Established businesses are turning towards fractional employment for their C-suite needs as the demand for in-depth industry knowledge increases.
However, many startups are still choosing not to acquire part-time expertise.
Midlands fractional employment consultants Champions (UK) plc is encouraging young businesses to not overlook flexible executive additions – their Managing Director, Matthew Hayes, has spoken about embracing this instead.
What are the benefits of fractional employment for businesses today?
He began: “I think there are a number of factors behind the growth of fractional employment. It’s partly about the size and scale of a business, but it’s also about flexibility and adaptability, from both the talent and the businesses. More and more, companies need a wider portfolio of expertise, especially at senior levels.
“There was initially a big focus on just sales and marketing, because that’s where the demand was, big ad spends, managing inbound enquiries. But with the rise of digitisation, suddenly a whole range of niche, specialised expertise became necessary. It’s just not realistic for businesses to buy all of that in via full-time headcount.
“What that leaves businesses with is either a generalist with only a bit of knowledge in each area, or a highly specialised expert in one area who lacks understanding in all the others that the business also needs. Either way, it’s an inefficient and ineffective approach. Every five years, we’ve seen the demand for deeper and broader specialist skills grow.”
The rise of automation and AI has affected the need for organisations to hire in every full-time position, while the aftermath of COVID has caused a broader skills gap.
Hayes believes fractional employment at a C-Suite level is helping to bridge the financial gaps left by a talent war and its unstable landscape.
“We’ve seen a shift towards building strong C-suite teams across key functions using fractional, project-based, contract, or even day-rate expertise,” he explained. “It’s a more flexible way of accessing the skills needed for strategic decision-making, governance, and oversight.
“Fractional employment isn’t going away, it makes commercial sense. There are supply and demand issues in the talent market, which pushes up prices. There’s growing need for depth and breadth of knowledge. Generalists are valued less; specialists are valued more, and we need more of them.
“The only real way businesses can meet their needs now is to become more flexible in their approach. We’re seeing that flexibility reflected in working patterns too, which is now influencing how businesses recruit and retain talent.”
What stage should a startup consider fractional leadership, and how can they ensure it integrates well with the core team?
“They should consider it from day one, or at least close to. If you’re a sole founder or a small founding team, figure out quickly what you’re good at, what you uniquely bring to the table. Just as quickly, identify your weaknesses.
“Now, a lot of people early in their careers focus on improving their weaknesses. But I’d say, whether you’re an apprentice or a board-level founder, do the opposite.
“Double down on your strengths. Surround yourself with people who are better than you in other areas. Because of the changes in how we can engage with talent today, you can do that in a very cost-effective way.
“You can build a strong expert team on a day-rate basis early on, just to provide what’s needed. If those people can see your journey and believe in it too, then that’s a great foundation for a long-term partnership.”
What are the most common misconceptions startups have about bringing in fractional executives, and how do you address them?
“It’s not just startups, the fractional market is still misunderstood in general. One reason is that people in more traditional, full-time roles often see fractional talent as a threat. I don’t see it that way.
“Fractional leadership is a flexible opportunity for businesses to access high-level expertise in a cost-effective way, expertise that’s fit for the challenges of today, not five years ago.
“So, be open-minded. Talk to experts, like us. They can help guide you to the right talent, at the right price, and make sure the cultural fit is right. If you just go out into the market on your own, you run the risk of ending up with someone who’s not what they claim to be.
“A lot of our process is built around due diligence, making sure the expertise someone claims to have is real, and that it’s appropriate for the businesses we’re working with.”