This article was co-authored by Teresa Foltz, vcfo Houston Senior People Operations/ HR Consultant, and Paul Hagerty, vcfo Dallas Senior People Operations/ HR Consultant.
Outsourcing HR – 8 Benefits of Virtual or Fractional HR Leadership
Employees have always been a company’s most important asset, but the events of recent years have driven that point home in a bigger way than ever. The need for effective HR processes and oversight has elevated to ensure that employees remain engaged, productive, and supported. Businesses must remain compliant with regulatory standards, as well as competitive in attracting and retaining key talent.
Junior HR staff or multi-purposed employees alone cannot be expected to address, or even be aware of, all the HR elements an organization needs to address to grow effectively and avoid missteps that can bring significant financial impacts. Many businesses, however, are not at a stage where they can bring on a full-time senior HR professional. To bridge this gap, organizations are calling on fractional HR leadership.
Here, we look at eight benefits that fractional HR leadership provides to a wide range of businesses.
1. Tailored Support for HR Pain Points
As companies grow, so too does the range of HR functions and services that they need to provide. The basics of getting new employees onboarded and ensuring that paychecks go out on time may be fundamentally covered, but bandwidth and strategic expertise for other pressing HR needs often does not exist internally. Needs could include providing HR system support, launching training and development programs, drafting comprehensive employee handbooks, ensuring compliance with the myriad of labor laws and much more. In fact, a company might want to start with an HR assessment exercise to determine where they have gaps. Whatever the pain point may be, using a fractional HR professional allows companies to tap expertise on an as needed basis and focus it precisely where it’s needed.
2. Strategic HR Expertise
Growing businesses should focus on the strategic importance of HR and not just the tactical necessities. Strategic HR approaches people and resource management with a future mindset that looks not just at where the company is but where it wants to go. Examples include ensuring a sufficient pipeline of job candidates, informing compensation policies, driving performance management processes, and building retention programs. A fractional HR leader can guide these initiatives effectively.
3. Awareness of Compliance Obstacles
In many cases, non-HR professionals do not have full awareness or understanding of all the regulatory requirements and standards that apply to their business. For example, in a recent project we supported we discovered that 48% of the company’s I-9 forms were not in compliance. Issues like these can bring significant fines and even jail time if a company is held to have been willful in allowing the oversight. A seasoned HR leader will have a deep understanding of these issues and can apply process refinements to prevent them from occurring moving forward.
4. Practical Experience and New Perspectives
Bias is a natural occurrence in every person. Fractional HR leaders provide objective viewpoints and new perspectives that aren’t clouded by internal norms and dynamics that others must contend with. An effective fractional HR leader will ask lots of “why” questions to understand the outcomes that an organization wants to achieve and then recommend actions to strengthen the business and better support the achievement of those outcomes.
5. Right-Sized Pricing and No Commitment
One of the most attractive benefits of partnering with a fractional senior HR leader is that it means a company can access necessary expertise without the expense of hiring a full-time senior HR leader. The business only pays for the services when they need them. Additionally, when growth milestones or other circumstances compel a shift in approach, the company isn’t locked into a single internal resource.
6. Scalability of Staff and Services
The scope of a fractional HR partnership can expand or contract as needed. For some, a relatively small number of hours per month may be needed to support one or a narrow range of items, while others may need broader support and advice for a defined period. Some companies will never need a full-time strategic level HR resource internally. Others will. When the time comes to bring on a permanent senior HR leader internally, the fractional HR leader can assist with the hiring and onboarding process to ensure the organization gets the leader they need and to set that new person up for success.
7. Mentorship and Guidance for Junior HR Staffers
Junior HR staff can get overloaded very easily. A fractional HR leader can support them by taking ownership of higher-level HR initiatives, pointing out pitfalls to avoid, and advocating on their behalf with the executive team. Stress is removed from the equation because junior staffers no longer feel that they alone are carrying the burden of covering all the HR bases, and executive teams get peace of mind in knowing that the senior HR leader adds an expert eye that keeps them moving safely in the right direction.
8. Access to Diverse Subject Matter Experts
Professional services firms like vcfo that have a wide range of HR leaders from diverse backgrounds give organizations unique access to specialized knowledge and expertise. This could include experience working in a niche industry, managing specific compliance issues, implementing innovative benefits strategies, forming succession plans, and more. In essence, the fractional HR leader can tap into specialists among their colleagues when needed to strengthen approaches, inform plans, and solidify outcomes.
Fractional HR Leadership Moves Businesses Forward
The importance of having effective HR processes and leadership within a business has never been higher. Having a handle on basic HR tasks such as completing forms, managing time and attendance, and coordinating payroll is table stakes. So much more is required from HR if companies wish to continue growing while avoiding the risks that come with reaching new milestones. Fractional HR leadership provides strategic insight and advice that positions the company for success at every stage.
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