The UK interim management team hosted the latest Boyden Brief of 2023 with a specific focus on ‘fractional’ roles and their increased popularity amongst clients.
In a relatively volatile and risk-free market, there appears to be a shift towards requiring the same level of experience within a smaller pay packet. As such, we wanted to explore what the interim management community felt about fractional roles and whether it would be something they would be interested in.
Fractional roles involve hiring professionals on a part-time or fractional basis to fulfill specific functions or responsibilities within an organisation. These roles are typically not full-time and are often project-based or focused on a particular area of expertise.
The potential benefits of fractional roles can include providing a more cost-effective route than hiring full-time employees with benefits, having access to specialised skills where organisations can tap into the expertise of professionals and flexibility based on changing business needs.
Although there are numerous advantages to fractional roles, we should not ignore the potential negatives compared with full time, interim management positions. Highly experienced professionals willing to work on a fractional basis may have other clients therefore the option to call upon expertise is limited to set days. Additionally, executives may not integrate seamlessly into the company's culture or processes since they work part-time or remotely. This can hinder effective communication and collaboration with the existing team.
As is traditional on the Boyden Brief, we asked our interim management community a series of poll questions on the topic of fractional roles which provided invaluable insight:
We asked interim managers whether they would consider taking on a fractional role and a resounding 87% said they would. This demonstrates the potential move to a portfolio career.
Interestingly, although 87% would take on a fractional role, less than half (44%) have done so in the 24 months. This may result from limited fractional roles in the market or interims holding out for a full-time interim management opportunity. It is important to note that we have seen an increase over the last 6-12 months so there may be a latent effect.
With our third poll question, we wanted to explore whether daily rates were affected, either up or down, by taking on fractional roles, as an interim manager’s utilisation rate may decrease over a financial year compared with full time. Interestingly, the response was 50/50. It would be interesting to explore what percentage increase or decrease interim managers would consider.
Before considering fractional roles, it is important to understand what interim managers would do with their increased capacity, as it can be challenging to work with several clients concurrently. 68% said they would work with other clients, 20% said they would take on NED or Chair roles and 12% said they would use it as free time.
Our last poll question explored whether interim managers envisaged an increase in the use of Limited companies with fractional roles as they can be treated as true ‘consultancy’ compared with a full-time position, which may fall ‘inside IR35’. A resounding 90% thought that Limited companies could be utilised more due to the nature of the engagement which may increase its popularity among the interim management community.
When considering fractional roles, there are several advantages and disadvantages to remember. The focus is on the flexibility it brings compared to the number of engagements required throughout the financial year. As a specialist executive interim service provider, it's important to be consultative when speaking with clients and provide a balanced and holistic approach. Therefore, we discuss fractional roles along with more traditional interim management requirements.