Why do small business owners consider a fractional HR Model?
Most small businesses and organizations understand the value of the HR function, yet as a practical matter, most don’t require a full-time role devoted to HR. This means that owners and various others take on responsibility for employee benefits, compliance efforts, recruitment and retention efforts amidst ongoing employee relations challenges without necessarily having the expertise needed. Even when critical HR needs arise, a full-time HR professional is simply cost prohibitive for most small businesses. Simply put, for many HR is an “unaffordable necessity.”
The solution many innovative business owners and leaders are leveraging to address this conundrum is Fractional HR. Using a fraction HR model is a cost-effective, flexible solution that provides expert HR support without the overhead of a full-time hire.
Let’s break it down and explore how fractional HR expertise can save your business thousands of dollars annually.
The Cost of a Full-Time HR Generalist
Hiring an experienced in-house HR Generalist can cost your business an average of $65,000 to close to or over 6 figures a year in salary alone depending on the level of experience needed. But that’s just the starting point. Once you factor in payroll taxes, benefits, and other overhead costs, the true cost of that employee climbs even more.
The Cost of Fractional HR Services
Fractional services, by comparison, can provide the necessary level of expertise and support for around one-third less or a fraction of the overall cost depending on the level of support needed. The savings can result in tens of thousands of dollars per year from what a full-time team could cost, while providing a range of services from HR Operational support to complex Sr. HR leadership and consultation when necessary.
Other Advantages of Fractional HR
Scalable Support: With fractional HR, you pay for only the services you need. Whether it’s a few hours per week or full-service support during busy periods like open enrollment, you can scale up or down without the fixed costs of a salaried employee. This flexibility ensures you’re never overpaying for unused resources.
No Payroll Taxes or Benefits: Fractional HR professionals are independent contractors, so you’re not responsible for paying payroll taxes, health insurance, or retirement benefits.
Access to Expertise: Fractional HR can offer a team model where the team is composed of seasoned professionals with years of experience in compliance, employee relations, and strategic HR initiatives. Fractional HR providers typically have different personnel at different rates depending on the level of support needed, from experienced HR administrative needs to more senior consultants with years of experience and knowledge of HR best practices across various sectors.
Focus on Core Business Operations: By utilizing fractional HR experts, small business owners and managers can focus on growing their business rather than being bogged down by time-consuming HR tasks. This improved efficiency translates into higher productivity and profitability.
Avoiding Costly Compliance Issues: Mistakes in HR compliance can result in fines, lawsuits, and reputational damage. Fractional HR experts ensure you stay up-to-date on ever-changing labor laws and regulations, helping you avoid these costly pitfalls.
The Bottom Line
For small businesses, every dollar counts. Fractional HR offers a smarter, leaner alternative to hiring a full-time HR professional, delivering the expertise you need at a fraction of the cost. By choosing us, you’re not just saving money—you’re gaining flexibility, access to top-tier expertise, and peace of mind knowing your HR needs are in expert hands.
Ready to save thousands on HR costs while improving your business operations? Contact us today to learn more about how our services can work for you!