Maturity Achieved – The Fractional Market in North America

In her insightful article published in February 2025, “Is Fractional Leadership a ‘Market?’”, Michelle Allbon posits that fractional leadership is on the cusp of becoming a well-defined market.

She outlines the essential components of a market—supply and demand, competition, pricing mechanisms, regulatory frameworks, and liquidity—and observes that while these elements are emerging globally, they are not yet fully established.

In my recent observations, centered on the United States and Canada, these criteria are increasingly being met, indicating that fractional leadership has indeed matured into a distinct market in North America.

To ascertain whether fractional leadership indeed constitutes a market in the U.S. and Canada, we must, as exemplified by Michelle Allbon, examine the foundational elements that define a market:

1.     Supply and Demand: A market requires a clear supply of services and a corresponding demand.

2.     Competition and Structure: The presence of multiple providers offering similar services, fostering competition.

3.     Pricing Mechanisms: Established norms for pricing services, allowing for comparability and standardization.

4.     Regulatory Frameworks: Institutions or associations that provide oversight, standards, and certifications.

5.     Liquidity and Accessibility: Ease with which services can be bought and sold, indicating a dynamic and responsive market.

1. Supply and Demand

The supply of fractional executives in North America has seen significant growth. According to Vendux, the number of fractional sales leaders alone in the U.S. and Canada increased from 5,000 in 2020 to 9,000 in 2024. Moreover, the broader pool of fractional executives across various functions is estimated at approximately 80,000 professionals.

On the demand side, businesses are increasingly adopting fractional leadership models. Approximately 25% of U.S. businesses have engaged fractional executives, with projections indicating this figure will rise to 35% by 2025. This trend is mirrored in Canada, where companies are embracing fractional roles to remain competitive.

2. Competition and Structure

The market for fractional leadership is becoming more structured, with the emergence of specialized platforms and firms. Organizations like Vendux and many others are creating ecosystems – Matchmakers, Marketplaces, and Directories - that connect fractional executives with businesses in need. These entities not only facilitate engagements but also contribute to standardizing practices within the industry.

The increase in organizations, as well as fractional solopreneurs going to market, has intensified the competitive scenario. Where four years ago the demand side was limited to considering one organization or solopreneur, this is rarely the case today. Most fractional engagements today are entered after considering several competing options.

3. Pricing Mechanisms

More standardized pricing is taking shape. Vendux reports that the average monthly compensation for fractional sales leaders reached $9,651 in 2024, with hourly rates averaging $213. Retainer agreements now comprise 67% of assignments, providing stability for both fractional leaders and businesses.

Increased competition, the emergence of market studies, as well as the existence of marketplaces, communities, and other networks have led to more transparency on pricing

4. Regulatory Frameworks

While formal regulatory bodies specific to fractional leadership are still developing, associations like the Fractional Leadership Alliance are stepping in to fill this gap. They aim to define industry standards, promote best practices, and advocate for the interests of fractional professionals.

5. Liquidity and Accessibility

The market exhibits increasing liquidity, with businesses able to engage fractional executives through various channels, including specialized platforms, networks, and referrals. This accessibility allows for rapid matching of executive talent to organizational needs, enhancing the responsiveness of the market.

My Conclusion: A Mature Market in North America

Considering the established supply and demand, emerging competitive structures, standardized pricing, developing regulatory frameworks, and increasing liquidity, fractional leadership in the U.S. and Canada has evolved into a mature market. While challenges remain, such as further formalizing regulatory standards and expanding awareness, the foundational elements are firmly in place. Businesses seeking flexible, high-level expertise now have a viable and structured market to tap into, affirming that fractional leadership is not merely a trend but a significant component of the modern business landscape in North America.

Contact us to find out how this market can benefit you.