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Permanent employee or fractional expert: a cost-benefit analysis

Jaime Klein | JAN 22, 2024

At a time when everything on HR leaders’ plates has been elevated to mission-critical, it’s more important than ever to be strategic about how you’ll accomplish your goals, get everything done, and stay within your budget. 

In the midst of this overwhelm, we often talk with HR leaders whose initial instinct falls into one of two categories: to grow their team quickly to address these immediate needs, or to cut projects and scale back priorities.  

We’re excited to introduce a new way: fractional talent as a strategic and cost-effective approach when a leadership role is open or a strategic project requires additional focus.  

Below, we compare bringing in a fractional HR expert to relying exclusively on full-time employees and highlight the advantages of fractional talent in terms of cost savings, enhanced productivity, unmatched flexibility, and improved retention and engagement.

The value of fractional talent

Now in our eighteenth year of providing fractional HR to companies across all industries, we’ve heard from countless HR and business leaders that they are blown away by the value of working in this flexible model – particularly in these four areas:

Cost savings

When you bring in a fractional expert from a firm like Inspire HR, you know the exact cost. Plus it’s a service cost, not payroll. So you can say goodbye to the overhead.  

Meanwhile, any HR leader knows that the real cost of a full-time employee includes much more than their salary. Have you ever considered just how much you spend to bring in a new HR leader as a full-time employee?

Look how these add up:

$276,390: Salary
Average salary of a VP of HR in New York, NY. 

$81,259: Fringe benefits
Average cost of fringe benefits including medical insurance, retirement benefits, stock options, disability and life insurance, paid holidays, paid time off, professional development, commuter benefits, and FICA at 29.4% per Bureau of Labor Statistics.

$82,917: Recruiting costs

$26,261: Severance + outplacement services
If you have a VP on your team for just two years, you’ll likely be paying around $21,261 in severance plus $5,000 for outplacement services.  

$4,000: Onboarding

$5,000+: Additional costs
Real estate, tech systems, hardware, and other equipment and supplies all come at a cost.

All-in, it costs about $475,827 to hire an HR leader full-time, compared to a portion of the cost to engage a fractional expert who also delivers on productivity, flexibility and retention.

COO explains reduced timeline thanks to fractional talent

Slickdeals COO Greg Boudewijn says when his company was rapidly scaling, they wanted to “accomplish as much as we can, in as little time as possible” and bringing in a “real, real CHRO” could reduce their timeline from 1-2 years to 3-4 months.

Greater productivity

Engaging fractional HR talent is also a way to maintain, or even boost, productivity when you have a role open or a new project that requires attention.

Image showing costs of hiring a full-time employee

A fractional HR Expert will focus exclusively on your most pressing needs, without the distractions of organizational tasks, learning and development, or all-staff meetings. According to Harvard Business Review, full-time employed knowledge workers spend 38% of their time in meetings with other departments and in other ways managing across the organization. That’s a lot of time pulled away from your key priorities.  

Fractional HR experts also know how to make an impact fast. Where it can take 6 months for a company to reach its break-even point to earn back its investment in a full-time employee, a fractional expert hits the ground running. Considering that a company can lose 1.75% of its total business revenue on its new hire learning curve, a fractional HR expert who knows how to make an immediate impact boosts productivity and your balance sheet. 


Fractional talent delivers the flexibility you need in the modern world of HR. 

When you have a trusted Expert taking care of key tasks, it alleviates the pressure to make a quick hire, especially in a turbulent economy. That’s if a quick hire is even possible. On average, a position stays open for 77 days, including hiring, negotiation, and transitioning to a start date. 

Hiring someone who does not end up being a great fit for the company not only starts the clock all over, it comes with a considerable cost – $30,000 or more when you factor in severance and outplacement costs. A fractional expert can mind the ship while you take your time finding the right permanent hire.  

It’s not just about plugging holes when a role is open, either. Fractional experts deliver flexibility for busy leaders in any circumstance. They allow you to offload tasks so your focus can rest squarely where you want it to be. 

Retention + engagement

We’ve all lived situations where a staffing shortage means all hands on deck for sprints that become marathons. It strips away what employees crave most: flexibility and work-life balance. And as 42% of desk workers admit to being burned out, leaders can’t afford to heap on additional work and stress.  

A fractional expert releases that tension so everyone on the team can maintain greater control and flexibility over their workload. Bonus: early career professionals craving opportunities for mentorship and career guidance are given the opportunity to work side-by-side with senior or mid-level HR experts who naturally upskill the team around them. 

Fractional experts also pave an on-ramp for new employees when you determine a full-time hire is your best permanent move – making it more likely they’ll stay and thrive. Instead of stepping into chaos, or a list of to-dos dated yesterday, your employee can start fresh and bring their best. Where just 29% of new hires say they feel prepared and supported to excel in their role after onboarding, your people will have an expert to acclimate them and then exit as slowly or quickly as you need.   

Fractional HR: Your not-so-secret weapon

From staying updated on evolving labor laws across state lines to engaging multi-generational workforces, promoting employee well-being, staying up-to-date on evolving best practices around AI, and more demands for a modern workforce, no one HR leader can do it all. And with Inspire HR on speed dial, you don’t have to.

Hiring a fractional HR expert when a leadership role is open, a strategic project needs focus, or your team needs a capable extra set of hands is a cost-effective and strategic decision for businesses.