Given the massive changes the world of work has experienced, the traditional 9-to-5 and gig work models were also bound to shift. But the “how” has undergone its share of change. One significant and understated trend gaining momentum in Canada is the rise of fractional employees.
Although popularized in the tech world, the trend is creeping into corporate. This innovative approach to staffing transforms how businesses operate and offers a compelling strategy for attracting top talent, especially for smaller businesses.
HR leaders like you stand to gain on jumping on an imminent trend.
This article shares the ins and outs of fractional employment and its competitive advantage in an agile and dynamic labour market. Fractional employees may be your key to attracting stellar talent and achieving business goals at a fraction of their realized costs.
Understanding Fractional Employment
Fractional workers work part-time or in project-based roles and offer executive-level expertise, splitting their time across multiple employers. Unlike freelancers or gig workers who often operate independently, fractional employees typically engage in long-term, strategic roles within organizations, moving the needle on critical business initiatives and providing specialized expertise without the commitment of a full-time position.
They’re usually in very senior positions as well. For workers with a wealth of experience eager to try different industries, fractional employment is a new route to expand their horizons. In a recent Indeed global survey, 30% of Canadian C-Suite and Board members and 32% of Directors+ have considered taking up a side gig to support their professional growth.1
As an employer, you reap the benefits of experienced and seasoned experts without the challenge of hiring someone full-time. American reports show that the fractional business model saves thousands in payroll or 30% to 40% over hiring full-time. Typical fractional roles include CEO, CFO, CMO and COO for startups and small and medium sized businesses.
This model offers several advantages. For businesses, it provides access to high-calibre professionals with diverse skill sets without the overhead costs associated with full-time employment, including a full compensation package. It also allows companies to start off by hiring at an executive level rather than hiring a junior worker at a low rate without said expertise. For workers, it offers greater flexibility, the opportunity to engage in varied, meaningful work, and exercise their skills in multiple industries. Workers can use fractional employment as a means to earn more income as well.
The Current State of Fractional Employment in Canada
A post-pandemic world has normalized flexible work arrangements, but with economic uncertainty afoot, businesses are seeking cost-effective solutions to their staffing needs. Workers are also looking for opportunities to increase their income. With the flourishing gig economy, non-traditional employment is now seen more favourably, allowing fractional roles to become more attractive and acceptable as well.
Fractional employees are contractors for payroll and tax purposes but do not receive full-time benefits. They have flexible working hours and arrangements and may be kept on a retainer basis.
While the data on Canadian professionals who are open or working on a fractional basis is unavailable, Google searches for “fractional CMO” are up 337% in 2022 compared to 2021. “Fractional CFO” is up 535% in the same time period. The technology, marketing, and consulting sectors are pioneers in fractional employment, where specialized skills are in high demand. Canadian companies are leveraging fractional employees to fill skill gaps, drive innovation, and adapt to market changes swiftly.
Why HR Leaders Should Embrace Fractional Employment
Access to Specialized Talent
Fractional employment allows companies to tap into a broader talent pool. Professionals with niche executive expertise who might not be available for full-time roles can bring valuable insights and skills to the organization part-time. This is particularly beneficial for startups and small businesses that need high-level expertise but cannot afford full-time salaries.
Flexibility and Agility
In today’s fast-paced business environment, adapting quickly is crucial. Fractional employees offer the flexibility to scale teams up or down based on project needs and market conditions without the hard costs associated with employment. This agility helps companies stay competitive and responsive to change.
Cost Efficiency
Hiring fractional employees can be more cost-effective than hiring full-time staff. Companies save on benefits, office space (if necessary), and other overheads often associated with full-time employment. Additionally, paying for expertise only when needed allows for better budget allocation and financial planning.
Implementing a Fractional Employment Strategy
To effectively integrate fractional employees into the workforce, HR leaders should consider the following steps:
Identify Needs and Strategize
Assess which roles and projects would benefit from fractional expertise. This involves understanding the skills required and the duration of engagement needed. Figure out how this role should be impactful once their term is over. Weigh how much this role will impact full-time employees and change the business unit and, in short, the organizational culture.
Overall, consider which roles can be comfortably fractional for your succession planning. Consider how you will navigate institutional knowledge once the worker is gone. In projects, ensure with managers that the permanent team is involved in parts of the project to ensure its continuity once the fractional employee is gone.
Create a Talent Pool
Build a network of fractional professionals. This can be achieved through partnerships with recruitment agencies, professional networks, online platforms specializing in fractional talent or scouring the many candidates with a wealth of experience on Indeed’s matching and hiring platform.
Develop Onboarding Processes
Ensure that fractional employees are integrated into the company culture and understand their roles. Clear communication and defined expectations are essential for success. Communicate clearly what is expected of them and how much interaction is needed between them and the permanent team. After all, these employees take up fractional roles for autonomy. It becomes your responsibility to ensure they are well-versed in what they must do to contribute to your success.
Monitor and Evaluate
Regularly review the performance and impact of fractional employees on your overall business and the department they’re influencing. Fractional workers are ideal workers when attempting to move on critical business initiatives quickly and diligently. Carefully review whether this contractual agreement benefited your employees, the company and the worker involved and whether this innovative working relationship is worth the effort in the future.
What’s Next?
The rise of fractional employees in Canada is a transformative trend you cannot ignore. By embracing this flexible and innovative staffing model, companies can access top-tier talent, enhance agility, and optimize costs. As the employment landscape evolves, fractional employment is a strategic approach to building a resilient and dynamic workforce. For HR leaders like you aiming to attract and retain the best talent, fractional employment should be considered in your recruitment strategies.
Once you strategized and developed your fractional talent strategy, post your jobs on Indeed.
Indeed provides this information as a courtesy to users of this site. Please note that we are not your recruiting or legal advisor, we are not responsible for the content of your job descriptions, and none of the information provided herein guarantees performance.
Source
- YouGov survey with job seekers and employers (n=1446), conducted on behalf of Indeed, Nov to Dec 2023.
