The popularity of fractional executives has surged, particularly over the last few years. And it’s not hard to see why. By bringing in strategic expertise on a part-time basis, organizations can access essential leadership skills while maintaining lean overheads. This is particularly beneficial during times of economic uncertainty when all new hires are closely examined, especially at the executive level.
For the leaders themselves, working on a fractional basis allows them to work across diverse industries (and challenges), while giving them the chance to further bolster their skillsets. And although it sounds obvious, fractional leaders have greater flexibility, which no doubt significantly enhances their work-life balance.
So, what is a fractional leader and how do they differ from traditional full-time leaders?
Put simply, a fractional leader works on a part-time basis. Some work a few days a week while others tend to only do a few hours a week – each contract is unique depending on industry and a company's need.
One of the main benefits to a fractional leader is it’s a lot more cost-effective to bring in someone with massive experience for short-term projects rather than hire permanent, full-time executives. Smaller organizations that don’t have the budgets to hire leaders on a permanent basis benefit from being able to access executive expertise that they might otherwise not be able to afford.
The ability to bring in a specific set of skills to manage a particular project that the wider organization may be lacking is another advantage to having a fractional leader. For example, if you're going through a technology transformation (and who isn’t!) and leaders within the organization haven't managed one before, fractional leaders can bring in subject matter experts they’ve worked with and impart knowledge into the businesses they're partnering with. This also helps with change management and adoption rates both during and after technology projects and overhauls.
The shift to hybrid and remote working following COVID means companies can now access fractional leadership talent that they might not have been able to attract previously. A global talent pool allows for better hiring alignment on organizational processes and culture fits.
Although there are countless benefits associated with fractional leaders, there are also some downsides (like most things).
Fractional leaders, for instance, are not always the best fits when executing long-term strategies – as oftentimes, they lack the in-depth knowledge that permanent employees have. As permanent employees and leaders, it's much easier since they already have a thorough understanding of the different functions and the different levers available within an organization. It’s also harder for fractional leaders to build relationships given they’re typically not embedded into any one area on a full-time basis. That extra time to bond and socialize with their colleagues can often get lost.
The term fractional leader is a relatively new term, but interim executives have been around a long time – so the distinction and the way the two roles work will likely become more blurred.
In short, fractional leaders will likely become a permanent lever in boardrooms to pull when needed. The ability to tap into specialized knowledge on an as-needed basis means organizations can drive strategic initiatives, navigate both internal and external challenges, and seize opportunities without the long-term commitment or financial burden of full-time, permanent hires.
In today’s ever-changing business environment, fractional leadership offers an agile solution that benefits both the organization and the leaders involved.