10 Ways Fractional HR Services Can Support Fast-Growth Companies

“Fast-growth companies face constant growing pains, especially at critical inflection points, and investors attribute 65% of failures in their portfolios to people and organizational issues.”?

Your startup just landed a major client, or your small business is expanding into new markets. Exciting, right? But behind the scenes, your HR team (or the one person handling HR part-time, if you are lucky to have one) is juggling compliance paperwork, onboarding new hires, and trying to build a culture that keeps everyone engaged.

At some point, this scenario may become unsustainable.?

When you grow rapidly, revenue and headcount can sometimes double in a few months. Your organizational structure will change, and so will your culture. Strategic functions like workforce planning and change management will be crucial at this stage (and top priorities for HR in 2025, according to Gartner). Still, these functions can be a big undertaking that smaller internal HR departments just don’t have the time or resources for.

You must ensure organizational readiness or capacity to scale. If you don’t, failure is almost inevitable. According to a McKinsey & Co. survey, investors attribute 65% of portfolio failures to people and organizational issues.

There are options you can rely on to overcome these challenges. In the last few years, Fractional HR services have emerged as a flexible, scalable, and strategic solution for companies needing support to manage operational change and ensure long-term success during rapid growth.

Why Rely on Fractional HR Support?

Having a Fractional HR partner is a flexible, cost-effective solution that can balance short-term operational efficiency with long-term strategic goals and growth.?

Fractional HR professionals work on a limited schedule, providing expertise only when and where needed. This could range from a few hours weekly to a specific project over several months. While hiring a full-time HR leader or a Chief People Officer is not always feasible for startups or small businesses, having a fractional HR leader can help address challenges and fill in the gaps in specific organizations and skills needs. Moreover, your fractional leader can still contribute and provide insight into the overall company strategy.?

In addition to providing strategic support to smaller teams, organizations can leverage fractional HR support during transitions such as company restructuring or mergers and acquisitions.

Some common HR positions that Fractional HR services help fill are:

• Chief People Officer
• Head of HR
• CHRO
• Head of Talent
• Fractional People Function Support
• HR Business Partner
• People Operations Manager
• Recruiter
• Talent Acquisition Leader
• Learning and Development Leader
• DEI Leader, Chief Diversity Officer
• Total Rewards/Compensation Specialist
• Compliance Expert

5 Benefits of Fractional HR Support

Fractional HR support can bring a whole host of benefits to organizations through the tailored, customized support they can provide while still keeping budgets and resources optimized. Here, we highlight five benefits of Fractional HR services:

• Cost-Effective: Organizations with a limited budget, such as start-ups or small-to-mid-sized businesses, can access the expertise of high-level HR professionals without the cost of a full-time hire.?
• Flexible and Customizable: Companies all have unique needs and require different levels of HR support. Fractional HR support can be scaled up or down as business needs evolve.
• Diverse Experience: Your Fractional HR partners bring insights to the company based on their broad and diverse experiences working in different industries and companies. This allows them to apply informed perspectives, innovative ideas, and best practices they’ve learned to the business.
• Objective Perspective: Fractional HR leaders have an outsider’s perspective of the business’s needs and challenges. With an unbiased view, they can find blindspots and areas for innovation that an internal employee may overlook.
• Specialized Knowledge: Depending on business needs, Fractional HR leaders can bring specialized knowledge and niche expertise across different HR functions, such as talent acquisition, DEI, or compliance.

10 Ways Fractional HR Services Can Support Fast-Growing Companies

Fractional HR leaders bring a wealth of knowledge and expertise in several HR functions. Here are ten ways that Fractional HR services can support fast-growing companies:

1. Strategic Workforce Planning: Fractional HR partners can spearhead your strategic workforce planning, including talent acquisition and management, to align these areas with your business objectives and strategy. For example, they can leverage workforce analytics and help an early-stage tech startup identify skill gaps and align its recruitment strategy with future needs, allowing the business to scale faster.
2. Recruitment Expertise: When organizations scale, the talent strategy needs to keep up with the growth and ensure that the team is equipped with the right skills to help set the company up for success. When faced with this situation, most organizations often find themselves rushing to hire and find the right talent, which can be challenging. In fact, 50% of Tech SMB owners report they struggle to fill open positions and roughly 90% report that qualified candidates are scarce. Fractional HR leaders bring the networks, tools, and experience needed to effectively and efficiently hire top-tier talent to grow the business. They can help integrate efficient processes like candidate screening algorithms and chatbots to reduce time-to-hire and improve the candidate experience, making the organization more attractive to job seekers.
3. Onboarding and Training: When a company is growing fast, it must ensure the onboarding process and training delivery are seamless for a short time to productivity. Data shows that 22% of new hires leave within the first 45 days due to poor onboarding experience, which can also plummet team productivity and morale and cause turnover to skyrocket. A Fractional HR partner can create scalable, personalized onboarding and L&D programs for new hires to maintain productivity amidst rapid growth, leading to better retention and satisfaction.
4. Culture Preservation: Experienced startup founders cite organizational culture as a primary driver of success. A rapidly scaling business can cause instability, so preserving and sustaining company culture should be a priority. Fractional HR leaders can develop change management initiatives, such as value alignment and pulse surveys, to address issues before they escalate.?
5. Performance Management: Strategic performance management tactics should be implemented to effectively and efficiently track, monitor, and improve performance during transition periods. Fractional HR partners can design and implement continuous feedback loops rather than an annual performance conversation to ensure employees are aligned with organizational goals.
6. Retention Strategies: Overlooking talent retention during high-growth stages is risky, considering that 1 in 2 US employees is open to leaving their organization. Fractional HR partners can help companies strengthen their employer brand, implement proactive measures to boost engagement, and attract and retain top talent.
7. Compliance and Risk Management: Scaling operations often means navigating new legal and regulatory requirements. Noncompliance costs for small businesses include an average of $4 million in revenue loss and up to $5 million in business disruptions. Relying on dedicated compliance experts during expansion phases helps companies avoid fines. Fractional HR leaders have the right knowledge and expertise to ensure all policies are aligned with legal and industry standards, helping reduce the risk of costly non-compliance. They can also conduct regular audits to ensure ongoing compliance, which can help increase revenue. Heads up: last year, 29% of organizations lost potential contracts because they lacked a compliance certification.
8. Diversity, Equity, and Inclusion (DEI): In high-pressure, high-growth environments, DEI can quickly fall through the cracks. With the help of a Fractional HR partner, organizations can implement specific strategies to promote and maintain DEI initiatives. For example, in a rapidly growing organization, employees may value the connection that Employee Resource Groups (ERGs) bring – and organizations can take feedback from ERGs to further iterate on DEI measures.
9. Change Management: Organizational change can negatively impact workforce morale and productivity, especially when it is managed from the top down. With the support of Fractional HR partners, you can prepare and guide the organization through these transition periods. For example, they can help apply open-source principles to change management, involving employees in the process, reducing implementation time, and increasing engagement.
10. HR Technology Integration: HR tech can be implemented into business operations, significantly improving processes and decision-making. While many fast-growing companies are weary of the cost and complexity of tech, Fractional HR support partners have the expertise to find solutions that work for the company’s needs.

Key Insights

Summing up, Fractional HR services can help fast-growing companies requiring support in the HR function while providing these benefits:

• Access to Expertise: This solution provides cost-effective, high-level HR support. This allows fast-growing companies to optimize their HR functions without the cost and overhead of hiring a full-time HR executive.
• Customized and Flexible Support: These services offer part-time or project-based support and can be scaled to increase services or pivot based on company needs.
• Strategic and Operational Impact: Fractional HR services can contribute to high-level strategies, such as workforce planning and day-to-day operational support.
• Preserving Culture Amid Growth: Fractional HR leaders can create initiatives to maintain and adapt culture during transformational periods.
• Specialized Expertise for Strategic Growth: Companies can rely on the support of highly skilled professionals with unique strengths, vast experience, and niche knowledge. They can help address company-specific challenges strategically for long-term success and growth.

Get the Right HR Support for a Sustainable Growth Journey

Scaling a business is exciting—but it comes with challenges that must be addressed to ensure success in the long term.?

Fractional HR is a solution that can provide startups and SMBs with the expertise, flexibility, and strategic support needed to grow confidently, reduce risks, and build a thriving organizational culture.

If you think this solution is the right fit for your organization, visit livingHR, Inc. to learn more about their Fractional HR services: https://bit.ly/3BWyHTu

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