What is fractional HR?

Whilst it has been around for a few years now, fractional HR services are increasingly in demand. None more so than in the established SME, start-up and scale-up markets where small businesses don’t necessarily require in-house resource on a full-time basis or perceive they have the budget for hiring experienced HR expertise. For the fractional HR professional, this enables them to work with multiple clients in a way that is beneficial for both the individual and the businesses they serve.

So, with this in mind, Dominique Seal, who specialises in executive interim HR and transformation, sat down with Barry Flack, an award-winning fractional HR executive.

In this interview, Dominique spoke to Barry to help clarify what fractional human resources is, why he thinks it has emerged, how best to engage with it and the value it provides both executives and clients.  

For more information on fractional HR solutions, either from a business or an HR consultant perspective, please get in touch with Dominique today.  

What is fractional HR working?

A fractional HR professional is someone with broad and deep expertise to support companies (typically SME in size) that need help with that function on a part-time basis, interim capacity. Robust enough to credibly interact with the founders/CEO and the rest of the leadership team, and with a toolkit and network that can quickly create value as the business grows and evolves.  

That means my clients get on-demand access to my HR support 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 organisation. That’s not the case. A fractional HR Executive acts as a readily available, flexible and seamless part of an HR department on an ongoing basis, a driving force to the success of your business and promptly available for employees on-demand. Their value is that they can use that experience and HR expertise to allow the business to quickly go through the gears from a growth and complexity perspective.

What fractional HR is 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 and thinking.
• 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 professional delivers ongoing and contextual company 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 that gets in front of the potential issue, before it emerges.

Why is it emerging?

• The push can be attributed to the elevation of human resources 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 help HR professionals do that effectively beyond the old cookie cutter HR practices 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 needs and strategic HR 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 HR solutions that leaves the traditional and time-consuming advertise > hire > onboard a full-time hire process in its wake for speed, HR expertise and productivity gain.

What are the unique selling points of fractional HR?

• The client gets the best of both worlds
  Ultimately the client gets the output they need, from top talent and HR experts, for a “fraction” of what it would cost to hire a full-time executive with the same level of expertise within their HR team.

• 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 Director including base salary, bonus and benefits, additional Employers’ National Insurance contributions, can easily exceed £200,000 per year. The benefits of fractional HR typically include cost savings of around 40% of that expense.

• Flexibility
  Increase or decrease HR functions (or even days) to match the evolving HR needs of the business. Many business owners do not need full-time support on a regular basis. That support may ebb and flow, but fractional HR services allow you that flexibility.

• Accounting treatment advantage 
  HR 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 are the unique selling points for the fractional HR Leaders themselves? 

Personally, I get to work with around a handful of clients at any given time. I walk the line between HR strategy and tactical support, simultaneously building people capabilities, while handling the day-to-day HR tasks that inevitably pop up. You need to be a builder at heart and I personally love being able to translate HR processes learned at bigger institutions famed for execution excellence, into something that works for the unique company culture of each SME, whilst walking the fine line with being ‘too corporate’.

I also get to focus on employee engagement, retention and performance management in a way that aligns with each client’s business goals and specific needs. This flexibility allows me to support strategic planning and drive initiatives that improve the overall employee experience.