You may be familiar with full-time, part-time, contract, temporary and gig job designations. However, there is a relatively new kind of role called the “fractional” worker. This refers to a work arrangement in which a person—usually a mid to senior-level executive—provides specialized skills or management services to multiple organizations on a part-time or project basis.

Due to cost cutting, remote work and the demand for flexible solutions to find top talent, this business model has gained traction and interest by both white-collar professionals and companies that possess this need.

Fractional executives provide their expertise on a limited-time basis to one or more companies at a time. For example, if an organization just lost a key senior manager and is in dire need of hiring a C-suite professional, the employer may onboard a fractional manager to step into the role until a full-time replacement is found.

These roles can be very lucrative. The average salary for a fractional job in the United States is around $108,560, according to data from ZipRecruiter.

What Is A Fractional Worker

Fractional workers are self-employed, entrepreneurial-oriented and offer their expertise in an array of sectors in which they have the requisite skill sets. They tend to focus on finance, marketing, human resources and information technology.

Fractional executives may temporarily serve as the interim CEO, CFO, CMO, CIO or  COO, and offer their extensive knowledge and experience. There are also fractional freelancers who work on projects or ongoing tasks at levels below the C-suite on the org chart.

In both cases, fractional workers appreciate diversified workplaces and the opportunity to collaborate with continually new faces throughout the years. They tend to have flexible schedules and can work in the office or at home. This cohort can increase their vast knowledge and networks, as they continue to learn from people in a variety of different fields.

If you are considering entering this field, you may be required to have skills, experience and an in-depth knowledge of certain matters, depending upon the assignments.

Fractional CFOs require skills in strategic planning, financial management, accounting, audit and balance sheets. For a marketing role, a person will need to be well-versed in marketing strategies. Similarly, fractional engineers need to know about the tech sector, software development, coding and related matters. A fractional product manager should possess an understanding of the product development lifecycle management, market analysis and the ability to collaborate with a cross section of professionals.

The Tax Angle

Fractional workers benefit from the tax codes. These folks are usually paid on a monthly retainer or hourly rate, providing flexibility and financial benefits that attract experienced professionals seeking greater earning potential and work-life balance.

One of the strong arguments for taking these types of jobs is the high compensation rate commensurate with their specialized and in-demand skills. These jobs offer higher gross pay compared to full-time roles, but are taxed at a lower rate that provides for an increased take-home pay.

Drawbacks To Fractional Work

There are some drawbacks to fractional work. Like contract workers, these professionals may not receive any health and related benefits. Without guaranteed employment, they are constantly on the hunt for new openings. There may be times when the fractional worker is contracted with several companies simultaneously, and at other times, they struggle to find their next opportunity and don’t have a steady cash flow. The trade-off, however, is that the professional has greater autonomy when it comes to deciding where and when they want to work.

Source: Forbes