An increasing number of businesses are now discovering the many benefits of hiring a fractional executive when the firm requires specialized management skills in a particular field on a temporary or part-time basis. One of the reasons is that the ROI of fractional executives can often be multiple times the financial investment that is required.
What Does The Term Fractional Executive Refer To?
A fractional executive is someone who is highly skilled in a particular field such as IT, finance, production, etc., and who makes his expertise available to businesses on a part-time or on-demand basis.
When Does Hiring A Fractional Executive Make Sense?
The client gets the benefit of hiring an executive with many years of experience in a particular field at a fraction of the cost of a full-time manager. This is the perfect solution for smaller businesses that do not have the resources required to employ a full-time executive or even larger firms that suddenly have to deal with a major contract that requires expertise they do not currently have on board.
A large firm can also suddenly find itself in a crisis if its COO or CIO unexpectedly leaves. Without their leadership skills, the company might sustain severe financial losses. This is where a fractional executive comes in. He or she can provide the necessary interim leadership experience and skills at a fraction of a cost of a full-time executive.
A similar situation could arise if the firm should decide to expand into a field where it does not currently have much experience. Fractional executives typically have a wide range of skills related to various disciplines and signing a contract with one or more of them could remove a lot of the uncertainty and risk from the equation.
What Are The Benefits Of Using The Services Of a Fractional Executive?
1. You can save a significant amount of money. Top executives do not come cheap. Apart from their salaries, they also have to be paid other benefits that can be as high as 50% of the basic salary package. Then one also has to take into account PTO employer taxes, bonuses, and the cost of office space and equipment. By using the services of a fractional executive, a firm can get all the benefits of his or her skills and experience at a fraction of the cost. And if the firm’s needs for such a position should increase or decrease in the future, it would be very easy to adjust the terms of the agreement. For a business, this is a win-only situation.
2. It can help your firm to gain a competitive advantage. Many fractional executives have worked in more than one C-suite capacity for between 10 and 20 years. They know what it takes to seize business growth opportunities and creatively solve problems. Their wide experience is often hard to find among their in-house counterparts. This combination of talent, education, expertise, and cross-industry experience provides their clients with an undeniable competitive advantage in an increasingly competitive business environment.
3. Guide current employees through an uncertain period. Getting a professional such as a fractional COO or CIO on board will make things a lot easier for your other employees. It will make it possible for them to focus on their core job responsibilities without having to do something for which they don’t really have the necessary experience and/or skills. This is particularly relevant if the firm is currently expanding into a new field and it doesn’t yet have the necessary full-time expertise on board.
4. Short-term financial commitment with long-term benefits. Let us say, for example, that your firm started small and gradually grew from there. Initially, you had only one employee working on a single PC. Today it has grown into a multi-faceted business with many workers and a drastic need for an expert to reorganize the IT department and place it on a stable long-term course.
You can, of course, employ a full-time executive. But that is a long-term commitment for which you might neither have the funds nor the need at this stage. All you really need is a plan to help you get from where you are now to where you want to be. Someone who can implement better processes and more streamlined systems. The solution is to hire a fractional executive on a contract basis. Once he or she has done what they have been contracted to do, the contract can be terminated or the terms can be renegotiated.
The Bottom Line, it should be clear that the ROI of fractional executives can be multiple times the initial investment. If your company is currently in a situation where it desperately needs high-level professional management skills in one or more areas without making a long-term commitment, allow us to explain to you how a fractional executive can help without breaking the bank. We are only an email or phone call away.
