Filling Skill Gaps: Traditional vs. Fractional Hiring

The AI market is growing exponentially. It’s projected to reach over £800 billion in the UK by 2025, with 93% of IT decision-makers already investing in AI. Companies now face a tipping point: their competitive edge depends on their ability to secure the best AI and Data talent.

However, there’s a problem. While 81% of IT professionals believe they can use AI, only 12% possess the skills to do so effectively. According to Reuters, there is a 50% skill gap for AI-related positions, which is alarming. This discrepancy likely explains why nearly 75% of employers struggle to find qualified AI candidates.

Hiring traditional full-time employees with the intention of long-term tenure has its benefits - strong team cohesion, loyalty, and deep integration, to name a few. However, traditional hiring is challenging during tough markets or when trying to fill niche roles (like AI, Data, and Machine Learning) where the talent pool is tiny. 

Rather than sidelining projects while waiting for a full-time, qualified candidate to become available through traditional hiring channels, some businesses are changing their approach. Instead, they’re hiring fractional AI and Data professionals on a part-time or project basis. 

In this article, we’ll explore the key differences between traditional and fractional hiring and outline when to use each strategy to fill specific skill gaps in your team.

 

Speed.

Speed is crucial to stay ahead of the artificial intelligence curve. Most companies cannot afford to wait for the perfect full-time candidate to appear. Doing so risks delaying key projects and falling behind the competition. In addition to waiting for the right talent, traditional hiring processes often take weeks or months. 

Hiring a long-term employee is a significant commitment, so many leaders engage candidates in multiple interviews with various stakeholders to assess whether they’ll fit the role and company culture.  While cultural fit remains essential for any hire, interview processes for fractional roles can be streamlined to introduce candidates to the key individuals with whom they’ll collaborate.

Additionally, full-time hires often have lengthy notice periods, so even after securing an ideal candidate, there may be a waiting period before they can start. Once onboard, full-time hires typically require time to settle in, which is understandable given their long-term commitment to the company. In contrast, fractional employees are highly adaptable. They are adept at quickly integrating into any organisation, assessing immediate needs, and making an impact.

 

Cost.

Cost is a significant challenge when hiring traditional full-time, permanent employees, especially at the leadership level. Take a Chief Technology Officer, for example. A full-time CTO might expect an annual salary of £200,000 plus benefits such as bonuses and pension contributions. For a fraction of that cost, you could hire a fractional CTO on a part-time basis. If your budget allows, you could even onboard multiple fractional leaders for the same cost as one full-time employee.

 

Flexibility.

If you’ve created a positive work environment and company culture, full-time permanent hires will likely be loyal and offer long-term tenure. This is excellent for fostering strong team cohesion and deep integration but can be an additional challenge during turbulent times. Furthermore, hiring a full-time employee may not be necessary in AI and Data, where work is often project-based.

Although you could hire a full-time employee and upskill or transition them to a different department when priorities change, or their short-term goals are complete, this could significantly impact employee engagement. Companies often make full-time employees redundant when projects end due to completion, market changes, or budgeting issues. This damages their reputation and makes future hiring even more challenging.

Fractional hiring, on the other hand, offers complete flexibility and scalability. As demands fluctuate, you can easily adjust fractional employees’ working hours or contract length. This approach allows you to keep costs agile, protect employee satisfaction, and maintain your reputation in the broader market.

 

Skills.

Since the COVID-19 pandemic, there’s been an increase in the number of professionals prioritising balance and flexibility, particularly in forward-thinking sectors like AI and Data. As a result, a number of people have opted to become fractional consultants rather than full-time employees. This shift offers them flexibility and an improved work-life balance while keeping them engaged and fulfilled. By working on multiple projects with multiple companies simultaneously, they stay ahead of the curve in their personal development and remain up to date with the latest trends.

When hiring a traditional full-time employee, it’s common to assess candidates based on their years of experience or area of expertise. In most cases, candidates - especially at the leadership level - will have worked in only a handful of companies. While longevity often indicates a loyal employee, fractional employees offer a unique advantage. Most fractional leaders have partnered with at least five to ten companies during their careers, often across various industries, sectors, and company sizes. As a result, they bring a diverse range of perspectives to your team.

By considering fractional hiring, you open the door to a much wider talent pool and increase your chances of a successful hire.

 

Comparative Analysis.

Your company’s specific needs and goals will determine whether traditional or fractional hiring is better for a particular role.

Generally, traditional hiring is preferable for long-term strategic roles that drive core business functions and require a deep organisational understanding, during ongoing projects with predictable timelines, and when budgets and timelines allow for a somewhat lengthy recruitment and integration process.

Fractional hiring, on the other hand, excels when needs are project-specific, where your team would benefit from the support of a specialist or expert that doesn’t warrant a full-time role; when it’s preferable to access expert skills without the financial burden of a full-time salary and benefits package; and when agility is essential for rapidly onboarding and offboarding talent in response to fluctuating demands and budget constraints.

 

Conclusion.

Staying ahead of the curve is essential, particularly when building AI and Data teams in a candidate-driven market with a significant talent shortage. Traditional hiring offers long-term strategic benefits, strong team cohesion, and deep integration into company culture but can be slow, costly, and inflexible during market fluctuations. 

Fractional hiring, in contrast, is cost-effective, flexible, and adaptable, though it requires careful management of part-time employees to ensure clear communication and effective integration.

Whether you’re looking to seamlessly fill a skill gap with fractional talent or would prefer to integrate a full-time, long-term expert into your team, Generative can help build a tailored solution that will propel your business forward and keep your AI and Data teams ahead of the curve.