Fractional HR head vs full-time HR manager: cost, scope and when to switch

A founder told me he was hiring an HR manager. What he described needing was somebody to fix a grievance he was in the middle of, redesign the appraisal, and also keep payroll inputs clean and files in order. Those are two different people, and the market rarely sells them as one at a price a hundred-person business will pay.

What usually happens is a compromise hire — someone mid-level, capable on administration, out of depth on the judgement calls — and the founder keeps handling the judgement calls anyway, now with a salary attached.

Two capabilities, not one role

Separating them makes the decision much easier.

• Administration and operations — employee records, joining and exit paperwork, attendance and leave administration, payroll inputs, letters, compliance tracking, first-line employee queries. Continuous, high-volume, and needed every week.
• Judgement and design — a key person resigning, a complaint about a senior manager, whether to restructure, what the salary structure should be, how to handle a performance case, what to do when two managers are in conflict. Episodic, high-stakes, and needed a few days a month.

The first needs presence. The second needs experience. Businesses that fail to separate them tend to buy the wrong one, or buy one and expect both.

What each actually costs

Comparing salary to fee misses most of the cost, in both directions.

                        FULL-TIME HEAD        FRACTIONAL HEAD
-----------------------------------------------------------------
Cost basis              monthly salary,       agreed days
                        fixed                 per month
Also carries            statutory costs,      -
                        seat, equipment,
                        leave, notice
Availability            every day             agreed days +
                                              escalation
Depth of experience     what you can          typically senior;
                        afford at your        you are buying
                        size                  a slice of it
Institutional memory    builds over time      builds slower;
                                              needs your records
                                              to be in order
Risk if they leave      a gap in everything   engagement ends,
                                              records remain
Best suited to          continuous volume     episodic judgement

Neither replaces the administrator. Both assume somebody
is keeping the records straight week to week.

That last line is the one most often missed. A fractional head arriving into a business with no administration finds their days consumed by catching up on records rather than on the decisions they were engaged for. Getting the administration straight first — records, payroll inputs, the joining and exit paperwork — is what makes senior time worth buying, and it is ordinary HR process consulting work rather than anything that needs a senior hire.

Which one, for where you are

1. 1

   Under about fifty people

   Usually an administrator plus the founder, with outside help for specific pieces. A full-time senior head at this size is buying judgement you need a few days a month and paying for it every day.

2. 2

   Fifty to about a hundred and fifty

   This is where the split works best: a capable HR executive or administrator internally, plus a fractional head for the judgement, the design work and the cases that need experience. The founder stops being the escalation point without carrying a senior salary.

3. 3

   Above roughly a hundred and fifty, or multi-site

   The judgement work becomes continuous rather than episodic, and a full-time head starts to make sense — often recruited with the fractional head's help, which is a better brief than most businesses write alone.

These are not thresholds so much as descriptions of when the judgement work changes frequency. A ninety-person business across four locations may need a full-time head before a two-hundred-person single site does.

The signal to switch

Not headcount. Frequency. Track how often something genuinely needs senior HR judgement — a case, a structural decision, a difficult exit, a policy call with real consequence.

While that is a few times a month, fractional is the efficient answer. When it becomes weekly, and when the fractional head is being contacted between scheduled days more often than not, the economics have changed and a full-time hire is the cheaper option as well as the better one.

That is the honest test fractional HR management should be measured by, and a fractional head worth engaging will tell you when you have crossed it rather than waiting to be asked.

What to look for in either

• Willingness to say what is not working in front of you, early. An HR person who agrees with the founder in every meeting is expensive company.
• Evidence of having handled the difficult cases — a resignation of a key person, a complaint against a senior manager, a redundancy — rather than only process design.
• A bias toward leaving something behind. Written rules, trained managers, records in order. Someone who becomes the single point through which everything runs has recreated your original problem at a higher salary.
• Comfort with your size. Senior HR experience from a large organisation does not always translate; a policy suite designed for two thousand people will not be adopted by ninety.

What either one needs from you

Both fail in the same way: appointed, given a mandate, and then routinely bypassed when an employee comes directly to the founder. If leave approvals, exceptions and grievances continue to be settled in your cabin, no HR arrangement works, because everyone quickly learns which route produces an answer.

The precondition for either is that decisions have somewhere else to go — written limits, named approvers, and a founder who redirects the first few attempts visibly. That is organisation design work, and it is worth doing before the appointment rather than after, because it is what turns an HR hire into leverage rather than an extra queue.

A third option most businesses overlook

Between the two sits an arrangement that suits a lot of companies and is rarely named: a capable administrator internally, plus outside help engaged for defined pieces of work rather than on a standing basis. A policy rewrite, a structure review, an appraisal design — each scoped, delivered and finished.

This works when the judgement need is lumpy rather than regular: a few significant pieces a year and not much in between. It works badly when cases keep arriving, because a project engagement has no obligation to be available on the Tuesday a key person resigns.

The distinction is worth being honest about when you choose. Businesses often buy project work when what they actually need is availability, then feel let down by an arrangement that never promised it. A standing fractional HR management engagement carries that availability; a project does not, and neither is better in the abstract.

How to decide this month

Take last quarter and list every HR matter that reached you personally. Mark each one as administration or judgement. Count the judgement items and note how many needed an answer within a day.

If the judgement list is short and mostly not urgent, you need an administrator and occasional help. If it is short but frequently urgent, fractional. If it is long and weekly, you are already carrying a full-time head's workload yourself, and the only question left is whether you keep doing it. That inventory takes twenty minutes and settles the question better than any headcount rule — and it is the same exercise that tells you which decisions should have been delegated in the first place, which is organisation design work rather than an HR hire.