Fractional executive vs full-time hire

Salary is the smallest honest number in the comparison. A $300,000 base carries:

• Payroll taxes and benefits: 20 to 30 percent, or $60,000 to $90,000
• Equity: 0.5 to 2.0 percent, with real dilution cost
• Recruiting: 20 to 30 percent of first-year salary if retained search, or $60,000 to $90,000
• Ramp: 3 months at reduced output, effectively $75,000
• Severance risk: 3 to 6 months if the hire does not work, and executive mishire rates in the 30 to 40 percent range are widely reported

First-year all-in cost lands between $470,000 and $560,000 before equity. Steady-state loaded cost is $360,000 to $390,000.

A fractional executive at 30 hours per month at $13,000 costs $156,000 per year. There are no payroll taxes, no benefits, no recruiting fee if hired through a direct marketplace, no severance, and usually no equity.

Ramp is shorter because fractional operators have done the same first 90 days repeatedly. Two weeks to productive is normal against three months for a full-time hire.

The honest downside is availability. Thirty hours a month is thirty hours. If the role requires daily presence, hourly responsiveness, or deep team management, the number of hours becomes the binding constraint regardless of the operator's quality.

• Annual cost: fractional $75,000 to $220,000; full-time $360,000 to $560,000 first year
• Time to start: fractional 1 to 3 weeks; full-time 12 to 24 weeks
• Time to productive: fractional 2 weeks; full-time 12 weeks
• Exit cost: fractional 30 days notice; full-time 3 to 6 months severance
• Equity dilution: fractional rare; full-time 0.5 to 2.0 percent
• Availability: fractional 20 to 40 hours per month; full-time full availability
• Team management depth: fractional suits 1 to 3 direct reports; full-time suits larger orgs
• Breadth of experience: fractional operators typically carry 3 to 8 comparable engagements

Four questions decide it.

How many hours does the function actually need? Track the founder's time on it for two weeks. If the honest answer is under 40 hours a month, fractional wins outright.

Is the mandate a build or a run? Builds, meaning a fundraise, a turnaround, a launch, a certification, suit fractional. Ongoing run-state functions with large teams suit full-time.

How large is the team under the seat? Above roughly eight direct and indirect reports, part-time management degrades quickly.

How certain is the strategy? If the company might pivot within a year, a fractional executive is a cheap option on the decision, while a full-time hire converts a reversible choice into an expensive one.

Option A, full-time CMO at $260,000 base. Loaded cost $325,000, plus $65,000 retained search, plus three months ramp. Year-one cash cost around $455,000. Available in month four at the earliest.

Option B, fractional CMO at 30 hours per month at $15,000. Year-one cost $180,000. Starts in week two.

The $275,000 difference funds roughly two mid-level marketers or nine months of a demand generation program. For a company still validating channel mix, option B plus two operators usually produces more pipeline than option A alone, and preserves the ability to hire a full-time CMO in twelve months once the motion is proven.

Do not force fractional where it does not fit. Hire full-time when the function has more than eight people reporting into it, when customers or regulators expect a named executive available daily, when the role requires deep institutional context accumulated over years, when you are preparing for an IPO or a regulated transaction, or when the strategy is settled and the work is steady-state execution rather than a build.

The common sequence is fractional first, full-time later. The fractional executive builds the function, defines the role precisely, writes the scorecard, and often runs the search for their own successor.

This lowers mishire risk considerably, because you hire against a job description written from operating experience inside your company rather than a generic template. Roughly one in four fractional engagements converts to a full-time relationship with the same operator.

If the honest hour count is under 40 per month, post a private mandate on RecruitFractional and compare reference-verified fractional operators against your full-time search before committing to either.