What is Fractional HR ?
What is Fractional HR ?
I have been asked if I can do an explainer article to help clarify what this fractional HR thing is, why I think it has emerged, how best to engage with it and the value it provides both consultants and clients.
So let me do that with a series of simple Q&As:
What is it ?
A fractional HR person is someone with broad and deep expertise to support companies (typically SMEs) that need help with that function on a part-time, interim consulting capacity. Robust enough to credibly interact with the founders / CEO and with a toolkit that can create value as the business grows and evolves.
That means my clients get on-demand access to my HR expertise without having to hire a full-time Head of People that they likely can't afford (and frankly might not even need full-time, at this stage).
When someone thinks of an HR consultant, they often think of someone who may not be fully engaged with an organization. That's not the case. A fractional HR consultant acts as a readily available, flexible, and seamless part of a leadership team, a driving force to the success of your business and promptly available for employees.
What it’s not ?
· The typical full-time resource that the business feels the need to own under the old social contract construct. The liquid workforce is driving a horse and coaches through this old paradigm.
· The one-off external change agent that delivers the bespoke workshop, an associated bucket list of actions to follow-up with, but leaves the room before sustainable change happens. Embedded into the organisation, the Fractional HR delivers ongoing and contextual culture change like ‘adding milk to coffee’ by constantly and positively flipping the system.
· The outsourcing HR services business who will deliver transactionally against the symptoms of dysfunction (the grievance and disciplinary letters, risk mitigation and provide a minimalist suite of services), not a unique and consciously positive culture build.
Why is it emerging ?
· The push can be attributed to the elevation of HR post-pandemic in the face of unpredictable external market forces and an emerging new world of work. It’s a time for new thinking and capabilities, bringing the best of the outside, to helps SMEs do that effectively beyond the old cookie cutter HR template of yesteryear.
· As a pull, the unbundling of work and the 4-day week lobby are manifestations that productivity and value is increasingly not determined by a deal struck a century ago for a 40-hour working week in return for a fixed salary. Why wouldn’t we approach the business problem in a more focused manner, based more on outcomes rather than paying for time served.
· The Liquid workforce, growing increasingly in size, importance, and specificity, has now spawned another category that opens up new and agile resourcing solutions that leaves the traditional and time-consuming advertise > hire > onboard a perm process in its wake for speed, expertise and productivity gain.
What are the unique selling points ?
· The Client gets the best of both worlds – Ultimately the clients get the output they need for a "fraction" of what it would cost to hire a full-time executive with the same level of expertise.
· Cost Effectiveness – Regular full-time staff are expensive, especially if not used to full capacity. Fractional HR, as it implies, is a fraction of the cost too. A quick example shows a full-time HR leader including base salary, bonus and benefits, additional Employers’ National Insurance contributions, can easily exceed £200,000 per year. The fractional model typically is 40% of that expense.
· Flexibility – Increase or decrease HR services (or even days) to match the needs of the business. Many smaller businesses do not need full-time support on a regular basis. That support may ebb and flow, but fractional HR allows you that flexibility.
· Accounting Treatment Advantage – Consultants can be accrued differently than regular full-time employees and as a result are not recorded as a fixed overhead.
· Ease of Severability – If the business arrangement ends there are no added expenses typically incurred with full time employees such as severance, unemployment liability etc. Just serve the agreed notice, when necessary, as circumstances change.
What about the Fractional HR Leader themselves ?
Personally, I get to work with around a handful of clients at any given time. I walk the line between strategic and tactical support, simultaneously building people capabilities, while handling the day-to-day people issues that inevitably pop up. You need to be a builder at heart and I personally love being able to translate practices learned at bigger institutions famed for execution excellence, into something that works for the unique culture of each SME, whilst walking the fine line with being ‘too corporate’.
I hope that was a useful introduction, but if a follow-up conversation would be helpful to you here’s my calendar. https://calendly.com/bf1/conversation-with-barry-flack. Feel free to book a slot convenient for you.