An increasing number of companies are hiring fractional executives to access exceptional talent and scale faster.
Explore how to hire a Fractional CTO and what qualities to look for while assessing candidates.
What Is a Fractional Executive?
Fractional executives are seasoned professionals who provide guidance and expertise to businesses in a fractional (project-by-project or less than full-time) capacity.
They specialize in fractional work and have extensive experience and leadership skills from working as a C suite executive (CEOs, COOs, CTOs, etc.) in multiple companies.
Depending on their background, fractional executives can have highly-specialized knowledge and expertise or encompass a broader skillset.
These professionals bring the skills, industry knowledge, and networks to help companies address challenges and drive growth — especially in the firm’s early stages.
And as they are fractional, they dedicate only a portion of their time to your company. This lets every business owner tap into exceptional talent and expertise without the cost and commitment of hiring a full time executive.
When Should You Hire a Fractional Executive?
You should hire a fractional executive if:
- You don’t have the time for strategic planning as you’re tied up with day-to-day operational tasks.
- Your senior team lacks the necessary skills to drive growth in a specific area, such as operations or marketing.
- Your team needs mentoring from a seasoned professional.
- Your organization requires the skills and expertise of a C-suite executive but you don’t have the budget or need for a full-time hire.
- You need to quickly replace a senior member of your team without disrupting operations.
- You need fresh perspectives as your current operating model doesn’t meet expectations or you’re facing critical business challenges.
- You need leadership support during a transition or restructuring period.
What Are the Different Types of Fractional Executives?
Fractional executives include but aren’t limited to:
- Chief Technology Officer (CTO): Oversees the development and execution of technology strategies, manages the technical infrastructure, drives innovation, ensures alignment with business goals and objectives, and supports growth through the effective use of technology.
- Chief Marketing Officer (CMO): Develops and implements strategies to drive brand awareness and positioning, conducts market analysis, oversees marketing initiatives and their effectiveness, and works closely with other departments to align marketing strategies with overall business objectives.
- Chief Operating Officer (COO): Formulates strategic plans and ensures effective execution, oversees finance and budgeting, drives operational efficiency, mitigates risks, assists with team management, and aligns all operational activities with company objectives.
- Chief Product Officer (CPO): Leads product strategy and development, ensures successful product delivery, aligns product development with customer requirements, market trends, and business goals, and manages product lifecycles.
- Chief Financial Officer (CFO): Manages financial planning and analysis, monitors financial performance, oversees activities like budgeting, forecasting, risk management, and reporting, and ensures transparent and effective monetary governance.
- Chief Security Officer (CSO): Ensures the company’s overall security, develops and implements security policies, strategies, and protocols to safeguard information and assets at various levels, analyzes threats and vulnerabilities, and manages regulatory compliance.
- Chief Revenue Officer (CRO): Develops and executes revenue strategies aligned with market dynamics and company objectives, optimizes pricing models for maximum profitability, manages revenue forecasting and reporting, and focuses on sustainable business growth.
- Chief Information Officer (CIO): Manages information systems and technology resources, identifies opportunities for digital transformation, optimizes IT investments for maximum ROI, and oversees data governance.
- Chief Executive Officer (CEO): Sets the company’s strategic direction, oversees operations and finances, leads the seasoned executive team, and ensures overall business success.
Fractional Executives vs. Interim Executives, Advisors, Consultants & Freelancers
Fractional executives, interim executives, advisors, consultants, and freelancers mainly differ based on three aspects:
- Scope of their responsibilities
- The level of involvement within the company
- Duration of their engagement
Here’s an overview of their differences:
- Fractional executives are experienced professionals who dedicate a fraction of their time to an organization.
- They provide leadership, strategic guidance, specialized knowledge, and expertise to grow a company.
- They often have a more involved, long-term engagement with the organization and provide hands-on execution when completing their fractional work.
- Typically, they work up to 20 hours per week. But depending on the individual, they may work hourly, daily, weekly, or monthly.
- Most fractional executives go by a monthly retainer and use value-based pricing instead of charging by the hour. (More on these costs later.)
- An interim executive is a temporary professional who fills a leadership gap within a company while the organization seeks a permanent hire.
- They work closely with the leadership team to ensure a smooth transition.
- An interim executive usually works around 40+ hours a week.
- Compensation for interim leadership can vary based on location, industry, and function.
- Advisors guide organizations on operations, strategy, finance, or industry-specific challenges.
- They may not be directly involved in daily activities.
- Generally, they may work with a company for an extended period of time, but their engagement is often limited to a few hours per month.
- They may charge a combination of cash and equity.
- Consultants are professionals/firms hired to tackle specific challenges or projects in a company. They are usually employed full-time by large firms and provide part-time services to your company.
- Traditional consultants often work project-by-project, providing guidance and recommendations based on their expertise, besides handling tactical tasks.
- Depending on expertise, project complexity, etc., they may charge between $150–$1,000 per hour.
- Freelancers are self-employed professionals who work independently on specific projects.
- They offer specialized services/skills on a contractual basis and usually have less expertise.
- They are usually more involved in execution roles than traditional consultants who primarily provide strategic guidance.
- They often have short-term engagements, flexible schedules, and work arrangements.
- They typically charge hourly rates depending on the industry/field, experience, time commitment, etc. Rates might range between $30-$200/hour.
While all these roles may overlap, fractional and interim executives are hired for ongoing, part-time leadership roles, and tend to be more hands-on.
On the other hand, freelancers, consultants, and advisors usually provide specialized services for short-term tasks.
Why Hire a Fractional Executive for Your Business?
From specialized expertise and strategic guidance to cost-effective leadership, fractional executives offer companies a dynamic solution to drive growth.
Here are seven compelling reasons to leverage fractional executive services:
1. Access Cost-Effective Expertise and Leadership
Hiring a full time executive may not always be economical for every business owner, especially for businesses in the early stages.
The good news?
Fractional executives provide a cost-effective alternative to full-time senior executive positions, delivering strategic leadership at a fraction of the cost and time commitment.
For example, hiring an in-house chief marketing officer may cost you around $400,000 annually, which includes salary, taxes, equity, and bonuses.
If you go with a recruiting agency, you might have to pay another $100,000 as recruiting fees.
On the other hand, a more qualified fractional CMO may charge an average of $15,000 per month, amounting to just $180,000 annually.
You also don’t have to offer your fractional leader bonuses, equity, or other employee benefits — making them far more affordable than a full-time senior executive.
2. Work with Seasoned Industry Experts
Suppose your team has developed a product and achieved product-market fit, but you’ve encountered challenges like excessive bugs, high costs, lengthy development times, system outages, etc.,
In such cases, hiring a fractional CTO can help you fill a leadership gap.
With their wealth of knowledge and expertise, a fractional CTO can:
- Help the team improve product performance and reliability
- Speed up project execution
- Carry out strategic planning and align development with business objectives
- Identify and resolve operational inefficiencies
- Optimize your tech stack for improved performance
- Mentor and educate your team on best practices and industry trends
This way, you can accelerate product development while leveling up your existing leadership team.
3. Leverage Hands-On Talent That You Don't Need Full-Time Yet
As your business expands, you may need specialized expertise in a specific area, but the requirement may not justify a full time hire.
For example, suppose your e-commerce business is expanding into medtech, and you need the expertise of an experienced executive with medical know-how.
However, it may not be a full-time position yet.
In this case, opting for a fractional CTO with a background in the medical industry can be a strategic choice.
4. Obtain Faster Results and Newer Perspectives
Unlike traditional executives, who spend most of their time building team relationships, fractional executives prioritize tackling immediate challenges and generating results.
Here’s why this is important:
Your fractional executives can dedicate more time and energy to addressing pressing issues while you delegate relationship-building responsibilities to the teams they mentor or collaborate with.
Plus, fractional executives bring new perspectives, empowering them to offer practical suggestions you can implement ASAP.
Since the fractional leader is external to the organization, they can assess situations objectively. This impartiality means they can introduce solutions that genuinely benefit your organization.
5. Trial an Executive Hire Before Committing
Engaging a fractional executive offers a risk-free way to evaluate their suitability before making a long-term commitment.
You can analyze their skills and assess their compatibility with your company culture before committing long-term.
But that’s not all.
When your specific requirements for a position are unclear, having someone in a fractional role can help clarify your specific needs.
As the fractional executive works on the project, you can better understand the requirements for such a role and create the job specification, helping you make full-time hires in the future.
The seasoned executive can also help craft job descriptions and interview potential candidates.
6. Get Valuable Guidance for Business Growth and Expansion
Remember: Fractional executives have extensive experience working with successful companies.
So they understand what’s vital to a company’s sustainable growth and can deliver exponential results based on their previous accomplishments.
Fractional executives can help you:
- Develop a long-term growth strategy prioritizing value delivery, innovation, customer retention, and satisfaction.
- Identify bottlenecks and inefficient processes within your organization and execute solutions.
You can leverage their expertise to optimize productivity, reduce costs, and set up processes that enable growth. Their insights can also prove invaluable in navigating changing market trends or financial challenges.
7. Quickly Adapt to Changing Business Environments
During economic downturns, fractionalization can help businesses navigate workforce adjustments.
A fractional C suite executive can offer expertise and support in transitioning between stages without the long-term financial and contractual obligations associated with a full time employee.
But that’s not all.
A small business can quickly replace its departing senior employees with fractional executives, preventing disruption and allowing the company to continue operating seamlessly.
How to Hire a Fractional Executive
You can hire a fractional executive via referrals, professional connections, industry events, and online platforms like LinkedIn or freelance websites.
However, hiring a fractional executive might be off the beaten path for many companies.
So, it would be best if you collaborated with someone who understands your unique requirements and is committed to finding the perfect match for your organization.
You need Go Fractional.
Hire the Best Fractional Executive in the World with Go Fractional
Go Fractional is a curated network of exceptional fractional executives dedicated to assisting you in growing your business.
Why Go Fractional?
At Go Fractional, we foster a thriving community of vetted fractional executives and openly disclose our rates to every client.
Plus, we go beyond traditional practices by occasionally investing in the founders or the companies they work for.
These core pillars set us apart from competitors who charge significantly higher fees, enforce agreements to conceal payments, and are less discerning about their talent.
We also relieve you and the fractional executives from burdensome sales and administrative tasks, letting them focus on what they love most — working on client projects.
You pay less overhead costs and pay the fractional executives what they’re worth!
How Go Fractional Works
Here’s how we’ll help you find the best fractional executive for your specific needs:
- Connect: We offer a wide selection of member profiles for you to explore.
- Meet: Set up meetings with our members to discuss crucial details such as deliverables, timelines, and pricing. Introduce the selected Go Fractional member to your team to ensure a cultural alignment. We’ll then present a comprehensive proposal that outlines the engagement in detail, so you and your stakeholders can review it thoroughly.
- Begin: Once you’ve reviewed and approved the proposal and selected a start date, we’ll send contracts based on the outlined details.
How We Source Our Fractional Talent
- Applications: We only accept candidates currently working in a leadership role or founders of successful companies.
- Interviews: We’ll then interview all the candidates to ensure they’re a good fit for our community and clients.
- Profiles: The candidates must then build a profile highlighting all their previous experience, projects, and work and submit their profile for approval.
Go Fractional follows a monthly invoicing system, charging a fixed price for each member.
You’ll receive a single invoice regardless of the number of fractional executives you collaborate with. We’ll also communicate with you regularly to ensure everything is progressing smoothly.
How Much Does a Fractional Executive Cost?
The cost of hiring a fractional exec depends on various factors, including the duration of engagement, scope of work, expertise, position, and more.
At Go Fractional, we provide personalized pricing for our fractional executive services, ensuring that each executive receives a customized arrangement based on their experience and expertise.
We offer monthly retainers, ranging between $10,000–$20,000.
3 Best Practices for Hiring Fractional Executives
Some common challenges organizations face when working with a fractional exec include communication gaps, poor goal alignment, and limited relationship building.
Don’t worry! Here are a few best practices to help you overcome them:
1. Establish Clear Goals
Someone in a fractional executive role can only do so much if their goals are vague.
For example, presenting them with a general need for marketing assistance can undermine their ability to deliver the best results.
To get the most out of your part time executive, you must establish clear and specific targets, such as increasing website traffic by 20% within three months through social media marketing.
Additionally, you should schedule meetings and develop comprehensive proposals to establish clear boundaries and specific objectives for the person in the fractional role.
2. Watch Out for Communication Gaps
Since fractional executives have reduced working hours, certain updates may slip through the cracks.
Fortunately, the best fractional executives understand this and have the know-how to stay updated and informed effectively.
At Go Fractional, our fractional executives often arrange one meeting and two in-person syncs weekly. Plus, our talent will adjust to any communication processes your company already has in place.
3. Develop Strong Relationships
Full-time executives usually dedicate a decent amount of time building trust and relationships across the organization. But this is more difficult to do on a reduced-hour schedule.
Follow these handy tips to build strong relationships with your part time executive:
- Keep your experienced executive informed about organizational updates and initiatives.
- Provide necessary support to help them perform effectively.
- Regularly evaluate their contributions.
- Communicate openly and encourage feedback.
- Establish trust by empowering them to make decisions and complete tasks without micromanagement.
FAQs on Fractional Executives
Here are a few other questions you may have about fractional executives:
1. How Long Do Fractional Executives Work with Organizations?
Fractional executives typically work with organizations on a part-time basis for a span of 3–18 months, though some engagements last longer.
The engagement usually continues until the company expands sufficiently to afford a full-time hire or until another employee acquires the necessary skills to assume leadership responsibilities.
2. How Do Professionals Benefit from Working in a Fractional Role?
Professionals who work in a fractional capacity benefit by participating in high-level projects in high-growth startups. This way, they can network with industry leaders, observe different business operations, and gain even more experience.
They can also collaborate with multiple organizations concurrently while dedicating time to their own ventures.
Unlock Your Organization’s Growth with Fractional Executives
Embracing fractional executives can help you thrive in a dynamic and increasingly competitive business landscape.
Their expertise and flexibility allow you to identify new opportunities for growth, innovation, and collaboration at a fraction of the cost of hiring a full time employee.
Ready to hire top-tier fractional executives?
Let’s Go Fractional! We’ll connect you with the best fractional executives, ensuring hassle-free onboarding and collaboration.