People are often skeptical about the idea of bringing in fractional or interim help. You might worry that it will take too long for the person to come up to speed, an outsider won’t “get” your culture, or the work will be low quality and have to be redone later.
“In fact, the great thing about fractional HR folks is that they’re experts in ramping up quickly and customizing work for your company and culture.”
If they do a subpar job their reputation is on the line, so they are as or more motivated than your full time employees to deliver high-quality, sustainable work. If you lead a business, chances are you’ve worked with an outside law firm. That’s also a form of fractional help, and one that we’re well accustomed to using. Here are some things you may not know when it comes to fractional HR support.
You get access to incredible talent.
Some of the most talented HR professionals I know have joined consulting firms for a variety of reasons. They like the pace and diversity of work. It gives them flexibility. They’re late in their careers but not ready to retire. They have families and are looking for interesting, challenging work where they have control over their hours and schedules.
We’re fortunate to have team members who come from companies like Microsoft, Amazon, and Google, as well as those who have built their careers working with startups.
Because expert consultants have seen and done it before, they’re incredibly efficient. Consultants who work with a firm have access to lots of tools and resources as well as a group of other experts they can use as a sounding board. If they go on vacation or are out hiking with no cell reception, you’ll still have access to someone else on the team who can jump in in case of an emergency.
Fractional HR is cost-effective.
Something that I know prevents people from seeking outside help is cost, and it’s true that the hourly rate you pay a consultant is more than you would pay a full time employee. Yet, even and maybe especially in an economic downturn, fractional help can be a cost-effective solution. We often forget that the true “cost” of an employee includes much more than their base pay and can range from 1.25 – 1.4x that person’s salary.
| Full Time Employee Costs | Fractional HR Consultant Costs |
| Full time Salary, bonus, cash incentives, equity | Pay only for hours used |
| Healthcare, retirement, workers’ compensation, disability, and life insurance | NA |
| Office space and/or remote work stipend | NA |
| Laptop plus other supplies and equipment | NA |
| Vacation, PTO, and other paid leaves of absence | NA |
Use this table to create your own cost calculator.
Even if you have HR on staff, you might still need help.
Growing startups usually have someone on the team covering HR. It might be a recruiter, bookkeeper, executive assistant, or office manager. Likely, that person is pretty busy with their day job and doesn’t have all the expertise you need to get your HR basics (employee handbook, policies, onboarding, etc.) in place. They may enjoy doing HR in which case the fractional consultant can act as a coach and mentor. Or if they’d rather delegate it all, they can do that too. The person responsible for HR is typically managed by a CFO or COO who also has a busy day job. Maybe that person is you.
How do you know when you need more HR help?
Your HR to-do list is growing and there’s no one to tackle it. I call this pent-up HR demand.
There’s also no one with the time and expertise to take a strategic, proactive approach to creating a people and culture roadmap and list of priorities. Whoever is covering HR is likely more than ready to hand it off and get back to their day job. These are all strong indicators that it’s time to get some help.
You should use fractional HR when:
- Your current HR person/team is overwhelmed and can’t meet all of their goals.
- You need an HR thought partner who can work independently, but you’re not ready to hire your first head of people.
- You need better interviewing, hiring, and onboarding to support rapid growth.
- You’ve matured to a point that employees and candidates expect you to have good medical/dental/vision benefits, 401k, and PTO policies, but you don’t have them.
- You need extra help preparing for an event such as a growth spurt, reduction in force (layoff), or IPO.
- Your HR leader has resigned or is taking an extended leave of absence and you need immediate coverage.
Remember, you can get as much or as little help as you need and that help can flex up and down week to week or month to month, providing a degree of flexibility that doesn’t exist with full time employees. Fractional consultants can complete a project then reduce hours or roll off altogether until you need them again.
Advantages of Hiring a Fractional HR Consultant
- Keep up with multi-state HR compliance.
There are lots of ever-changing federal, state, and local labor laws that businesses must comply with depending on their size and location. These include time off ordinances, wage-and-hour (FLSA) laws that govern hourly vs. salaried workers, paid parental and caregiver leaves, and an increasing number of pay transparency laws. That’s a lot for anyone to keep up with, and a good HR firm will have access to tools and information that helps them easily create compliant policies.
- Implement startup-friendly tools and automation.
HR technology has improved significantly over the last several years. Whereas in the past HR tools were mostly built for enterprise solutions, today there are countless choices for startups ranging from HR information systems (HRIS) to stand-alone tools for everything from culture and engagement to compensation, feedback, training, and pay equity. It takes time to choose and implement the tools that are right for your team and culture, so it makes sense to work with someone who’s done it before.
- Provide competitive, modern benefits.
Great benefits are key to attracting people who might otherwise choose to work with a large company. HR Consultants know how to find the best brokers who will have good plan options for small teams. They can get benchmarking data about what’s competitive in your industry and geography, then take care of vendor selection and benefits enrollment. They’ll make sure your benefits are comprehensive and include things like mental wellness, grief support, fertility, and reproductive rights.
- Get an outside expert’s perspective.
Your HR consultant has worked across industries, with companies of different sizes and stages. They’re familiar with best practices and also know how to look ahead and help you anticipate what you need to pay attention to. This expertise is invaluable when you’re a fast growing early-stage startup, and it frees up other executives to focus on product development, customer acquisition, etc.
- Define your long term HR team needs.
Early on it’s hard to define the role of HR and figure out who you need to run it. How senior should they be? How much experience do they need? Is it important that they come from a startup or is big company experience ok? An HR consultant will take care of getting your fundamentals in place. While they do that work, they’ll get a good idea of what you’re going to need next and can even help you figure out what roles you need, write job descriptions, and interview candidates.
In Conclusion
Startup execs don’t have the time or desire to become experts in all things HR, yet everything from compliance to culture is critically important in a growing startup. You want to mitigate risk, attract the best people, and create a healthy, inclusive workplace where everyone is set up for success. Whether you decide on full time, part time, or fractional HR (or a combination of all three), starting early and being intentional is always a worthwhile investment.
Need HR help but not sure where to start? Take our HR quiz here.
If you’d like to learn more or hire fractional HR help today, send us a note at info@reverbpeople.com or learn more by visiting our site https://reverbpeople.com/.
