Should SMEs Consider the Fractional Work Trend?
While the sudden shift to remote work during the COVID-19 pandemic garnered a lot of attention, another emerging trend is the rise of “fractional” or part-time employment for specialized roles and executive-level positions.
A new report from the McKinsey Global Institute highlights how the pandemic accelerated workforce trends like automation and e-commerce adoption. This is likely to force more workers to change occupations in the coming years, often requiring a shift into higher-skilled, higher-wage jobs. For small and medium enterprises (SMEs) seeking skilled talent, the fractional work model offers an intriguing potential solution to consider.
What is Fractional Work?
Rather than hiring full-time employees, fractional work involves bringing on experienced professionals like executives, technical experts, and operational leaders on a part-time, temporary, or project basis. These flexible employees work reduced hours for reduced pay compared to full-time roles, but provide the same high-level oversight, strategic input, and hands-on execution.
The potential benefits of going fractional are compelling for Small to Midsize businesses (SMEs)
Cost Effectiveness
An independent COO working 10 hours per week could provide critical leadership for around $100,000 per year all-in. Hiring that same caliber of operative full-time could easily cost over $250,000 with salary, bonuses, benefits and more. SMEs get elite expertise for a fraction of the cost.
Flexibility in Fractional work
Fractional working arrangements can be spun up quickly with relatively low risk. Hours and responsibilities can also be scaled up or down nimbly as needs change. This allows SMEs to efficiently “try before you buy” top talent.
Specialized Expertise
Fractional employees tend to be seasoned veterans with extensive experience across multiple companies and industries. SMEs gain access to a level of specialized skill they likely could never attract or afford otherwise.
An Option Worth Considering
For SMEs facing economic downturns or other challenges, flexible expertise can be a valuable asset in helping them navigate difficult times. The McKinsey report highlights how the workforce makeup is likely to shift significantly in areas like leisure/travel, on-site customer service, and e-commerce logistics.
A travel company looking to adapt its operations and marketing for the new normal could greatly benefit from a fractional chief marketing officer who has led such transformations before. An e-commerce retailer might need a part-time logistics expert to optimize distribution and fulfillment. A small manufacturer could leverage a fractional operations manager to guide it through increased automation.
Of course, fractional work is not a silver bullet. There are still many roles and situations where dedicated full-time employees provide more consistency and integration. However, for SMEs facing skills gaps, budgetary constraints, or the need for flexible high-level expertise, exploring fractional opportunities is an option worth considering.
The fractional work trend had been simmering for years, but the pandemic’s disruptions provided fertile ground for it to really take root across industries.
As companies and professionals both seek more flexibility and risk-sharing, fractional arrangements can enable better matching between the specific skills needed and the talent available.
SMEs have always had to make scrappy, creative staffing decisions to remain competitive with larger rivals.
Leveraging the fractional work model could be the key to accessing essential expertise in a cost-effective way.
It’s a trend that SMEs should seriously evaluate as they chart their path forward.