Short on time? Read this: Discover the transformative power of fractional roles in the modern business world, where part-time executive positions, like CMOs and CFOs, offer strategic business solutions with flexible overheads. A McKinsey study indicates a significant shift towards independent work, with 36% of workers now in such roles. This change addresses the anticipated global talent shortages and skill gaps in areas like data analytics, digital marketing, and cybersecurity, providing businesses with crucial agility, cost efficiency, and diverse expertise.
In the modern business landscape, the conventional reliance on full-time employees (FTEs) as the sole drivers of organizational success is evolving. According to Korn Ferry, by 2030, a global human talent shortage of over 85 million people is anticipated, equivalent to the population of Germany. This shortage could result in approximately $8.5 trillion in unrealized annual revenues.
With this looming shortage, companies are now embracing fractional roles, especially in executive positions like CMOs and CFOs, to add strategic expertise on a part-time basis. This shift, gaining momentum from pandemic-induced work changes, offers companies vital leadership while maintaining lean overheads. Reflecting this trend, a McKinsey & Company study reveals that 36% of employed workers are now independent - a significant increase from just 27% in 2016. This strategic integration of fractional roles and experts is reshaping the way work is accomplished.
Embracing the Full Potential of Fractional Expertise
The shift from an exclusive reliance on FTEs to a deliberate inclusion of fractional roles signifies a move towards efficiency, adaptability, strategic acumen and organizational agility. This innovative approach empowers businesses to harness leadership strategies and specialized expertise precisely when required, fostering innovation and achieving strategic objectives. This shift is particularly pertinent as we navigate a global skills gap that continues to widen.
Benefits of Fractional Roles
At Talent Growth Partners, we've witnessed the strategic deployment of fractional roles driving success across various sectors, from governmental organizations achieving strategic goals to manufacturing firms experiencing new growth. Leveraging fractional leadership and fractional talent has proven to be a catalyst for growth in several early-stage growth businesses as well as private equity-backed firms.
Cost-Efficiency and Budget Flexibility: Fractional roles provide a cost-effective solution, allowing access to high-caliber talent without the commitment of a full-time salary and benefits.
Specialized Skills and Expertise: Fractional experts bring niche skills that may not be available in-house, fostering leadership innovation and enabling organizations to tackle complex challenges with precision.
Agility for Business Resilience: Business needs fluctuate, and fractional roles offer the agility to scale up or down quickly, demonstrating organizational agility in response to market changes.
Diversity and Inclusion: Engaging fractional experts brings diverse experiences and perspectives, fostering creativity, innovation, and robust decision-making.
Strategic Workforce Planning: Fractional roles complement strategic workforce planning by assembling experts with the right skills for specific projects and aligning resources with strategic goals.
When to Consider a Fractional Role
Executive leaders should consider fractional roles in various situations:
| Situation | Description | Examples/Notes |
|---|---|---|
| Specialized Projects | When a specific project or initiative requires expertise that is not available internally, bringing in a fractional expert can be highly beneficial. |
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| Cost Control | To optimize costs while accessing top talent, fractional roles can be an effective way to avoid the commitment of a full-time hire. | Engaging a fractional CFO to streamline financial operations and implement cost-saving strategies during a period of budget tightening. |
| Seasonal Demands | When business demands vary seasonally, fractional roles offer flexibility in scaling the workforce up or down as needed. | Utilizing a fractional marketing expert to lead a targeted seasonal campaign, aligning resources efficiently with peak market periods. |
Addressing the Global Skills Gap
Executives across industries express concern about the skills shortage necessary to drive business objectives. Businesses, governments, and organizations must prioritize talent strategy to address this skills gap. A McKinsey report highlights that lack of career development is among the top three reasons for leaving a job. While 87% of organizations acknowledge a skills gap, only one-third of organizations have begun reskilling or upskilling according to PWC.
Recognizing this significant gap, it becomes crucial to explore high-demand skills in the current shortage - and how fractional roles can fill these gaps
In-Demand Skills for Today's Landscape
| Skill Category | Description |
|---|---|
| Data Analytics and Interpretation | Professionals with skills in data analytics, visualization, and insights are crucial for data-driven strategic decisions. |
| Digital Marketing Expertise | Skills in digital marketing, social media, SEO, content marketing, and online advertising are highly sought after. |
| Cybersecurity Skills | Experts needed to safeguard digital assets and implement robust cybersecurity measures due to rising cyber threats. |
| Adaptability and Resilience | Professionals who can navigate uncertainty and pivot are key to organizational agility and sustainability. |
| Remote Collaboration and Management | Professionals excelling in remote collaboration, effective communication, and virtual team leadership are essential. |
| Customer Experience (CX) Design | Professionals skilled in CX design and understanding customer needs are crucial for strong customer relationships. |
| Supply Chain Management | Experts in supply chain optimization, risk management, and resilience are important due to global disruptions. |
| Emotional Intelligence and Empathy | Emotional intelligence and empathy are crucial for effective leadership and collaboration in diverse workplaces. |
Unlocking the Potential of Fractional Roles
Questions for Determining Role Type
To determine whether a role should be full-time, part-time, or fractional, consider these questions:
| Yes | No | Notes | |
|---|---|---|---|
| Is the Need Ongoing? | Full-Time Employee (FTE) | Fractional | Consider FTE for roles requiring constant attention and presence. |
| Is It a Specialized Skill? | FTE or Fractional | Fractional | Fractional roles are suitable for niche expertise needed intermittently. |
| Can It Be Project-Based? | Fractional | Full-Time Employee (FTE) | Fractional experts are preferable for specific, time-bound projects. |
How Do I Know Which is Right for Me?
Choosing between full-time, part-time, or fractional roles depends on your organization's unique needs and goals. Evaluate factors like budget, project scope, and long-term strategic plans to make an informed decision. Additionally, seek input from your leadership team and experts in the field.
Still need help? Contact us for a consultation. We help business and HR leaders to solve challenges related to people planning and organizational design and would love to help!
Sources:
Harvard Business Review, "Rethinking the Full-Time Employee Model"
McKinsey & Company, "The Rise of the Agile Organization"
Forbes, "Why Companies Are Turning To Freelancers In The COVID-19 Era"
Deloitte, "Diversity and Inclusion: The Reality Gap"
Society for Human Resource Management (SHRM), "Strategic Workforce Planning"
CIO, "10 Data Analytics and BI Trends That Will Dominate 2021"
HubSpot, "The Ultimate Guide to Digital Marketing"
Cybersecurity & Infrastructure Security Agency (CISA), "Cybersecurity and Infrastructure Security Agency Strategic Intent"
World Economic Forum, "The Future of Jobs Report 2020"
Harvard Business Review, "What Is the Future of Remote Work?"
Gartner, "The Future of Customer Experience"
Supply Chain Digital, "The Top 10 Supply Chain Disruptions in 2021"
Forbes, "Why Emotional Intelligence Is Key To Success In The Digital Age"