Fractional vs. Full-Time: How to Choose for Your Firm?

The financial markets are tricky now. And without a clear view of changes to come, many organizations may struggle to build a team.

Still, some companies have talent gaps within their teams and need to find a way to fill them.

Traditionally, companies have solved the talent gap problem by directly hiring employees for specific functions.

Yet, in weighing that decision against the current unpredictability of economic trends, many hedge fund and family office leaders have turned to fractional outsourcing.

But is fractional outsourcing better than directly hiring full-time workers? Let’s dive in.

Fractional Outsourcing: What Is It and What Are the Benefits?

Fractional outsourcing refers to the practice of enlisting an external contractor or firm to handle a specific task or project rather than hiring a full-time employee.

Fractional outsourcing can be majorly beneficial to a business because it allows organizations the flexibility to bring in specialized expertise and additional resources, as needed, without taking on the responsibility or the expense of hiring a full-time employee.

Additionally, these consultants are experts at the top of their field, and this expertise lends itself to efficiency so that they can complete long-term projects or tasks in a shorter timeframe.

Benefits of Hiring Full-Time Employees

Hiring a full-time employee can provide employers with critical resources for their team. This dedication obviously benefits the business if the employer properly vets the employee and if the employee is diligent and reliable.

For that reason, it is imperative firms have a process in place to effectively evaluate the soft skills, technical skills, and managerial skills of each candidate.

In doing so, organizations ensure the candidate is a positive, long-term, and reliable hire.

The downside to a full-time hire?

There may be significant ramp-up time and onboarding tasks that need to be completed prior to the employee being fully operational and able to complete a selected project and need.

So, Which Is Better?

Should you engage in fractional outsourcing or invest in a full-time hire?

In many cases, your budget will determine what you’re able to do. But be sure to also consider the following:

• How the need originated
• Is the project short-term or long-term/ongoing that will need someone on it at all times

Give yourself time to make the best decision by weighing the need of the project, its length, ongoing resources needed to maintain it, and ultimately, how quickly you need to complete it.

Additionally, remember to examine the larger economic trends when determining whether to hire a full-time employee or an outsourced contractor or firm.

While there are certainly pros and cons to both approaches, what’s most important is to be thoughtful in your decision. (Arootah has a tool that can help with that: our Decision Matrix app.)

The Bottom Line

Ultimately, your decision to hire via fractional outsourcing or a full-time employment offer should come down to the following:

• Duration: Employers usually hire full-time employees for long-term commitments and bring in consultants for specific, short-term projects or tasks.
• Expertise: If the task or project requires specific expertise not currently available within the organization, a consultant may be a better choice.
• Cost: A consultant may be more expensive on a project basis but can be a more cost-effective option in the long run if their expertise helps the company save money or increase revenue.
• Flexibility: Consultants can provide organizations flexibility in that they can be hired and let go as needed, while employees require a longer process for hiring and release.

Arootah offers both outsourced and fractional Talent Acquisition services (Recruitment Process Outsourcing or agency) and Business Consulting to hedge funds and family offices. We have a significant roster of industry experts in all operational areas of both established and new-to-market funds, including cybersecurity, operations, and compliance. If you have identified talent gaps in your organization and you don’t have the manpower to fill them, learn how we can bolster your abilities and support your business to achieve peak performance with a free, 30-minute strategy call.

Disclaimer: This article is for general informational purposes only and does not constitute legal, investment, financial, accounting, or tax advice, or establish an attorney-client relationship.  Arootah does not warrant or guarantee the accuracy, reliability, completeness, or suitability of its content for a particular purpose. Please do not act or refrain from acting based on anything you read in our newsletter, blog, or anywhere else on our website.