When the Going Gets Tough, Go Fractional

Pandemic, Skilled Labor Shortage, Economic Uncertainty, … It Is a Fit Every Time

“I got something to tell you

I got something to say

I'm gonna put this dream in motion

I Never let nothing stand in my way.”

from When the Going Gets Tough by Billy Ocean

I get asked quite often about the state of the Fractional Industry and what I am seeing on the supply and demand side. My answer runs the risk of being self-serving, and at the same time, as an industry, I feel we need to tell the story. If we don’t, who will?

On the SUPPLY side, I and others who have been in this space for a while are currently seeing an increase, maybe even a temporary oversupply. Companies jumping on the bandwagon of layoffs and the post-Pandemic return to business-as-usual in corporate America have many executives looking into alternatives.

Most Fractional Executives are experienced and highly qualified with the skills and abilities to deliver an immediate and lasting impact: “been there and done that.” They thrive on variety, delivering value, complex organizational challenges, and situations requiring the management of change. They end up choosing ‘Fractional’ as their career; they choose independent employment in the growing gig economy.

I believe the increase is temporary, though. The demand will catch up, and those less successful selling themselves as Fractionals will return to the W2 job market. Being a Fractional takes certain additional talents, among them stick-to-itiveness and determination. For the most part it is not a short-term fix or a temporary plug with instant gratification.

The DEMAND side is on a more steady path and continually growing. Recent, current, and future disruptions of the business-as-usual will highlight the benefits of Fractional Executives again and again and hence proliferate the role.

The Pandemic

Fractional executives already experienced somewhat broader recognition and a boost in opportunities during the 2008 financial crisis. The pandemic resulted in yet wider acceptance of remote, part-time work.

COVID-19 was a fundamentally new experience for all companies, and as restrictions shut down business-as-usual, companies responded with several strategies, some that worked and others that did not; some that were new and innovative and others that reflected the tried-and-true:

• Layoffs.

• Hiring Freezes.

• Work from home.

• Taxpayer-funded support programs.

• Furloughs – temporary, non-permanent layoffs.

• and … Contracting.

Once the initial shock of the previously unknown had passed, contracting the necessary skills, especially on a fractional basis, provided the alternative to hiring.

Skilled Labor Shortage

Just a year ago, the skilled talent shortage was ever-present. At the end of 2021, Rand Europe estimated that the shortage of skilled workers in digital industries will cost the 14 largest economies in the G20 a staggering $11.5 trillion in lost GDP growth by 2030.

And last year, when demand was high and the skilled labor market was tight, fractional executives provided an additional talent pool that companies tapped into.

Economic Uncertainty

Some of those more innovative ideas used during the pandemic provide a blueprint for what to do during the current economic uncertainty. Because the often indiscriminate action of layoffs deprives companies of much-needed talent. Especially when that talent is now necessary to:

• Make the product portfolio recession-proof.

• Identify and implement additional channels to market.

• Lead a sales-driven turn-around.

• Enter new markets to spark new growth.

…and so many more steps that help companies navigate the choppy economic waters.

Fractional is the alternative to 'all or nothing.' Fractional Executives bring those much-needed talents at less than the cost of a full-time hire. They are indeed the perfect alternative, the one that can get a company out from between a rock and a hard place.

And the Future Is Positive

No matter the economy, fractionalizing work at the executive level allows for a different growth model. Instead of staffing up in large steps, the necessary talent and skills can be added sooner and in the right increments. Founders and owners of a business do not have to wait until they can afford the fully loaded cost of an executive.

And the result of taking smaller steps is not just equal, but it leads to faster growth:

• The right skills are in place just when you need them, not when you can afford them.

• There is no loss in productivity due to multitasking or suboptimal talent.

• At any time, the skills can be right-sized for the needs of the business.

Overall, the future of talent management and, with it, the success of companies will hinge on the ability to be more tactical and selective.

Contact us if you would like to explore the option.

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Photo by the Author