This new type of entrepreneurship is booming—and it’s not just a fad

A relatively new category of solopreneur is booming, and its ascent is challenging perceptions of what it means to be self-employed.

Since 2018 demand for fractional expertise—or specialized talent that works for one or many firms on a limited or part-time basis—has tripled, according to a recent study by workforce intelligence company Revelio Labs. The most popular part-time executive position, according to the study, is CFO, which makes up 18% of fractional executive roles, followed by CMO at 14% and CEO at 10%.

Revelio Labs’ chief economist Lisa Simon says the skyrocketing demand for fractional executives is largely a function of the current job market. She explains that layoffs have freed up many highly skilled workers while budgetary constraints have added to the appeal of a lower cost flexible alternative to full-time hires among businesses. 

“Employers see fractional work as a way to save on costs while filling a particular role and, because of the weak labor market, more workers are willing to take these part-time positions,” she explains.

Though some go fractional out of necessity, others actively choose the arrangement for its added flexibility, especially women. According to the Revelio Labs study, about 38% of American fractional executives are female, compared with 31.5% of those that are traditionally employed.

“Women are much more likely to be interested in remote work and return to office has had particularly adversely affected women; they’re less willing to go back, because of the extra caregiving responsibilities,” Simon explains. “Fractional work is more attractive to mothers, to those giving elder care, because it allows for that extra flexibility.”

A new work paradigm, or just a fad?

The trend may be driven by temporary market conditions, but there is reason to believe the growth in both the supply and demand of fractional help is indicative of a broader and more lasting change.

“What I’m seeing is the unbundling of roles,” explains Sara Daw, the global CEO of U.K.-based Liberti Group, which connects businesses with fractional executive talent in 18 counties. “Roles that we historically only thought of as being full-time and permanent are unbundling into more work tasks and activities, and the fractional trend meets that head on.”

Daw says her organization has been providing part-time executive services since 2001, but those services have only been labelled “fractional” since the pandemic.

Since then the organization has doubled thanks to skyrocketing demand, especially for CFOs, which it provides through its sub-brand the CFO Centre.

“Before COVID most people didn’t know what we were talking about when we were pitching it,” says Daw, who published a book tracking the fractional trend last year. “Most business owners wanted their CFO sitting next to them, and I think COVID taught everyone that we can work differently, and it’s normalized our business model.”

The pandemic also inspired workers to reevaluate their relationship with work and seek more control over their schedules.

“It encouraged a lot of people to consider whether their full-time high-end C-suite leadership job was detrimental to their health, their well-being, their family,” Daw says. “Those two trends coming together has created this phenomenon.”

That’s especially true among younger workers. Though they may not be ready to step into fractional executive roles, a new generation of talent is proving much more comfortable with the part-time model, suggesting more growth on the horizon.

“Most Gen Zers have a side gig already; they’re much more portfolio-minded and gig-orientated,” Daw says. “I’m not saying employment is dead, I’m saying this has got its own space alongside it.”

Not Just for Cash-Strapped Startups

Prior to the pandemic, Daw says the primary customer for fractional services were startups and small businesses that couldn’t afford full-time help. 

While that segment remains strong, there has also been significant growth among larger organizations looking for a temporary, flexible helping hand.

“Since COVID, the pace of change—geopolitics, climate change, war, technology, all of those mega-trends—has meant that organizations have got a lot to cope with, and the senior leaders have started looking more for outside help,” she says. “They might have a group CFO or group CMO who’s employed full-time, but those individuals are overwhelmed in a turbulent world, and they need an agile talent structure.”

When large organizations needed outside assistance in the past they traditionally looked to major consulting and advisory firms. Many are now discovering that they can find specialized talent at a lower cost by engaging a part-time, temporary expert.

Those fractional experts may have even been previously employed by one of those big consulting firms or may have helped a similar organization overcome a similar challenge in the past.

“You’re seeing very large corporations—the brands you know—hiring these fraction-ers intentionally to get access to the talent,” says Ran Harpaz, the founder and CEO of Lettuce Financial, a Fintech platform for solopreneurs earning six figures. “They don’t want to go to finance and justify a job, and put it in the budget for the next five years and deal with all the support systems around it.”

From embarrassment to badge of honor

Before the term gained traction, those who offered what we’d now describe as fractional services were given labels that Harpaz says didn’t really match their level of expertise.

“Consultant, contractor, 1099, those are accounting terms. ‘Fractional’ is a business term,” he says. “It says ‘I’m going to solve your problem, and I can do it in a fractional capacity.’”

That new label, he says, has shifted the perception of this category of solopreneurs from something many felt they had to hide on their résumés to something they advertise as a badge of honor.

“They say out loud, ‘I’m so great at what I do that I can help your business in 10 hours or 20 hours a week, because I’m that experienced,” Harpaz says. “It’s not a gig, it’s a destination, and I’m positioning myself so that clients understand what they’re getting, and they see the value in the interaction.”