Fractional Employment @Work

Recently I was surprised to learn that 99.9% of all US businesses are “small”, meaning they have less than 250 employees.? In fact, over half of all Americans work for one of these organizations.? Why is this important to know?? Because start-ups and smaller organizations are beginning to embrace a new way of working that could change your plans for the future: fractional employment.? Fractional work is a model where individuals work part-time for multiple organizations at the same time, frequently in leadership, advisory or specialized positions.? For those who are at the tail end of their career, it is an extremely attractive alternative to retirement.? And considering the expected labor shortages in the next decade, it could be a compelling concept for organizations to adopt to ensure they have the talent needed to be successful.?

One of the first questions I usually receive when exploring this idea is “what is the difference between fractional work and freelancing?”.? While there are similarities, fractional work is distinct from freelancing due to it’s focus on longer-term engagements and formal, well-defined responsibilities.? Freelancers are more project-based with clear start and end dates, while fractional workers maintain ongoing responsibilities and tend to be more integrated into the organization’s operations and strategy.? When structured well, it can benefit both individuals and companies that are looking to thrive in a constantly changing environment.? Setting clear expectations about compensation, availability and deliverables is the key.?

Most of the time, the reason an organization will hire someone for fractional work is because they possess a specialized skill or experience that would make them unaffordable if hired full-time.? So, determining appropriate compensation is critical, and should reflect the expected hours or deliverables this individual will contribute.? This is a critical distinction: are you paying this person for their availability or their accomplishments? Some prefer to be paid hourly for precise work completed, while others negotiate retainer fees for steady engagement.? One of the biggest considerations is access to benefits.? For those individuals who need health insurance but are not yet old enough to qualify for Medicare, offering benefits to fractional workers who do not meet the common prerequisite of working 30+ hours a week could prove to be the most compelling component of this model.?

Bottom line: fractional work demands transparency around expectations and requires ongoing communication as environments and situations evolve over time.? Technology will undoubtedly play a significant role in these arrangements, with organizations embracing project management platforms and collaboration tools that allow fractional workers to collaborate and deliver results regardless of when, where or how they work.? While fractional work is more than a trend and is poised to grow, its broader acceptance will depend on how quickly both organizations and legal frameworks can adapt to this non-traditional work model. Addressing concerns around job security, company culture, and regulation will be key to ensuring its long-term success.? And if done right, it could appreciably impact the way many of us view retirement.?