the true cost of hiring an executive: why fractional is better

Feb 11

a high-stakes decision with hidden costs

Hiring an executive is a major investment for any growing company. While strong leadership can be transformative, the true cost of bringing on a full-time C-suite executive is often underestimated.

For companies in the $1-50M revenue range, a full-time hire may not always be the best option. Let’s break down the real expenses and explore why fractional talent could be the smarter, more cost-effective choice.

the true cost of hiring a full-time executive

The cost of hiring an executive goes far beyond their salary. Here's what you're really paying for:

1. recruitment & hiring costs

The average cost per hire is around $4,700, but for executive roles, this can skyrocket to $15,000 or more.
Time to hire: Executive searches can take months, delaying critical business initiatives.

2. salary & benefits

Executive compensation often includes base salary, bonuses, stock options, and benefits, which can amount to 10% or more of total employer costs (ADP).

3. onboarding & training

Companies spend an average of $986 per employee on training (ADP), but for executives, this cost is often significantly higher.

4. the cost of a bad hire

If the executive doesn’t work out, the financial impact can be at least 30% of their first-year earnings (Forbes).
Beyond financial loss, a poor fit can cause internal disruption, cultural misalignment, and lost productivity.

the fractional executive alternative

For growing companies, fractional executives offer a compelling solution:

Cost-effectiveness: Access senior-level expertise without the full-time salary commitment.
Flexibility: Scale engagement up or down based on your current needs.
Immediate impact: Fractional executives can start within days, providing immediate impact.
Reduced risk: Minimize the financial impact of a potential bad hire, which for small companies can be a five-figure mistake.

long-term benefits of fractional talent

Hiring fractional executives isn't just a short-term fix; it can provide lasting value:

Knowledge transfer: Fractional executives often mentor your team, implementing systems and best practices that remain after their engagement ends.
Cross-industry insights: Benefit from their experience across multiple companies and sectors.
Work-life balance for executives: Fractional roles allow experienced leaders to contribute their skills while maintaining flexibility.

how solace can help your business

For companies in the $1-50M revenue range, Solace offers a unique solution:

Pre-vetted talent: Access experienced executives without the lengthy recruitment process.
Quick start: Get the expertise you need within days, not months.
Cost-effective: Leverage executive-level talent at a fraction of the cost of a full-time hire.
Flexibility: Scale your executive team as your business grows, without long-term commitments.

By choosing fractional executives through Solace, you're not just saving on hiring costs - you're investing in quick-moving, experienced leadership that can drive your company forward without breaking the bank. The ability to bring in the right leadership - at the right time - can mean the difference between stagnation and scalable growth.