The future of work: Is it worth becoming a fractional executive?

This article by Sasha Gonzales was first published in Her World.

Daniel Savov is a Bulgarian based in Kuala Lumpur, Malaysia. He’s been living in the region for almost a decade and describes himself as a growth leader working with start-ups to help them scale across acquisition, retention and monetisation.

For 12 years, the 35-year-old held a full-time job, working in marketing and then data, followed by product management, for various companies. It was only recently that he transitioned to consultancy and advisory gigs.

Throughout his career, Daniel forged a strong understanding of company dynamics and developed the skill of being able to pinpoint where companies needed to focus in order to grow.

A few months ago, he was “matched” with a Singapore-based fintech company through Wizly, a growth management platform that specialises in fractional recruiting. Since then, he has been working for them in the areas of SEO, user onboarding conversion, and expanding their data events for better tracking. He works from home and connects with the team through virtual meetings.

An expert in his field, Daniel says he can see himself continuing to do specialised work for different companies in the future. On top of earning more money, compared to what he might get at a traditional full-time job, he shares that fractional employment has given him a better work-life balance.

Fractional work: the latest employment trend

You’ve heard of blue-collar gig workers – think drivers, cleaners and delivery drivers; people whose labour is mostly manual, whose pay and work hours are highly unpredictable. They are sometimes referred to as “on-demand’ workers because they work only when they’re needed.

Lately, we have seen a rise in the number of white-collar gig workers, or “fractional executives”. Like their blue-collar counterparts, these executives are independent contractors who work only when they’re needed and don’t receive employment benefits from the companies they work for. The main difference is that these executives are engaged to fill VP up to C-level roles. Highly skilled, qualified and experienced, they are considered experts in their field, and as such, can command higher fees.

“According to Upwork (an American freelancing platform), the fractional talent market is expected to reach $13.8 billion by 2025,” says Puja Bharwani, a co-founder of Wizly.

“And according to LinkedIn, 57 per cent of companies are planning to use fractional talent in 2023, while Gartner (an American management consulting company) found that 75 per cent of companies believe that fractional talent is a valuable addition to their workforce.”

What’s behind it?

The Covid-19 pandemic may have changed the way many of us work, but fractional recruiting already existed before the pandemic, when companies realised that hiring executives and specialists on an as-needed basis gave them more flexibility and was more cost-effective, says Natalie Stones, fractional head of talent and the founder of Talent Refinery in San Francisco – a company that helps meet the recruiting challenges of small established businesses or early- to mid-stage start-ups that aren’t ready for a full-time team.

During the pandemic, companies could also choose from a global talent pool. As they had difficulty retaining talent during this time, they were forced to look elsewhere (mostly outside of their own countries) for people to fill specialised roles.

The pandemic therefore accelerated the growth of fractional recruiting.

“The nature of work has changed and is more dynamic than ever, because businesses have changing needs based on the environment and market conditions and people need more flexibility,” says Puja.

“All these factors combined are driving the future of fractional employment. Companies have also reduced their head count and expenses on building with large teams. The mass layoffs have created a large group of highly talented people who have great skills to offer but are not wedded to one company.”

Freelancer; fractional executive: What’s the difference?

Don’t confuse fractional executives with freelancers; they are not the same.

Puja says that a freelancer works for multiple companies at the same time and doesn’t specify the industry or level. On the other hand, fractional executives usually have about two decades of experience in a specific domain, and have opted out of being full-time senior executives with one single company.

Companies hire fractional executives to temporarily assume vital roles, achieving an optimal balance between time and expenditure. These executives usually work a minimum of one month up to a year. They work part-time and usually will agree with the company on a fixed number of work hours or days, based on the company’s needs and budget. Depending on the nature of their work, they can decide to work remotely on their own schedule or in the office.

“There may be phases in a company’s journey when they need high-level talent such as CMOs (chief marketing officers), CROs (chief revenue officers), CPOs (chief product officers) or CFOs (chief financial officers) for specific projects and tasks for a prolonged period,” Puja explains.

“They don’t need these executives for a full-time position, but rather, for their pin-pointed expertise for period-specific tasks such as launching a product in new markets; identifying a hiring and salary structure for a growing team; or building up a sales funnel and putting cadences and metrics around it. These are not tasks that junior-level professionals can do. These experienced individuals have playbooks, frameworks, proven success, and domain-relevant experience that they can execute in real-time.”

Of course, like regular full-time employees, fractional executives also must meet their agreed-upon targets and fulfil other deliverables, such as reaching a certain number of new customers by a deadline, and creating and executing a plan to achieve this.

Its benefits and drawbacks

As the job market tightens, talented professionals may find that working on different projects increases their skills base, industry knowledge, experience, and exposure to dynamic environments, says Fiza Malhotra, CEO of BeyondMarketing, a marketing and public relations consultancy and the growth marketing arm of early-stage investment platform, BeyondSeed.

“Fractional work therefore gives them the opportunity to test their capabilities in new environments, helping them make the next all-important career decision. Other benefits for these executives include flexibility and better work-life balance, high-earning potential, networking opportunities, global reach, and professional growth.”

Daniel has noticed other advantages of fractional work, although he adds that it “depends on the team you’re collaborating with.”

“In my experience, being in a fractional role allows you to focus more on a specific problem because you’re not working on numerous projects at the same time or required to attend company meetings. You also only have to report to one person at the company,” he says.

He also highlights the drawbacks, such as companies misusing their hires’ expertise and wanting them to do more than agreed upon.

“There’s also less opportunity for team interaction, which is not always a good thing if you’re working on high-impact projects – ultimately, you’re not fully engaged, whereas internal employees are. And compensation negotiation sometimes takes longer.”

Furthermore, fractional hires do not have the job security that comes with full-time, permanent, 9-to-5 employment. The work may also be unstable as hires face uncertainty regarding the duration of projects and future work opportunities. They may also miss out on opportunities for structured career development and compensation that often come with traditional employment.

When fractional hiring makes sense

One company that has hired talent through Wizly is BondbloX, a Singapore-headquartered bond exchange that allows individual investors to trade bonds electronically, in smaller denominations.

“We were looking to scale quickly and needed help on digital growth strategies for our B2C product,” says Raahil Shah, Vice-President – Growth, BondbloX. “Hiring takes three to six months, and working with a marketing agency did not work well for us in the past, so we tried fractional recruiting through Wizly.”

Right now, Raahil’s team is working with a fractional hire for growth marketing. He shares: “This fractional hire has helped us make impressive progress in just 45 days. This is because he has expertise in the domain and complete focus on the task at hand, without the distractions that a new full-time hire typically faces, such as socialising with the team, attending calls not fully related to their domain, IT training and setup, being pulled into non-core projects, and so on.”

At his company, Raahil reveals that a mid-senior talent working part-time can earn between $3,000 and $6,000 a month, depending on the executive’s job scope, expertise and duration of their contract.

Besides providing customised solutions and saving companies on overhead costs, benefits, salary and bonuses – all things typically associated with full-time employees – fractional recruiting allows companies to scale their recruitment efforts up or down based on demand.

The flexible nature of fractional recruitment also reduces the risks associated with uncertain and unpredictable recruitment needs. “Additionally, fractional talent helps free up the leadership team’s time, enabling them to concentrate on core functions and strategic initiatives. Fractional heads of talent can provide part-time management and mentorship to existing recruiting teams without requiring a full-time salary commitment,” says Talent Refinery’s Natalie.

Fractional executives often possess up-to-date industry insights due to their exposure to diverse projects and clients; they also bring expansive networks from various industries, contributing to better candidate sourcing.

Still, BeyondMarketing’s Fiza notes that fractional recruiting isn’t for everyone. “One drawback is the lack of commitment. Because fractional hires are typically not full-time employees, they may not be as invested in your business or as committed to your long-term success. This can lead to a lack of loyalty and a higher turnover rate.

“Another potential drawback of fractional hires is limited availability. Because fractional employees may be working for multiple clients or on multiple projects, their availability may be limited,” she says.

A trend that’s here to stay

Fractional work is the future. As we continue to move towards more flexible, project-based and remote working arrangements, Fiza predicts that it will become more prevalent. We may even see hybrid employment models combining fractional work with traditional employment as companies adapt to changing business needs.

“Further advancements in technology, particularly in communication and collaboration tools, will likely play a significant role in how the landscape evolves. And the integration of AI and automation may reshape certain industries, creating new opportunities for fractional workers while changing the nature of the work they do,” she says.

With the gig economy placing a premium on specialised skills, fractional executives may also be required to develop their skills and engage in ongoing training to remain competitive in their fields.

Fiza also believes that attitudes toward gig work are likely to continue to shift culturally, making fractional work a more acceptable option for highly specialised talent. “As more professionals embrace freelancing and entrepreneurship, societal perceptions of job security and career success may evolve, further contributing to the growth of the gig economy.”