The Essential Guide to Fractional Human Resources

Human Resource Management

Fractional Human Resources: HR Expertise Suited to Your Needs

The business landscape continues to see rapid changes during post-COVID workplace reimagining, forcing HR skill sets to grow, along with the price tag for increased expertise.

The traditional HR leadership team structures needed to manage these murky waters and help with strategic employee relations initiatives may no longer be enough.

Enter the era of fractional human resources (HR)

Fractional human resources is a game-changing solution that makes a big difference for large and small businesses by enabling businesses to partner with top-notch HR professionals on a part-time basis.

For many organizations, fractional HR enables them to scale their efforts at managing strategy, compliance, organization structure design, and talent management in addition to employee support needs in areas like payroll and benefits.

Why Your HR Department Might Leap on the Fractional Human Resources Bandwagon

Fractional human resources offers part-time HR experts who can manage all the organization’s human resources needs working with in-house and outsourced HR resources.

These seasoned pros have worked for many industries and companies of different sizes and are experts at fitting in with the existing corporate culture.

Unlike full-time in-house staff, fractional human resources allow companies to retain only the talent needed for a particular time or business need.

Understanding How Fractional Human Resources Works

Fractional human resourcesisn’t about lowering the cost of running an HR department but rather about getting the talent the organization needs at any given point in time cost-effectively.

Fractional HR can cater to an organization’s specific needs as in the example that follows.

Gen z taking to HR

Using Fractional HR for Help with Return to Office and Gen-Z Challenges

Consider an organization navigating some of today’s workplace challenges:

  • They want to build an office environment with the flexibility of work from home option

  • They’re in the process of overhauling a hiring and onboarding process to support remote employees,

  • Their older managers don’t know how to deal with the influx of Gen-Z team members

Instead of hiring three leaders with skills in these areas and accepting the hefty price tag that comes with it, this company opts for fractional HR support.

The fractional human resource team allows the appropriate pros to jump in temporarily and as needed to fill the gaps in the human resources team, whether steering strategic planning, managing talent acquisition, or ensuring compliance with the latest HR regulations.

Comparing Apples and Oranges: Fractional Human Resources vs. Full-Time HR

A fractional HR team becomes a secret weapon when organizations need HR firepower without committing to a full-time hire.

scale showing differences between traditional v fractional HR

A full-time HR executive brings stability and constant availability, with the ability to drive HR initiatives over the long haul.

On the other hand, they come with a hefty salary commensurate with the breadth of their experience.

At the same time, fractional HR experts offer a more agile approach.

Companies can hire the fractional HR team needed for the initiative in play, swapping out that team as needs change.

Crafting a Modern HR Approach

Combining Fractional HR with Other HR Options

Picking between fractional HR, HR outsourcing, and HR consultants hinges on a business’s needs, size, and desire for hands-on HR operations, as well as understanding the difference between them.

Understanding HR services is a key to leveraging fractional HR

 Fractional HR: Your Part-Time HR Maestro

A fractional HR team gives you custom solutions and strategic prowess.

They come ready to excel, with significant knowledge in their field, tailor their tune to the business’s rhythm, and tackle strategic HR conundrums without the full-time price tag.

Outsourced HR: The Whole Shebang

HR outsourcing provides an entire HR team for specific operational disciplines, such as Benefits, Payroll, Recruiting, and other HR services.

Organizations may also use HR outsourcing to replace the entire department and all HR support functionality.

HR Consulting: Project Experts

HR consultants are typically project-based and support specific products and processes.

HR consultants typically work with the internal team members to implement or overhaul processes to meet changing business needs or to implement new products.

 A Patchwork Quilt Meets Modern HR Needs

Organizations may leverage all three to fulfill different needs

A Chief Human Resources Officer may provide the internal talent and continuity needed by their business and then use fractional HR teams, outsourced HR, and project consultants to deliver various aspects of their HR mission.

This can include supplementing or replacing an in-house HR team.

Putting together their team in this way enables them to secure additional expertise their company needs.

The Benefits of Fractional with HR

benefits of fractional HR

There are many advantages to hiring fractional HR, most striking a balance between cost-effectiveness and prowess.

Cost Efficiency through Reduced Overhead

Fractional human resources allows businesses to access high-level HR expertise without the full-time salary, benefits, and other costs associated with an in-house HR leader.

Scalability

Companies can scale their HR services up or down based on their current needs and budget.

Flexibility and Expertise

Fractional human resources team members often have experience working with multiple companies across various industries, bringing a wealth of knowledge and best practices.

Strategic Focus

Fractional HR leaders can provide strategic guidance to align HR functions with overall business goals and can supplement in-house leadership.

Being removed from day-to-day operations, they can offer unbiased insights and recommendations for improvement.

Efficiency and Effectiveness

Fractional HR can quickly implement changes or new programs without the ramp-up time a new full-time in-house hire might require.

Compliance and Best Practices

With their broad experience, fractional HR professionals stay up-to-date with employment laws and regulations, helping to mitigate legal risks impacting a company.

Conflict Resolution

They can serve as neutral parties in resolving workplace conflicts, benefiting from not being entrenched in company politics.

Customization

Fractional HR services can be customized to fit the unique needs of the business.

This can include focusing on recruitment, employee engagement, performance management, or compliance.

Enhanced Focus on Core Business Functions

With a fractional HR professional handling HR functions, the leadership team can focus more on core business activities and company growth strategies.

The Price Tag: Understanding Costs and ROI

The cost savings of fractional HR can be jaw-dropping, but it’s not just about cutting costs; it’s about investing in strategic support that drives business forward.

hands with charts and calculators

The ROI is Not In Dollars Alone

Calculating the ROI of fractional HR also includes reducing the cost of compliance violations and lowering risk and workers’ compensation claims.

Fractional HR provides the leadership needed to run HR and outsourced HR services to ensure optimization efforts provide the expected return.

When to Hire a Fractional HR Leader

Organizations might opt to include a Fractional Chief HR Officer (Fractional CHRO) as a part-time liaison to their board of directors or to fill a temporary staffing gap.

Small and mid-sized companies may only need a part-time Fractional CHRO.

 Choosing a Fractional HR Partner: A Buyer’s Guide

Picking the right fractional HR partner is crucial, and it’s not as simple as drawing names out of a hat.

 Follow these tips:

Tip 1: Understand whether you need fractional HR leadership, outsourced HR services, an HR consultant or all of them.

Tip 2: Look for experience that aligns with your business challenges and company culture.

Tip 3: Don’t be shy—ask for references before hiring a fractional HR team, delve into their track record, and make sure their ethos jives with your company’s vibe. 

Remember, you’re not just hiring an HR service; you’re inviting someone to join your team, even if it’s only for a few hours a week.

Also, remember that outsourced HR functions still need to be managed by someone in with the skill and strategic intent of the organization in mind.

Making Fractional HR Services Work for You

Let’s circle back to where we started:

Fractional HR services aren’t just a buzzword or a fleeting trend; it’s a strategic solution that’s making waves across industries. They’re also no HR outsourcing.

Whether you’re a lean startup company or a growing business facing complex HR challenges, fractional HR offers a flexible, cost-effective way to bring in the right skill set and work well within the existing company culture.

Grow into the Future:

Don’t let HR hurdles slow you down. With fractional HR, you can tap into top-tier talent, drive strategic initiatives, and keep your business humming—all without breaking the bank.

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Phyllis Drucker

Phyllis Drucker

Phyllis is an innovative and focused professional with more than 20 years of experience in Business/IT Strategy, Enterprise service management, governance, customer service and support, ITSM tool implementation, HR automation and team building. After more than 20 years in the support industry, she is taking her thought leadership out to the community by focusing on writing and speaking. In addition to her activities as a blogger, she's a published author and her book “Service Management Online: Creating a Successful Service Request Catalog” is available through TSO. She's also an experienced international speaker, having delivered keynotes and conference breakout sessions since her first speaking engagement in 1997. You can follow Phyllis on Facebook, Linked In and Twitter or visit her website www.ez2bgr8.com.