On-demand executives, also known as interim executives or temporary executives, are nothing new. The concept of hiring a temporary executive to fill a leadership gap or to provide specialized expertise was first introduced in the 1970s. At that time, companies would typically hire interim executives for short-term projects or to fill in for a permanent executive who was on leave or had resigned.
However, the concept of fractional leadership, which is a newer and more specialized form of on-demand executive services, emerged in the early 2000s. Fractional executives are typically hired for a longer period of time, often on a part-time basis, to provide ongoing leadership and strategic guidance to a company.
This model has become increasingly popular in recent years as more companies have recognized the benefits of having access to high-level expertise without the cost of a full-time executive. In a survey of executives, 90% reported that fractional executives were effective in achieving their business goals.
The rise of on-demand and fractional executives can be attributed to several factors. One of the main drivers is the increasing complexity of business operations and the need for specialized expertise in areas such as finance, marketing, and technology. For example, CFO.com says 60% of CFOs reported plans to hire fractional or interim executives for their finance departments.
Another factor is the changing nature of work, with more professionals seeking flexible and remote work arrangements. Many have decades of experience and are looking for fresh challenges and scenes, creating a pool of highly skilled executives who are available to work on a project or part-time basis.
Overall, the history of on-demand leadership is one of evolution and adaptation to changing business needs. As companies continue to face new obstacles and opportunities, the demand for flexible and specialized executive talent is likely to continue to grow.
The Difference Between a Fractional Executive and an On-Demand Executive
A fractional executive is a part-time executive who works for multiple companies at the same time. They are typically hired to fill a specific role or need within a company for a set amount of time, usually ranging from a few months to a year. Fractional executives are often experienced professionals who have held executive positions in the past and are looking for more flexibility in their work schedules or are in transition between jobs.
An on-demand executive is a temporary executive who is brought in to handle a specific project or challenge within a company. They are typically hired for a shorter period of time than fractional executives, usually ranging from a few weeks to a few months. On-demand executives are often specialists in a particular area, such as marketing (CMOs), IT (CTOs & CIOs) or finance (CFOs), and are hired to provide expertise and guidance to a company.
It’s About Time
The main difference between fractional and on-demand executives is the length of time they are hired for and the scope of their responsibilities. Fractional executives are typically hired for longer periods of time and are responsible for a broader range of tasks within a company. On-demand executives, on the other hand, are hired for shorter periods of time and are focused on specific projects or challenges within a company.
No matter the type, interim management is in high demand. Forbes reports the global market for interim management was valued at $26.8 billion in 2018 and is projected to reach $39.5 billion by 2025. Overall, the rise of fractional and on-demand executives reflects a growing trend towards more flexible and agile business models that embrace change and transformation.
The Benefits of Using On-Demand and Fractional Executives
There are multiple benefits of hiring interim executives, most notably, the flexibility, perspective, cost-efficiency and speed it brings.
On-demand and fractional executives provide businesses with access to high-level expertise and experience without the long-term commitment of hiring a full-time executive. This allows businesses to scale up or down as needed, depending on their current needs and financial situation.
On-demand executives who are brought in for a specific project or period of time provide their expertise and leadership until the goals have been reached. This can be particularly beneficial for businesses undergoing a major change or transition, such as a merger or acquisition. They may also give an organization time to experiment with a new position to see if it adds value.
On-demand and fractional executives can provide a flexible solution for companies that need leadership support on a project-by-project basis, rather than a full-time commitment. The use of fractional executives increased by 88% from 2013 to 2018.
On-demand and fractional executives can provide specialized expertise and experience that may not be available within a company’s current leadership team. Using on-demand and fractional executives can help to improve a company’s overall performance and bottom line by providing targeted leadership and expertise.
Fractional leaders typically work part-time for multiple clients, bringing a diverse range of experience and knowledge to each business they work with. Similarly, on-demand executives typically have deep experience in a certain area. Both situations can lead to fresh perspectives and innovative solutions to business challenges.
Hiring full-time executives comes with significant costs, including salaries, benefits, and other overhead expenses. On-demand and fractional executives can provide a cost-effective alternative for businesses that may not have the resources to hire a full-time executive. By only paying for the services they need, businesses can save money while still receiving the benefits of high-level leadership and expertise.
Bringing in on-demand or fractional executives can help reduce the risk of making a bad hire for a full-time executive position, which can end up costing an organization hundreds of thousands of dollars. Instead of hiring and hoping it works out, businesses can “try before they buy.”
On-demand and fractional leaders can help companies quickly fill leadership gaps, whether it’s due to a sudden departure or a need for specialized expertise. The typical hiring process for permanent executives can be especially lengthy. Temporary executives enable businesses to bring in leadership quickly, even while they may continue their pursuit of a full-time hire, thereby minimizing disruption and maintaining operations.
How to Find On-Demand and Fractional Executives
While adding an interim executive to the leadership team can be faster than hiring a full-time executive, there is still a process that takes time. Your own leadership network may have some qualified referrals, but be careful not to jump too quickly. Even though the position is temporary, you want the right person for the job and your company culture, particularly since they will be in a leadership position.
Here are five strategies to finding the right interim executive:
- Determine your specific needs: Before you start looking for a fractional or on-demand executive, it’s important to determine your specific needs. What skills and experience do you require? What are your goals and objectives? By having a clear understanding of your needs, you can better identify candidates who have the right expertise and can help you achieve your goals.
- Utilize specialized agencies: There are many specialized recruiting agencies that can help you find fractional or on-demand executives based on your specific goals, budget and timeline. These agencies have a pool of highly qualified executives with a range of skills and experience, and they will vet them for you to only bring you the most qualified and relevant candidates. Instead of reviewing dozens of resumes and spending hours in interviews, you can save significant time when you trust your agency knows how to whittle down the list.
- Use online platforms: There are many online platforms that connect organizations with fractional or on-demand executives. You can search for executives based on their skills, experience, and industry expertise, but keep in mind that you’ll be sifting through an endless array of candidates. A specialized agency that knows your business and your people will be able to more quickly narrow the field to only those who are truly the best fit.
- Network: Networking is always a good idea, even for finding a fractional or on-demand executive. Attend industry events, conferences, and seminars to meet executives who have the skills and experience you need. You can also reach out to your professional network and ask for referrals. By leveraging your network, you can find executives with a proven track record and are trusted by your peers.
- Conduct thorough interviews: Once you have identified potential candidates, it’s important to conduct thorough interviews. Ask questions about their experience, skills, and approach to problem-solving. Ask for references and follow up with them to get a better understanding of the candidate’s strengths and weaknesses. By conducting thorough interviews, you can ensure that you find the best fractional or on-demand executive for your needs.
One More Note on Executive Search
Hiring an executive is a critical decision. This new addition to the leadership team will not only guide others, but they will likely interact with key stakeholders, such as strategic partners and board members. They will be making decisions that could impact the business for years to come. While they may be temporary, they most definitely matter. By working with an agency that specializes in executive search and knows how to structure the right pay and terms to attract the best of the best, you can be more confident you’ve hired the right person. And when you’re ready to hire full-time, the agency can help you either craft a tempting offer to keep the fractional or on-demand executive for the long haul or find a full-time replacement that matches or builds on their contributions.