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What the Heck is Fractional HR? And How Does it Benefit Your Small Business?

In today's hectic and ever-changing business environment, small businesses and startups are constantly in need of new solutions to streamline their operations without sacrificing quality or overextending budgets—enter the concept of fractional services 💥

Fractional services can come in many different shapes and sizes - fractional HR, a fractional CFO, fractional IT support... the list goes on.

But what exactly do we mean when we say fractional services? Why is the term gaining popularity? And how can it benefit your small business? Let's break it down and guide you through the benefits of integrating a fractional contractor or consultant into your team.

What is Fractional HR?

Fractional HR refers to hiring an HR professional on a part-time contract basis to manage and oversee some or all of your business' human resources needs. Unlike traditional, full-time HR roles, fractional HR professionals provide their expertise to a number of different companies, offering a little bit of their time and skills to each. This model gives small businesses access to seasoned HR expertise without the commitment of a full-time salary, making it a super cost-effective solution for businesses who likely do not yet need full-time HR support.

Who doesn't love a little extra cash? 🤑

A piggy bank filled with cash

So, What's the Difference?

You may be wondering, what's the difference between fractional HR and outsourced HR? Or what about just hiring a classic HR consultant or advisor? Let's clarify.

Outsourced HR typically involves fully relying on an external firm for specific functions within your business. Common examples include outsourcing your payroll or benefits administration. This arrangement often serves as a replacement to having anyone internal handle the entirety of these specific functions.

On the other hand, HR advisors or consultants tend to be experts hired for specific projects, providing external advice. Their involvement usually has a defined end date, and they do not typically embed or communicate with others on your team.

Fractional HR, in contrast, involves a professional who tends to provide ongoing HR support on a part-time basis. Unlike outsourced HR or consultants, fractional HR professionals are more hands-on and integrate closely with their client's company, adapting to its unique culture and needs.

Benefits of Fractional HR for Small Businesses

Expertise on Demand

Most small businesses don't need a full-time HR hire, but that shouldn't mean the business owner or office manager is stuck with those people-related tasks. Fractional HR provides access to an HR pro who brings a wealth of knowledge and experience from various industries and businesses. This expertise helps in navigating complex people-related issues, ensuring compliance, and implementing best practices tailored to your business.

Cost Efficiency

As you've hopefully already seen, fractional services provide significant cost savings compared to hiring a full-time employee. You pay only for the services you need, when you need them, optimizing your budget. Bonus—using a contractor over an employee means you don't have to pay for time off, benefits, severance or leaves either 🎉

Scalability and Flexibility

As your business continues to grow, your people needs will evolve. A fractional HR professional can scale their services up or down based on your current requirements, providing flexibility and support aligned with whichever phase your business is in.

Strategic Focus

In small business, people-related responsibilities often fall upon the business owner, or an office or ops manager. Using fractional HR frees up your time and resources so you can instead focus on core business activities, growth and strategic initiatives. With a trusted HR expert handling your people ops, you can concentrate on the stuff you love.

Customized Solutions

Every business is unique, and fractional HR professionals understand this. They offer personalized HR strategies and solutions that align with your values, culture, and goals.

Risk Mitigation

Navigating employment laws and regulations can be daunting. Fractional HR professionals are better suited to stay up to date of relevant legal changes, ensuring your business remains compliant and mitigating potential legal risks.

How to Implement Fractional HR in Your Business

Embracing fractional HR starts with identifying your specific needs. Whether it's recruitment, setting up a new HR system, compliance, performance management, or terminating an employee, a fractional HR firm like Chase & Co. HR can tailor a package that suits your business perfectly. From there, we work closely with you to integrate seamlessly into your daily operations, becoming your dedicated and cost-effective people ops partner, allowing you to focus on what you do best—running your business.

Interested in learning more about how fractional HR can benefit your business? Get in touch to schedule a complimentary consultation call.

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