A fractional executive is hired by a company to fill an executive role for a “fraction” of full-time work, working more like a consultant and eliminating the costs of long-term commitments, high-end salaries, and all the employee benefits that come with a job. The reasons to consider hiring one now can be explored by thinking through the details of your business.
Hiring a fractional executive may seem complicated, but there are questions you can ask yourself about your current business environment that will help you best determine why now may be a good time to hire a fractional executive for your business:
Do you need help from an expert to plan the vision for your company?
You’ve built your business into what it is today, and you have a vision of how you think the business can grow. But are you the person to take it to the next level?
Maybe you don’t have the time because you’re too busy executing. If you’re feeling that your skills are topped out at this time, you may benefit from a mentor to motivate you.
Fractional executives can help you by offering operational excellence and guidance, by helping you strategize your way out of the busyness of execution, by providing you with the mentoring and coaching you need to grow your skillset, and they can take on the role of leading growth, with accountability, if you don’t want to.
Do you have the tactical team in place without money left in your budget to hire the strategic leadership to guide and manage the execution of the team?
Many business owners find themselves knee-deep in fulfillment. They are actually a key player on the tactical team making sure that clients get what they pay for and they are so mired in the day-to-day fulfillment that they:
- Can only stop long enough to get the next client to keep the company afloat
- Can’t extricate themselves to do all the other functions required to ensure a healthy company with a bright future.
Hiring a fractional executive at a fraction, thus “fractional” of the time and the cost of a full-time employee might be just what you’re looking for to have the strategic leadership needed for your team while you work your way out of and up from the day-to-day operations of the business. It could be helpful for you to hire a fractional executive to help you get out of the day-to-day operations and to mentor and coach you in leadership while guiding the team on a march toward growth.
Do you currently have the expertise and leadership skills in your company to meet your business goals?
If you look at your business, its past growth, and its trajectory. Do you have the expertise and knowledge to help you successfully meet your business goals? Have you been in your comfort zone getting the company to where it is? Maybe to grow you need to get out of your comfort zone, but maybe, just maybe you don’t embody the expertise and skills to get where you want to go.
It is misguided to assume that the expertise and leadership skills you have that got you where you are, are also the skills needed to get you where you want to go. This can be a hard truth and requires a willingness to consider. If you don’t have the skills, hiring a fractional executive with the proper expertise could be just what you need to lead you and your team to meet those goals.
Is your company large enough to hire and fulfill the expectations of an executive-level employee?
What is required to hire an executive-level employee? According to www.salary.com the average top compensation executive salary in the United States is $202,634 as of February 2021, but the range typically falls between $180,408 and $204, 879. Of course, this range includes many factors, but you can look at these numbers (and add on benefits) to figure out if your company is large enough and profitable enough to hire a full-time executive.
If you’re a small to medium business (SMB) your answer may be, “no, we don’t have the wherewithal.” If your answer is “no” it doesn’t mean that you don’t need the help of an executive with the skillset and leadership abilities to help you grow. It might mean that for a fraction of this salary you can find a seasoned professional with the exact expertise you need to make the business advancement you’re looking for.
How do I find a fractional executive?
There are a number of ways to find a fractional executive: word of mouth, collegial relationships, industry meetings, and online sites such as linkedin.com or any of the freelance platforms. There are many experts who have spent years honing their skills, who are entrepreneurial in spirit, and are now looking to be of help to others working on short to long-term projects.
Many fractional executives have spent their careers in larger corporations and no longer find that kind of work existentially fulfilling or satisfying. By offering their services to multiple SMBs they get to be of service, work on shorter-term projects, and feel satisfied getting closer to the “heart” of a business.
How much does a fractional executive cost?
On average, fractional executive costs $6,000/month to $10,000/month. The most common agreements are between $7,000-$8,500/month for most small- to mid-sized companies.
What kind of fractional executives are there?
Fractional executives include, but are not limited to, CIO, CMO, CEO, CSO, VP of Sales, and CFO.
What’s the difference between a fractional executive and a consultant?
Traditionally, a consultant is brought on to help businesses think through trouble spots and transitions. They are paid to assess what new practices, procedures, new hires, etc. need to be put in place in order for the business to see positive change. The consultant, unlike a fractional executive, isn’t brought on to offer operational assistance and to be held accountable on a daily business and for the outcome of the project, short or long. Fractional executives or “operational” executives come in and get their hands dirty and are responsible, as an employee would be, for the results promised.