The world of business in the status quo is very dynamic, which can make running a business a bit tough. If you want your business to thrive, you need agility in adapting to changing market needs and resourcefulness to maximize every step. However, traditional HR models can strain your budget because they are manual and often overstaffed. On average, 1.4 HR staff per 100 employees is ideal, but this number reaches 2.57.
Another recent study says qualified professionals are harder to find. Thus, such talent shortage and rising costs of full-time HR staff leave you stuck.
This is where you can turn to fractional human resources services. It is a great alternative to the costly HR approach. It offers a better way to manage your workforce, which will bring you closer to peak business efficiency.
What is Fractional HR, and How Does it Work?
Fractional human resources lets you hire experienced HR professionals, like chief human resources officers (CHROs) and their teams. But, the catch is that you don’t need to commit to a full-time salary and benefits to the HRs. Instead, you get experienced professionals on a part-time or project basis. They allow you to tailor their services to your business’s needs.
Unlike a traditional HR department, fractional HR offers flexibility you must not miss. Their prime services include:
- Effective training program development.
- Workforce optimization.
- Strategies implementation.
The following table provides a breakdown of the traditional HR vs fractional HR debate:
| Feature | Traditional HR Model | Fractional HR Model |
| Staffing | Full-time HR staff | Part-time or project-based HR professionals |
| Cost | Salary, benefits, office space | Pay-per-use model |
| Flexibility | Limited | Highly scalable |
| Expertise | May have limitations | Access to diverse skill sets |
How Fractional HR Supercharges Your Business
Fractional human resources clearly differ a lot from traditional human resource departments. However, the main question that arises with respect to this is whether fractional HR can deliver the results you need regarding business efficiency. It appears that the answer to this is a yes. This is evident through the fact that nearly 80% of businesses outsource at least one HR service.
Here are the benefits of fractional HR service:
1. Scalability and Flexibility
As your company grows, so will its HR needs. Fractional HR can evolve adaptations as and when required. These HR experts offer proactive strategies to meet your needs, such as:
- Recruit expertise for a spree
- A compliance expert for a new regulation
- HR support like talent management and employee relations
This way, you can access a wider range of skills and industry best practices.
2. Cost-Efficiency
Traditional in-house HR departments come with a hefty price tag. Salaries, benefits, office space – it all adds up. Fractional HR offers a more innovative solution. It allows you to only pay for the HR expertise your business requires. Studies show companies can save up to $15 million annually by switching to fractional HR. That’s real money you can reinvest in growth initiatives or employee well-being.
3. Streamlined Processes
Fractional HR isn’t just about cost savings. These experts bring a fresh perspective to your organization. They can identify inefficiencies in your current HR processes and thus recommend tech solutions to streamline everything. Not only this, quality HR automation can also elevate the experience of your employees.
According to one study, automated HR processes enable:
- Access to better information.
- Better internal reporting on the scale to the line manager.
- Optimal transfer of information for workflow-based access.
- Greater clarity of merit, excellence, and goal attainment.
This frees your internal team to focus on core business activities that drive growth.
4. Data-Pro Decisions
Fractional human resources consultants specialize in HR analytics (amongst many other services). They offer expertly-toned services that let you use your workforce data to its full potential. This allows you to put trends into action, which can then help you make evidence-based decisions.
These experts are equipped to use data to help tailor compensation packages, enhance training programs, or forecast future pockets of attrition. All of this results in higher profitability.
5. A Winning Work Culture
Your company culture is very important because it is what helps build the pillars of how exactly your organization functions. Negativity within an environment is the number one cause of disengaged employees which results in high employee departures.
Employing Fractional HR experts can help you deal with the management area of your company. These experts have experience in crafting a culture that resonates with your employees. This way, you can create a positive work environment that attracts top talent, boosts morale, and drives superior performance.
6. Higher Talent Retention
Fractional HR goes beyond simply hiring qualified individuals. Their expertise ensures that you are able to retain high-performing employees who are often crucial to your success. Techniques like implementing quarterly modern performance reviews shift the focus towards growth and development.
This promotes a sense of engagement and purpose within your workforce, leading to a more efficient, productive, and loyal team.
Should Your Organization Leverage Fractional Human Resources?
When determining whether your company needs fractional support, you must consider a few things. For instance, consider whether your company is in a growth phase where a flexible HR solution might be the perfect fit. Here are a few things you can ask yourself:
- Is your HR organization unable to keep up?
- Is your HR team struggling with high turnover rates?
- Do you frequently find yourself in need of additional HR expertise?
If you answered yes to these questions, your company could greatly benefit from fractional human resources.
Checklist for Hiring the Right Fractional HR Professional
Transitioning to fractional human resource services can be a game-changer for your business. However, selecting the right fractional HR professional requires careful consideration. To help you make an informed decision, here’s compiled a list of essential tips you can follow:
Tip 1: Likability
Choose someone you genuinely like and feel comfortable with. Ensure that this person is supportive and empathetic.
Tip 2: Relevant Experience
Look for someone who understands your company’s size and stage. Their experience with businesses like yours can bring valuable insights.
Tip 3: Necessary Skills
Ensure they can tailor their services to your needs, such as developing training programs for employees to build essential skills.
Tip 4: Client References
Talk to their current clients to understand their working style and how they handle challenges.
Access the Full Potential of Fractional HR with Guide to HR
Fractional human resource experts not only give you HR expertise but they also consider the exact time at which you require these services. Now, you can tackle HR challenges with confidence and free up your time to focus on what matters most – growing your business.
Don’t let HR challenges hold you back. Let Guide to HR help you with your HR department. specialize in connecting companies with the perfect fractional HR experts. Our experts are packed with all the information you need to select the right HR support for your business. Our resources cover everything from understanding the benefits of fractional HR to finding the best professionals in the field. Contact us today.
FAQs
1. What is a Fractional CHRO?
A Fractional CHRO is an experienced HR executive hired part-time or for specific projects to act as your CHRO, providing leadership, strategy development, and change management expertise.
2. How long does a Fractional HR executive work for an organization?
The timeline depends on the terms of the contract agreed upon. Often, fractional contracts define minimums for the hours or week/month.
3. What is a Fractional Employee?
The word ‘fractional’ means part-time. A fractional human resource employee might work 5, 10, or 20 hours per week, often for multiple companies.
4. How can I ensure a smooth onboarding for a fractional HR expert?
To facilitate a smooth transition, clearly define the partnership’s goals. Foster open communication to create a collaborative working environment.
Resources:
https://www.pnihcm.com/blog/fractional-hr-support
https://www.linkedin.com/pulse/6-reasons-hire-fractional-hr-your-business-jacquelyn-gernaey
