Gig Work in the C-Suite? Fractional Execs Are on the Rise

Contingent workforce arrangements have reached the C-suite. Fractional executives—part-time leaders often working on a contractual basis at multiple companies simultaneously—are trending.

Experts say fractional executives are a cost-effective way to access the expertise and experience of highly skilled professionals to help with specific projects or initiatives, launch new products, navigate a restructuring, or fill a leadership gap.

"There is a trend happening," said Ash Athawale, senior group managing director of the Executive Search Practice at staffing and recruiting firm Robert Half. "We are getting inquiries on this sort of thing, sometimes while we are doing an executive search, to fill the gap until we find the next leader. This is happening in finance, operations, IT and HR."

Liesl Bernard employs fractional executives at CannabizTeam, the executive search and staffing firm she runs as CEO, and places fractional executives at client companies within the cannabis industry.

"The pandemic accelerated the trend and changed who is interested in becoming a fractional executive," Bernard said. She explained that previously, this type of role was filled by leaders who were near or at retirement age but not ready to retire. They picked up some extra work to stay intellectually stimulated. But since the upheaval of the pandemic, it is becoming more of an intentional career path for midcareer executives.

"Many of them were laid off during the pandemic, and out of desperation or just a way to get back to work, they started to pick up project work, working for companies a certain number of hours per week," Bernard said. "They're people who fill VP-level and above roles at companies for a few hours per week on an ongoing basis. They're particularly valuable among startups that don't have the budget to hire a full-time executive. But fractional execs are working with a variety of companies, across industries and not just with startups."

Fractional executives may act as advisors but are different from external consultants in that they typically exercise executive authority over direct reports within the organization and are able to execute strategy. They also typically divide their time between multiple companies.

Whether or not to adopt the trend really depends on the needs of the organization, said Carrie Alderson, a career development and recruitment consultant in Barcelona, Spain. "The traditional 9-to-5, full-time employment model is evolving, and the rise of fractional executives is a testament to this shift," she said. "Imagine being able to bring on board a top-tier, highly experienced executive to your team—a seasoned CMO, CFO or CTO—but without the full-time commitment and the sky-high compensation package."

Alexander Kirss, senior principal, research for the Gartner HR practice, said that determining what the organization needs, and how those needs can be met through hiring additional executive support, is the true challenge organizations face. "This leadership-needs analysis shouldn't be lost amidst a broader discussion about fractional executives," he said.

Benefits of Hiring Fractional Executives

Advocates of the practice say that both employers and job seekers can benefit from the arrangement. 

"The beauty of fractional leadership is its versatility—it can benefit a range of organizations," Alderson said. "Startups can leverage executive expertise without blowing their budget. [Small and midsize businesses] can scale efficiently while keeping costs down. Even larger corporations can harness fractional executives to lead specific projects or implement strategic initiatives."

Bernard said the primary benefit is that employers are "getting high-quality talent at a fraction of the cost. Fractional executives are more affordable than full-time employees because companies don't have to provide benefits like health coverage and retirement packages or pay them for overtime and paid leave."

She added that fractional executives enable companies to scale up and down their teams based on their needs and "can hit the ground running because they don't need to go through a company's formal onboarding process."

Alderson said that in addition to bringing a wealth of experience and knowledge to the table, these executives also come with a new outlook. "A fractional executive, not mired in company culture or internal politics, brings fresh insights and an unbiased perspective," she said. "This can be a powerful tool for change and innovation."

The flexibility of the arrangement can help reduce burnout among executives, while also allowing them the opportunity to manage their own schedule and take on a variety of assignments.

"People found an entrepreneurial streak during the pandemic," Athawale said. "Fractional execs can start with a client or two, and then take on a couple more clients until they have a schedule that fills 40 hours a week, or arrange their schedule anyway they want to include other pursuits."

There Are Risks, Downsides

The very aspects that make the arrangement appealing—flexibility and short-term duration—come with potential hurdles.

"Companies may not have access to the executives when they need them," Bernard said. "Because they are not working on a full-time basis, they are limited on the job."

Another problem can be a lack of clear direction, Athawale said. "Employers need to know what kinds of skills they are looking for, how long they will need them in the role, and exactly what they will be doing when they are on the job. It can't be, 'Oh I know Bob, he's great, we just need him around.' "

Kirss believes organizations that have the resources and growth trajectory to support hiring and developing full-time executives should do so instead of relying on fractional executives. "There are enough downsides to hiring fractional executives that organizations should proceed with caution and carefully consider the tradeoffs of staffing their leadership team with part-time leaders," he said.

Adding fractional executives to a leadership team that also contains full-time executives can spark unwanted tension from both sides, Kirss said. "Full-time executives may wrongly assume that fractional executives lack sufficient buy-in to the organization or worry that they themselves may be replaced with a fractional executive. Conversely, experienced fractional executives may struggle to integrate into a less experienced leadership team at a smaller, fast-growing organization than their previous role. Adding fractional executives to a leadership team may only increase the executive talent management burden on either the CEO or the head of human resources."