Employing fractional talent: Is it right for your organization?

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Print this page by Rachel Bender Meyer

Virginia’s unemployment rate has declined from this time last year, currently hovering at 5.6 percent.  Employers, however, still are hesitant to bring on additional full-time, permanent staff for fear of having to lay them off. 

The past few years have been very tough, and no one wants to be in the position to have to let a new hire go because corporate revenue did not meet expectations.  As a result, many organizations have turned to the model of “fractional talent”, more commonly known as interim, temporary or contract talent.  In fact, the 2011 McKinsey Global Institute U.S. Jobs Survey of 2,000 employers found that 34 percent expect their companies to use more temps during the next five years.  So, how do you know if a fractional type of staffing model is right for your organization’s needs?

Benefits of using fractional talent

One clear benefit of using fractional talent is lessening the risk of hiring someone full-time when you are not sure if the workload warrants a full-time hire.  The beauty of fractional talent is that you employ workers only for as long as you need them.  This flexible staffing model allows the employer to meet technology needs, handle seasonal increases in workflow, complete specific projects or fill a gap until a full-time employee is hired.

Many employers hire fractional talent on a full-time basis after they have worked with them for a period of time.  In this scenario, the company is able to “try before you buy.” The trial period ensures that, in addition to having skills that meet job requirements, workers also are a good fit for the company’s corporate culture.

Many times companies without human resources departments depend heavily on specialized staffing agencies to assist them in filling jobs. These companies lack the internal resources to source, recruit and vet talent for the positions.  Hiring fractional talent from an agency also relieves the employer from the costs of taxes and benefits. 
Before hiring fractional talent, however, review your needs to see if employing someone on a temporary basis is the path you want to take.  Step back and take a look at your opening. 

• Do you have enough work for one person to perform on a full-time basis? 
• Do you have the money allocated in the budget to hire another full-time employee or just enough set aside to complete a project?
• Is your existing staff able to handle the current workload or are they continually missing deadlines?

Hiring someone on a project basis sometimes can assist you in building a business case for hiring additional full-time staff.  You need to ask these questions because hiring workers on a temporary basis and then making them a full-time employee can be much more costly than initially employing them on a permanent basis.

If you have enough work to hire someone on a full-time basis, then employing fractional talent may not be the best approach.  The fees for fractional talent include the employee’s and the agency’s markup as well as the “buyout fees” to convert a fractional talent worker to a full-time worker. Each agency has a “buyout schedule” or “temp-to-hire schedule,” so be sure to ask the agency for the details before engaging their services.
Once you determine you have enough work to keep someone busy on a full-time basis, you then need to determine if you have the money allocated in the budget to pay for the new role.  If there is not enough money to hire the person on a full-time basis, but there is some money in the budget to pay the person on a project basis, then fractional talent would be a great option.  While the temporary employee is working on projects, you have the opportunity to build a case for a budget allocation to hire that person on a full-time basis.  Be sure to track the results of the work performed by so you can show the impact the additional assistance had on the business.

Because of consolidations and downsizing, many organizations are working with a much leaner staff than they did in before the Great Recession.  As a result, many employees are overworked.  An overburdened staff can lead to a high level of attrition.  One way to relive the burden is to hire fractional talent to perform some work that your staff finds tedious or is beyond their skill set.  It is much easier to retain your current staff than to replace a proven performer.

Pay differences

The pay rates for fractional talent typically are higher than you would pay per hour for a full-time employee because of the temporary nature of the assignment.  For example, if you pay a full-time employee $35 per hour, then you can expect to pay fractional talent about $45 to $50 per hour.  (This does not include the agency fees/markups, which can start at 30 percent and increase from there.)  Other factors that come into play are the duration of the assignment, the client’s specialized needs and demand for this type of work.

There are many staffing agencies that can help you find the talent you need on a temporary, temp-to-hire or full-time basis.  They are specialists in the staffing industry and can consult with you to determine the best hiring model based on your current needs.  Take the time needed to assess your specific situation keeping an eye on the end result you need to meet your overall objectives.

Rachel Bender Meyer is director of HR talent for Titan Group. She can be reached at Rachel@titanhr.com..

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