What is Fractional HR? When to Hire One For Your Startup

You don’t necessarily need a full C-suite team to get off the ground. Early-stage companies are moving faster than ever by hiring fractional leaders who bring years of experience and offer startup-friendly pricing for their services.

You can hire a fractional CMO to lend their marketing smarts, a fractional CFO to manage the books and steer the financial ship, and yes, even a fractional CHRO to drive your people strategy.

That last one often flies under the radar, but believe me, the investment is well worth it.

I’ve worked for over a decade across 150+ startups as a fractional HR leader, and in this article, I’ll break down what fractional HR is, how it compares to other common outsourcing options, and how to hire the right person/firm for your company.

Your Options for Outsourcing HR

Let’s be honest, HR is rarely the first choice for building a team. At least, that’s the case for most startups I’ve worked with.

I get it. You need a product that can compete in the market, a sales team that can hit the pavement and sell, and a marketing team that ensures your message is heard loud and clear.

But let me be clear: HR plays a role in how those above jobs are filled and put in a position to succeed, so you can’t wait around for the magic moment when you feel you have enough PMs, engineers, or BDRs to find time to care about HR.

That doesn’t mean that you need to staff your HR team before building a product or marketing team. In fact, for most early-stage companies, I recommend outsourcing HR to overcome the initial hurdles of growth and product-market fit.

The most common options for outsourcing will be:

Professional Employer Organizations (PEOs): These are third-party providers that handle basic HR administration, including payroll, benefits, and compliance with labor laws.
Business Process Outsourcing (BPO): These are independent consultants or specialist practitioners who can lead specific projects, like conducting audits or building your HR infrastructure and tech stack.
Staffing agencies and recruiters: One of the most common roles to outsource, Recruiters and staffing groups source, screen, and sometimes onboard job candidates.

These are fine solutions, but they’re specialized point solutions. What if you need someone to take a strategic role as well as tactical? That’s where hiring a fractional HR leader comes in.

What is Fractional HR?

A fractional HR leader is an experienced professional who brings the strategic insight of a seasoned HR executive without the cost or commitment of a full-time hire.

You’ll hear all sorts of advice on when and how to hire fractional leaders; as someone who’s actually done this for over a decade, I recommend hiring when your startup has fewer than 50 employees BUT has the revenue and resources to justify the hire and support your team’s growth.

That’s because this is a pivotal and growth-enabling function for your company. A fractional HR leader acts as an extension of your team, often serving as a de facto head of HR. They can help shape culture, structure the organization, ensure compliance, and guide the employee experience to build your startup’s HR strategy while also handling the day-to-day operations.

In the early stages, this model gives you a ton of flexibility to scale HR as your needs change, while also bringing experienced leadership to your team. HR often needs to be the “adult in the room,” which is why the ability to hire someone with a career’s worth of experience can be so helpful.

What Fractional HR Leaders Do

The beauty (and trouble) of answering this question is that it varies from person to person.

Some fractional HR leaders might specialize in one specific area, for example, people strategy or workforce planning. Others might go broad, covering a range of functions. Just as you would with any other hire, it’s important to start with your needs and work backward to find the candidate who best meets them.

I can’t speak for every fractional HR leader out there, but I can share what I do for clients.

Clients have hired me on a part-time basis, and I would either guide them or do work for them to build their HR functions. This has covered a wide range of jobs (and plenty of horror stories), but here’s a general sense of the type of work I’ve done:

Developed a workforce planning strategy.
Built a talent pipeline to hire external talent and develop internal talent.
Designed a scalable benefits strategy that motivates employees while fitting within the budget.
Built an employer brand to attract and retain top talent.
Helped staff and train an HR team to replace me.
Determined which technology to choose and implement within the HR department.
Designed org structures for companies as their needs changed at different stages of growth.
Defined the jobs the company needs and clarified the scope of work, accountability, and authority for each one.
Helped redesign how work actually happens across the org, down to designing individual processes in collaboration with leadership.

I’ve helped clients scale their teams to unlock a new stage of growth, out-hire their competitors in new markets, and cut costs while streamlining operations.

Nowadays, I offer consulting services and fractional leadership on fixed engagements of at least three months. During that time, I worked with startups on the following:

Audit their entire HR operations
Develop a multi-year people strategy to drive growth
Design and implement people programs to improve employee engagement
Coach managers on how to identify, grow, and elevate talent in the company
Assist with hiring, training, and onboarding a full-time HR replacement

You can learn more about my fractional HR consulting services here.

How Fractional HR Consulting Differs From Outsourced Models

The key difference, as I see it, between fractional HR leadership and the other outsourced models I mentioned above is the scope of services and the degree to which the provider is embedded in your organization.

If you hire an outsourced staffing agency, they are qualified to help with one thing: staffing. If you hire a BPO, there is a limited scope that they are capable of working within. And if you hire a consultant, you’ll get a nice thick packet filled with ideas, but not much else.

A fractional HR leader will give you advice, but also be accountable for how their advice is implemented and how successful your company is. While many consultants do a great job of talking the talk, fractional leaders need to walk the walk as well.

When I work with clients, it’s usually from a strategic vantage point within the company, looking much more broadly than at a single HR function. In my experience, taking a narrow view of HR often leads to common people problems that can sink a company. Executives often make the mistake of seeing HR as “just hiring” or “just people management,” and miss that HR done well can drive real business results.

The short of it is, fractional HR consulting is a more strategic function within your company and an extension of your team, rather than a hired hand for a clearly defined job.

The Benefits of Hiring a Fractional HR Leader

I touched on this above, but it’s worth repeating the benefits of choosing a fractional HR leader over other common outsourcing options.

A fractional HR leader can bring your company:

Experienced leadership: I’m sure many of the outsourced firms are great, but in my experience, those who choose to work on a fractional basis often have a career’s worth of experience that they can bring to their clients. Unlike other outsourced models, they’re also not afraid to get their hands dirty with implementation.
A fraction of the cost: It’s in the name! A Chief People Officer could make up to $400,000 in the United States, but you could hire a fractional leader for as little as $5,000/month. For startups on a shoestring budget, fractional is the way to go.
A good blend of strategic and practical: In my experience, most fractional leaders tend to bring a good blend of strategic high-level POVs with hands-on practical experience. In startups, you need a mix of both to survive.

It’s not that a fractional HR leader is the only choice you can make, or even always the best choice. For startups looking to grow quickly and sustainably, I find a fractional HR leader invaluable.

When to NOT Hire a Fractional HR Leader

On the flipside, here are signs that a fractional HR provider isn’t the right choice for your company:

You have basic HR needs: If your company is only interested in doing the work that “keeps the lights on,” like compliance, payroll, benefits, and employee relations, then a fractional HR leader will provide far more than necessary.
Limited budget for investing in people: A qualified fractional CHRO will come in and make recommendations that may require short-term investment, leading to greater cost savings or enabling higher revenue growth. If you’re not willing to “improve” your people operations, then you’re wasting your money with a fractional HR leader.
You want someone to execute, not strategize: If you want someone to execute on the CEO’s or founder’s vision, then fractional HR isn’t for you. You need to recognize that HR is not your area of expertise, so if you’re not willing to let someone with a track record of success do their thing, then you’re better off not engaging a fractional CHRO.

What to Look for in a Fractional HR

Even though this is a part-time hire, they will have a significant impact on your company’s trajectory. Given that, I recommend prioritizing:

Deep HR and startup experience: Choose someone who’s built or scaled HR inside a startup before. They’ll understand the pace, the resource constraints, and how to balance structure with flexibility.
A strategic mindset: Look for someone who anticipates challenges and designs HR solutions that scale with your business. This should extend beyond HR, by the way; you need someone who understands the market, customers, and competitive landscape, too.
Alignment with company values: You need a leader who embodies your company’s values from day one and actively protects and fosters the organization’s culture.
Executive presence: Look for someone who can communicate and work with your CEO. The best fractional leaders are elite communicators who can articulate HR strategy and initiatives to founders, managers, and employees.
Business acumen: Look for a fractional hire who is a business person first and creates value through HR. I recommend looking for someone who understands the entire business, how everything works, and can deliver impact across the business, not just within the people operations function.

The most successful founders treat HR as fuel for growth, investing in both the right people and outsourced partners as they scale.

Take the Next Step: Organize Your Startup’s Chaos and Start Driving Growth

Of the 150+ startups I’ve worked with, many have been excellent at product development, sales, and distribution, but completely flat-footed when it comes to their people strategies.

Whether it’s trouble attracting talent, getting bogged down in compliance, or reacting to each weekly fire, these companies are succeeding despite, and not because of, their HR functions.

It doesn’t have to be this way. In fact, with the right HR strategy, growth can be easier.

That HR strategy doesn’t happen by accident, though. It comes from years of experience, knowing exactly what levers to pull and buttons to push within an organization. Since 2011, I’ve worked as a fractional HR leader for 150+ companies worldwide. I’ve helped these companies scale from seven to nine figures all through HR, and I can do the same for your organization.

If you’re ready to organize your company’s chaos and unlock the next phase of growth, click the button below to see how I can help.

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