Advantages of Fractional HR

In this article, we explore the advantages that businesses can gain from a fractional HR service, and highlight the key differences between Fractional HR and HR Outsourcing

By David Bradshaw, Chief Executive Officer
18th February, 2022
David is a highly experienced consultant specializing in business strategy, lean operations/automation, and human resources. He holds a Master's degree from the University of Cambridge, UK, and an MBA from Quantic School of Business and Technology.

A Fractional HR service provides your business with a dedicated HR professional (or team) on a flexible, part-time basis. It is a special type of HR outsourcing which has some key advantages over the traditional model. Learn about the key differences.

What is Fractional HR?

The Fractional HR service from NorthstarPMO is designed for small to medium sized companies without an internal HR team. Many of these organizations do not need a full-time HR department, but all SMEs need to pay attention to important issues such as staff relations, payroll, benefits, training, issue resolution and legal compliance.

Fractional HR services provide your business with a trusted HR professional (or team or professionals), on a flexible, part-time basis. Your Fractional HR team acts as your in-house function, in that it will proactively work on your behalf to ensure your business and its employees are protected, while also providing your whole organization ad-hoc, reactive support when needed.

Who is it for?

Fractional HR services are typically appropriate for organizations with 3-50 employees, in any industry. It can also be used in larger organizations, to supplement existing in-house resources, or to meet short term supply and demand issues such as covering a long-term absence or helping out with implementation projects.

What are the advantages of a Fractional HR service?

There are a number of potential benefits to a Fractional HR service, depending on the specific circumstances of your organization and its future goals. Here is a quick summary of the key benefits that most organizations enjoy:

Cost Savings

Using a Fractional HR service is typically much less expensive than direct hiring. In many cases, the organization using such a service will pay less, but receive the same level of service as if they had hired directly. This is usually the case when the organization is small and growing. At this stage of its lifecycle, the organization is often putting systems and processes in place to support growth, yet doesn't have enough staff to fully occupy a full-time HR function. Using a Fractional HR service is a very cost efficient way of preparing an organization to scale its headcount and human capital.

Another situation well suited to Fractional HR is a smaller organization that is not looking to grow quickly. In many cases, Fractional HR can be used in lieu of a full time HR function on an ongoing basis - giving leadership peace of mind and experts to call on for advice when needed. Again, this is a very cost-effective way for an organization to be supported by HR professionals, on an as-needed basis, without the financial burden of full time staff.

Reduced Overhead

Another great advantage for smaller organization is that Fractional HR is a fully managed service. Your service provider does all of the hard work of figuring out your needs, and selecting the appropriately qualified and experienced professionals to serve your organization. Your service provider will also actively monitor and manage your service, relieving your organization of the management overhead. This leads to a secondary cost saving above and beyond the savings you make on the HR resources themselves, and frees up the organization's leadership to focus on higher priority tasks. At Northstar, these management services are provided completely free of charge.

Improved Teamwork

Fractional HR is a type of Outsourced HR, but it has key differences to traditional Outsourced HR models. The biggest difference, which makes it far more compelling and effective, is that your team of HR professionals is permanently assigned to your organization.

This means that your HR professional (or team) will develop a deep understanding of your business and its unique needs over time. It will develop trust relationships with your leadership and your employees. You will always reach the same person (or small team of people), when you reach out for help.

In other words, your Fractional HR team will feel like a part of your own team. In a profession which relies on trust between individuals as well as a thorough understanding of your organization, this makes all the difference and provides for a much for effective service.

Access to Targeted Skills and Experience

Using a Fractional HR service is a great way to gain access to vital specialist skills that are either not required full time, or not required on an ongoing basis - even if an organization already has an in-house HR function. Perhaps you are going through a merger and need strategic HR support to help plan for and execute change, or maybe you are faced with the daunting task of selecting and implementing a new HRIS, ATS, or Payroll system. In these cases, Fractional HR services can give you instant access to the specific skills your organization needs, for the time it needs them.

Fast Start

Choosing a Fraction HR partner with a large pool of qualified talent means that you can get up and running with the appropriately skilled professionals much faster than if you had direct-hired or outsourced your project entirely. Quality HR professionals are in demand and it can be difficult for a smaller organization to find the talent it needs on the open market, with positions often taking many weeks and even months to fill. When speed matters, Fractional HR services are often the way to go.

Is our Fractional HR the right solution for your organization?

Get in touch with us and find out! Our trusted advisors will ask you a few questions about your organization and its goals, and provide you with an honest assessment. If you decide that Fractional HR is the right fit, we will provide you with a free, no obligation quote within hours.

HR is all about people. Choose a partner who is 100% committed to customer delight and takes great pride in offering the absolute best service and support. Choose NorthstarPMO. There is a very good reason why we won the 2021 Certificate of Excellence award from