What are fractional roles and how can they benefit freelancers?
Learn what fractional roles are and how they help freelancers and consultants win higher-paying, strategic work. Explore the differences from contracting, key benefits, risks like IR35, and how to position yourself for this growing trend.
How you define yourself can have a big impact on your self-employed career. Most people have an idea of the difference between contractors, freelancers and consultants. But it can be hard to know whether new job titles can help you attract more clients or increase your rates. So, what are fractional roles and how can they benefit freelancers?
What does fractional mean in a job title?
The lines between freelancing, contracting and consultancy have always been blurred. Contractors will more often work full-time for a single client on a full-time basis, while freelancers and consultants juggle multiple client projects or provide ad-hoc support.
Fractional working means working across companies and businesses part-time, integrated within the company at a normally senior leadership level rather than as an external resource.
It’s different from an Interim role, as it tends to be ongoing rather than for a fixed period, and it’s normally more about strategic leadership than filling operational responsibilities.
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Why are fractional opportunities a growing area?
Many freelancers and consultants have essentially worked in a fractional way for years, embedded in their client teams and taking on many of the responsibilities of a manager or employee.
But the specific term has really exploded in use over the last five years in the U.S and more recently in the last couple of years in the UK and Europe.
The growth has come from small businesses, start-ups and scale-ups who can benefit from the skills and experience of senior leadership but don’t have the time, resource and budget for a full-time role. That’s why many fractional roles cover positions including Chief Financial Officer (CFO), Chief Marketing Officer (CMO), Chief Operating Officer (COO), or Head of HR.
Smaller companies and new start-ups typically need to move quickly, often in a constant pursuit of growth and funding. And with the increased use of AI and automation, it’s likely more businesses will be trying to keep their headcount as small and efficient as possible.
What are the benefits of fractional roles?
As a consultant or freelancer, you may have already enjoyed the experience of working with clients on a more integrated and ongoing basis.
One of the biggest problems coming into project work as an external resource can be having a limited impact because you don’t have enough influence within the business, the authority to make immediate changes, or the knowledge of who to speak with to get things done.
The big advantage of fractional roles is that you’re more integrated into teams from day one, giving you more access and trust.
By positioning yourself as a fractional specialist, you’re also more likely to be hired by smaller start-ups and similar businesses. If you like working in early-stage companies and helping small teams to grow, then it’s going to help you find similar clients.
And you may be able to use it to get a slight pay bump and a move into more strategic roles while it’s an in-demand term. If you have relevant, demonstrable experience, you can be rewarded for that by companies that will happily pay thousands for your insights rather than six-figures for a full-time senior appointment.
There’s also more stability in work and income, with ongoing regular payments and more visibility of upcoming tasks and projects.
The downsides for freelancers and consultants
There are some disadvantages to securing purely fractional roles. The main issue is that being involved as an employee means it can be hard to switch off, especially if you’re managing multiple clients.
You can also find yourself more involved in handling day-to-day operations rather than being able to stick to strategic advice. Or trying to effectively give a full-time commitment and output for part-time pay unless you can maintain strict boundaries.
And obviously you aren’t entitled to any employment benefits, including holiday and sick pay. Which is one of the key attractions for employers. But it can mean you find yourself working without a break while your employed colleagues are taking multiple vacations throughout the year.
It also means that you can become much more attached to your current clients. Taking on new opportunities can mean ending existing agreements. You can also find yourself relying on just one or two main clients, which can be a big problem if those contracts are ended at short notice and you haven’t got new projects or clients already lined up.
The IR35 risk
Taking on fractional roles means understanding the requirements and risks of IR35 legislation, which was brought in to try and stop ‘disguised employment’. And if you’re working with small UK businesses, you’ll be responsible for assessing your IR35 status.
That can mean extra costs to ensure whether you’re working inside IR35 or outside it. And even medium or large-sized businesses can include an indemnity clause in contracts, requiring you to reimburse them if HMRC determine there’s a need to pay Income Tax and National Insurance.
For more details, we have a full guide to IR35. And IPSE members can get free IR35 reviews from our insurance partners, Qdos.
Should you rebrand yourself as a fractional freelancer or consultant?
The decision to call yourself a fractional specialist or to pursue those types of roles will depend entirely on your personal ambitions and preferences.
If it’s a type of self-employed work that you prefer, then it makes sense to take advantage of the current growing trend. And you can always take on project-based work at the same time to provide some balance.
You can get started with a simple list of actions:
- Audit your experience: Have you got enough skills and history in relevant areas?
- Update your website and social media profiles: You can choose to rebrand everywhere, or start by testing a profile change on LinkedIn to see how that impacts enquiries
- Change what you offer: A lot of freelancers and consultants are successful by targeting a specific niche, but it’s also worthwhile to focus on specific stages in business growth (e.g. Fractional CMO for Seed-Stage SaaS companies looking to scale from $1M to $10M.)
- Define your operations: You’re responsible for bringing processes rather than following them. Having a “First 30-60-90-day roadmap” helps potential clients understand what you’re bringing to their business
- Connect with other fractional leaders: Networking is important for anyone that is self-employed, and connections with other fractional specialists means more opportunities for referrals and collaborations.
- Define success: You’re not being hired to complete a task, but to deliver results based on your processes and systems, often to then hand everything other to a full-time replacement or a more junior member of staff.
Ultimately any freelancer or consultant can find themselves in a fractional role, either intentionally or as a project-based relationship involves. And understanding the advantages and pitfalls can help you manage a more integrated position successfully, leading to more opportunities in the future.
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