might bring valuable connections. But, please  clarify this upfront.

It's not a guarantee that a fractional person will want to open their contact book for every startup they work with given the nature of their trusted relationships.

‍

‍

‍

‍

What should you look out for?

There are a few common pitfalls we’ve often seen businesses encounter when dealing with fractional hires - but they can be guarded against with a bit of foreknowledge and foresight:
‍

• Expecting Full-Time Commitment
  ‍Because, as we’ve said, that’s not what you’re buying.
  ‍
• The "Long Term" Trap
  ‍This rarely works and muddles expectations on both sides. If your fractional CTO appears to see the engagement as either a long-term commitment, they are not behaving with a fractional mindset and may see you as a cash cow to be bled. Take care and be aware.
  ‍
• The “Fractional To Full-Time” Trap
  ‍Equally, problems also arise when there is an assumption that the fractional hire will become full-time in due course - this often has the effect of muddying the waters on delivery and timescales (on both sides) and can introduce an unhelpful lack of clarity into the working relationship.
  ‍
• The Personality Problem
  ‍Don’t underestimate the extent to which you need to get on with someone working at this sort of level, even if not on a full-time basis. When performed well, a fractional hire fulfils a role halfway between advisor/mentor business partner - so you need to respect them, and ideally like them, for the relationship to work.

‍

‍

‍

‍

Which roles are well-suited for Fractional hires, and what can they do for you?

• Financial modelling
• Investor relations
• Team setup

• Internal operations
• Hiring practices
• Future-proofing

• Tech strategy
• Team management
• Vetting tech suppliers

• Marketing planning
• Customer insight
• Building the team

• Product roadmap
• Pricing model
• Competitor analysis

‍

‍

‍

‍

Conclusion

Think of hiring a fractional CXO as being like engaging a consultancy for a specific, time-limited project. Look for people who:

‍

• Have demonstrable experience in your domain.
• Understand the time-limited nature of their role.
• Mesh well with your personality and values - we can’t stress this enough, but alignment is crucial.

‍

The best fractional relationships are treated like a high-level consultancy project. Get a deep dive into your needs, have them produce a set of recommendations and a roadmap, and use that to guide your team or hire full-time staff afterwards - and then get them out afterwards when the job’s done and they’ve left you in a better place than when they started.

‍

‍