What the h*ll is a fractional executive?

Tight Labor Market, Out-of-Control Stock Market… Is Your Next Hire a Fractional Exec?

Before we get into the meat of this post, some of you might be wondering what exactly a fractional exec is? In short, I would consider this role as an experienced executive working part-time (2–20[ish] hours per week) to fulfill a specific C-level need at a company. This could be a former CEO, COO, CFO, CHRO, CTO, CMO…. you get the gist.

So, why might you need one?

There are many reasons a company might look to hire a fractional exec, but I have listed some of the most common requests we receive here:

• You have a complex strategic initiative with a pre-determined end date that requires guidance from an experienced leader.
• You have a kick-ass operational/financial/marketing/tech employee, but they are missing the strategic skills of an experienced exec.
• You are an early-stage company experiencing incredible growth but don’t have the need, budget, or time to make a full-time hire. However, you would benefit from an experienced exec’s expertise [a favorite among the Juno Capital portfolios].
• You need an experienced business leader to delegate the management of your financial, operational, or marketing functions while you search to identify your next full-time c-level hire [this is our most common request — both the fractional search and FT exec search are handled by our executive recruiting team].

Let’s talk markets… labor market, stock market, and fractional market.

I will try my best to keep this short, but if you ever want to spend an hour or two of your day talking economics, call me — I love this stuff! But, to get back on track, it’s no secret that the economy is going through a state of change — inflation continues to rise, the stock market is a wild rollercoaster, but through it all, the labor market is continuing to stay highly competitive. The changing economy has arguably impacted the tech sector more than any other. And as a result of inflated valuations and growth plans that now seem unattainable, these companies now need to cut back costs and shift to focus on achieving profitability.

The tech sector has long relied on utilizing layoffs as a way of controlling costs. But unfortunately, some leaders, who perhaps never encountered layoffs before, recently found themselves in unfamiliar terrain and mishandled the situation. By this stage, I’m sure we’ve all heard stories of companies that did mass layoffs over Zoom, others who shut down access without warning, and some who assured employees layoffs were not coming and then, without notice, conducted mass layoffs shortly after.

Layoffs are an emotional experience for everyone at the company — the employees impacted, those retained, and management — and should be treated with utmost care and humanity by leaders. The situations covered in the last paragraph are prime examples of how a company could have benefited from a fractional HR executive to help craft a company communications plan, diversity and impact analysis, and day-of support in conducting the layoffs. Layoffs will always suck, and there is no easy way to do them, but there are better ways.

Meanwhile, on the other side of your office, it might be time to open up the books in your finance and accounting department and seek the expertise of an experienced CFO who has weathered an economic storm before. Of course, this will look different for every company, where some will look to partner with a fractional CFO for ongoing needs such as budgeting, forecasting, assessing long-term and short-term financing needs, and overall financial management. Whereas others might look to partner with a fractional CFO with specialized expertise in M&A or raising capital. Whatever your situation, having the guidance of an experienced financial executive is incredibly valuable, especially during a time of economic uncertainty.

Similarly, there are many reasons why you might want to consider a Fractional COO, CMO, or CTO, but in the interest of time, I will skip those, and just like with the economy, call me — I am always down to talk about this too!

So you might be wondering how many executives are now exclusively offering fractional executives? Or perhaps you’re thinking about how many offer their services as a ‘side hustle’ alongside their full-time role? Or maybe you’re pondering how many executives are considering making the jump to fractional? I’m wondering the same, so if you find the answer, please let me know. However, it’s fair to assume that the number of fractional executives has likely increased significantly over the last few years as the number of total independent workers in the US increased by 34% between 2020 and 2021. This data eludes to a growing fractional marketplace and implies a positive sign for companies looking to partner with specialized executives on a fractional basis.

What are the benefits of hiring a fractional executive?

Asides from the specialized expertise, making a fractional executive hire comes with other benefits too;

• You can adjust their capacity to mirror your business needs. For example, if you partner with a fractional CHRO, you might need an increase in support during open enrollment or an organizational restructure.
• You don’t need to worry about benefits or a lengthy equity negotiation when hiring a fractional executive.
• You can benefit from a fractional executive having cross-industry experience. Their fresh perspective could lead to innovative solutions for your business.
• You can fill an immediate senior-level need while conducting a search for a full-time resource.

I’m sold — how do I hire a fractional executive?

I’m glad you asked; Juno’s executive search team is here to help connect you to your next executive hire, whether fractional, full-time, or both. Throughout our years of working in talent acquisition, we’ve built a network of seasoned professionals, each with their own specialized expertise, who can provide executive-level leadership for growth-oriented companies on a permanent or interim basis.

Originally posted on Juno Search Partners on July 19, 2022.