Human capital is the backbone of any business and the driving force behind its success. Managing these resources effectively is essential for ensuring the productivity, morale and long-term growth of an organization and in attracting and retaining the best talent.

Traditionally, Human resources (HR) functions have been fulfilled in-house with businesses hiring full-time staff to oversee functions such as recruitment, compensation and benefits, and employee relations. However, in recent years, a trend has emerged that sees businesses hiring HR professionals on an as-needed basis and for a fraction of the cost, spawning the term ‘fractional HR.’

In this article, we will explore some of the benefits that fractional HR services can offer a business, helping you assess whether this approach could align with your organizational needs and goals.

Cost Savings

With an average salary estimated to be $154,740 per year, the cost to a business of hiring a full-time HR manager is substantial. In addition to their base salary, additional expenses such as benefits, overheads, and onboarding costs must also be accounted for.

Fractional HR provides businesses with the HR expertise they need at a fraction of the cost of hiring a full-time manager or HR team. This is especially beneficial for small and medium-sized enterprises (SMEs), enabling them to dedicate more of their funds to revenue-generating areas of their business.

Expertise

Fractional HR professionals have extensive experience in a range of practice areas and industry sectors. Businesses can leverage this specialized expertise to tackle specific HR issues such as talent acquisition or performance management, enabling them to tailor their HR solutions according to their specific needs.

This business model also allows SMEs to access a pool of experts that may otherwise be financially prohibitive, allowing them to address complex or unique HR challenges in an affordable and effective way.

Flexibility

A full-time HR professional or HR team may not always be necessary for many SMEs, especially in their infancy. By utilizing the support of a fractional HR service these businesses can receive the support they need according to their needs, engaging long-term support over time.

This business model also assists businesses as they grow or adapt to changing circumstances, as it allows them the flexibility to scale their HR resources to meet evolving needs without the long-term commitment of hiring full-time HR staff.

Fresh Perspectives

Businesses can greatly benefit from introducing an outside perspective into their operations. This is especially so when businesses become too insular in their focus or fail to spot opportunities for innovation and growth, resulting in an organizational myopia. 

By hiring the services of a fractional HR professional, businesses can gain insights and objectivity into various aspects of their HR management that they may otherwise have overlooked. Whether it’s targeting and hiring the best talent or introducing training programs that help employees develop their skills and boost their morale and confidence, fractional HR professionals can empower businesses to identify the blindspots in their HR strategies and implement optimal solutions to address them.

Fractional HR can offer businesses a flexible and cost-effective approach to address many of the HR needs and challenges they face today.

Guest writer.