The maths of a fractional executive versus a full-time hire

Every growing business reaches the point where it needs senior leadership it does not have. The instinct is to hire. Sometimes that is right. Often the maths says otherwise, and it is worth doing the maths before you brief a recruiter.

What a full-time executive actually costs

Take a competent operations or technology director in the UK. Base salary, employer's National Insurance, pension, bonus and benefits will land somewhere between £150,000 and £250,000 a year. Add a recruiter's fee of 25 to 30 percent of base, three to six months to find them, and another three months before they are productive. Your first-year, all-in cost is comfortably north of £200,000, and you carry severance risk if it does not work out.

Now ask the harder question: do you have a full-time job for that person? In most businesses under £20m, the honest answer is no. You have two days a week of genuinely executive work and three days of work that someone cheaper should be doing. So the hire either gets bored, or expands their remit into things that did not need an executive, and you pay executive rates for both.

What a fraction costs

A fractional executive at one day a week costs roughly £70,000 a year. Two days a week, around £135,000. You get someone who has already done the job at a scale you have not reached yet, productive in week one, with no recruitment fee, no notice period beyond 30 days, and no severance exposure. When the phase of work ends, so does the cost.

The fraction is not always the answer. If the role is genuinely full-time, permanent and central to the business, hire it. A fractional executive is the right call when the need is real but not full-time, when speed matters more than permanence, or when you need the experience now and the budget catches up later.

The test

Write down what you would put in the job description. Then mark each line: does this need an executive, or does it need a manager? If less than half needs an executive, you are about to overpay for the wrong thing. Buy the fraction, promote or hire the manager, and revisit in a year.