Why an SME should consider the business case for implementing a fractional HR model. Sooner rather than later

What exactly is fractional HR and why should I consider it?

As a business grows there becomes a need for HR. There is no magic number of staff to tell you when. The savvy scale up does this at an early stage and establishes their foundations ready for growth rather than wait until the sh** hits the fan or they run themselves into the ground trying to spin all of the plates.

The HR requirement is often at multiple levels of HR skill sets that are not commonly found in one person. Finding that ideal mix of expertise or making the investment in multiple HR people can be overwhelming for most companies.

This is where Fractional HR becomes a cost effective solution for a business growing at pace.?It provides you with the ideal mix of expertise without making the investment in multiple HR people.

Fractional relationships are more like?adding another team member (or a few) to your business on?a part-time basis. ... In a fractional relationship, the fractional team acts as a member of your business while they are working with you. A flexible and seamless part of your team, a key player to the success of your growing business.

Why use a fractional HR model?

Functions like Finance and Legal have been utilising fractional talent for ages. Indeed more recently we are seeing an increase in tech consultants / developers and creatives being deployed into businesses to bolster or to provide expertise.

?Added to this, the pandemic has brought a new dynamic to business. To be successful we must have the ability to be flexible or to pivot quickly and effectively.

?The new norm is trending towards increased usage of fractional staff members because of the flexibility and cost effectiveness.?And this includes HR.

What are the benefits of fractional HR to a growing business?

1)???As the business grows at pace, so does the need for HR resource. What was once possible with just you and a bit of ad hoc help, suddenly requires a team with varied levels and areas of expertise.

?Fractional HR can be invaluable in supporting your people functions during this growth. Not only will your people processes run smoothly, but you will set up a strong infrastructure for when it is time to make those positions permanent.

2)???Employing permanent HR professionals can be an expensive overhead, not to mention the cost of recruiting, developing and covering. A full time HR Manager including benefits can easily exceed 40k a year. a HR Advisor 30k and a Director, 50k plus easily.

Using a recruitment agency rather than having a Talent Attraction and Retention Lead is in the thousands!

?Utilising fractional HR is a fraction of the cost, with no tax / NI commitment, no sick pay, annual leave, maternity pay, development costs to account for. If the arrangement ends there are no added expenses typically incurred with full time employees such as?redundancy and notice periods.

3)???It is easy to increase or decrease HR support to match the needs of the business at differing stages. Many smaller businesses do not need full-time support on a regular basis. That support many ebb and flow, fractional HR allows you that flexibility.

4)???You can benefit from a diverse range of skills and experience that can add value to your business and give you access to talent you would otherwise not have exposure to. A new set of eyes, a resource that others can learn from.

How does it work?

A one size definitely doesn’t fit all.

Within The HR Dept Newcastle we have a wide-range of experienced human resources professionals ready to support your business needs. Our work with a diverse range of companies means you probably don’t have a problem we can’t solve.

Our starting place is to meet with you so you can share your business strategy and we can discuss and asses your people needs in relation to what it is you want to achieve and your budget.?

?We can then recommend the level of HR expertise and the amount of time we think you require to meet your goals in relation to your people.

?You get a designated HR professional who will manage the relationship, work directly with you and your leaders and partner with other HR Dept colleagues to create custom solutions for your business.?This will be done by establishing a People Plan that compliments your business strategy.

Here are some ideas as to where support can typically be targeted:

Compliance

Establishing robust employment contracts and HR policies that fit culturally and protect you.?Conducting HR Audits to ensure the business is complying with current employment legislation and best sector practice aswell as managing employee relations situations.

At The HR Dept our compliance comes with tribunal indemnity insurance, meaning our lawyers step in to support you and our insurers cover legal ad tribunal costs.

?Talent Attraction and Retention

Utilising recruitment agencies can become expensive and not always the right cultural fit for your business.?

Using a fractional Talent Manager for your business can encompass developing your employer brand, developing a talent pipeline, establishing graduate programmes, manage the hiring process, interviewing and screening candidates, developing interview questions and tools, and coordinating the pre-employment requirements aswell as managing the onboarding process for employees.

Infrastructure

Establishing pay structures, annual pay bench marking, necessary templates for your growing business, job roles, offer letters, termination letters, employee surveys, performance reviews, probation meetings and implementing development planning.?

Culture

Assessing and developing your organizational culture and values by making use of a fractional Employee Engagement Lead.?Understand what ?employees are thinking, how engaged they are or what the temperature is around diversity and inclusion. Establishing appropriate wellbeing initiatives that compliment your culture.?

?Employee Relations

Providing that go to person for your managers and employees so that issues can be nipped in the bud before they escalate.?Managing grievances, disciplinaries and absences in liaison with your managers. Perhaps taking forward exit strategies such as settlements or redundancies. Plus its covered by our tribunal indemnity insurance.

?Interim HR resource

?Companies often find the need for experienced HR talent on an interim basis.

?This may be caused by a temporary leave of absence, sickness, maternity or someone leaving with no notice. We can provide the appropriate skill level to deliver on a fractional basis.

?An example of how a fractional HR relationship, delivering on the aspects above, ?could look (at the fraction of the price of an in house team):

If you’re a scale up business and growing at pace book a free Discovery Meeting to explore how our Fractional HR solution can work for you.

Jayne Hart, MCIPD

Director of The HR Dept Newcastle