hours x month. Multiplied by the hourly wage, that’s the number organizations use to budget a full-time employee. But in today’s dynamic business environment, is full-time HR staff always the most efficient and costeffective solution? Does the work require 173.3 hours? Will the employee have the expertise to excel?

Leading HR requires a strategic vision, effective planning, seamless execution, collaboration, and a deep understanding of the various facets of HR. Those facets include the salesmanship of recruiting; the technical expertise and market savvy required for compensation; the knowledge of employment law and organizational operations necessary for developing and applying employment policies; and the specialized skills demanded by benefits, employee relations, labor relations, and HR systems. For most organizations, it’s not necessary or feasible to hire specialized staff for each role.

Forward-thinking CEOs are increasingly turning to fractional HR solutions for greater flexibility, specialized expertise, and a better return on investment.

Organizations that use fractional HR services avoid overpaying for skills that aren’t fully utilized or burdening employees with tasks outside their core competencies. Further, studies by Microsoft (2023) and Standord (2014) found that only 40 percent to 58 percent of a full-time employee’s 173.3 hours are spent in productive work, with the rest consumed by distractions, social interactions, and administrative tasks. Fractional team members operate within a billable model, where clients pay for productive work with fewer distractions, while the provider bears most of the administrative costs.

Benefits, taxes, and overhead significantly inflate labor expenses above the face value of wages for in-house employees. In a fractional HR solution, the provider bears those expenses. For example, the actual cost of a $100,000 employee can be $140,000 or more when factoring in employer and mandated benefits, employment insurance, and taxes. That number grows when considering office space, equipment, supplies, IT and HR support, and other employment-driven costs.

Hiring the right talent and navigating the complexities of employment law pose significant risks for employers. Even the best recruiters, hiring managers, and selection processes won’t bat 1.000, and the tightest compliance culture won’t eliminate risk. Fractional HR staff mitigate risk because they are not employees, are managed flexibly through a vendor relationship, and they apply employment compliance expertise.

Continuous adaptation is required for organizations to thrive and survive. Fractional HR offers the flexibility to scale HR resources as needs evolve, avoiding the financial and operational strain and disruption associated with staffing that is too large or too small, reactionary hiring, and workforce reductions.

Fractional HR professionals bring an array of specialized expertise, tools, and resources, including access to industry best practices, cuttingedge HR technology, and extensive professional networks. Clients realize the benefits of a proven HR leader, seasoned compensation expert, or professional investigator without the overhead of full-time employees. Organizations embracing fractional HR can right-size their HR function, enhance the quality of HR leadership and expertise, access a broader array of tools and resources, adapt more quickly, and avoid the costs and risks associated with hiring full-time staff.

Ready to explore the benefits of fractional HR for your organization? Contact a reputable fractional HR provider today to discuss your specific needs and discover how this innovative solution can help you achieve your business goals.