What is fractional recruiting for small businesses?

Fractional recruiting gives a small business an outsourced recruiting function on a flat monthly fee, with no permanent salary and no commission per hire. It is not one person on set days. A recruiting team works your roles under your brand, a recruitment manager oversees the work, and you deal with a single point of contact. It fits companies that hire in bursts, which is most small businesses, because the engagement runs in the quarters you are hiring and stops in the quarters you are not.

The alternative options are worse in specific, predictable ways. A permanent recruiter at roughly $110,000 to $140,000, rising to $150,000 to $200,000 for technical recruiters in the Bay Area and other major tech hubs, plus benefits and tools, sits idle in a slow quarter. An agency at 20-25% of salary is more expensive from the first hire and painful by the fourth. Doing it yourself is genuinely reasonable up to a point, and then it quietly becomes a part-time job nobody was hired for.

What does a small business actually get?

The hires matter, but for a company that has never had a recruiter, the process is often the bigger prize.

• A written definition per role. What the person owns and the two or three outcomes they are measured on, rather than a list of tools.
• Salary bands based on market data. Most small businesses are guessing here, and the guess surfaces at offer stage when it is expensive.
• A repeatable interview loop. Named interviewers, agreed questions, written scorecards. This is usually the single biggest quality improvement.
• Outbound sourcing. Direct approaches to people who are not applying. Small businesses have little employer brand pull, so waiting for applications is the weakest possible strategy.
• Someone owning the clock. Chasing feedback, scheduling loops, keeping candidates warm, and replying to the people who are not a fit before they go and write about the silence.

The loop, the scorecards and the bands stay with you after the engagement ends. So does the pipeline, provided the work has been done in your system rather than the provider's.

How the three options compare

	Fractional or embedded	Contingency agency	Permanent recruiter
Cost when you are not hiring	Pause the engagement	Nothing	Full salary
Cost of four hires in a year	Unchanged monthly fee, $5,000 to $10,000 a month by number of live roles	Four times 20-25% of salary	Unchanged salary
Builds your internal process	Yes	No	Yes
You keep the pipeline	Yes	No	Yes
Sensible at	Consistent, ongoing hiring	A single hard role you may never fill	Continuous hiring, indefinitely

For a business hiring in bursts, the middle column is the one to watch. Contingency is more expensive from the first hire: 25% of a $150,000 salary is $37,500 for one person, where a three month engagement with us is $15,000 and covers the hires made inside it. The only honest case for contingency is that if you hire nobody at all, it costs nothing.

When should a small business not do this?

Being clear about this is more useful than the pitch.

• You are making one hire, with no deadline and no repeat need. Run it yourself. Your own network and your own pitch will beat anything external at this size. Have the conversation anyway, because the process work is cheaper to do before the volume arrives.
• Your referral network is still producing candidates who convert. Use it until it stops working, which it eventually does once you hire outside the founders' own discipline.
• You have not agreed what the role owns. No external recruiter can settle an internal disagreement about the job. Finish that first.
• The headcount is not approved. An engagement that reaches offer stage without a signed-off band stalls in the most expensive place possible. Approved headcount counts here even before a round closes.
• Hiring is genuinely continuous and will stay that way. At that point a permanent recruiter starts to make sense on cost, and helping you get there is the point of the engagement.

What does the first month look like?

A reasonable month one, and a fair thing to hold any provider to:

1. Week one. Intake per role, salary benchmarking, interview loop agreed and interviewers named.
2. Week two. Market map per role. How many people exist in your band and area, where they work now, what they earn. Roles sometimes get redefined here, which is the map doing its job.
3. Weeks two to four. Outbound sourcing, first screens, written scorecards.
4. End of month one. A live pipeline on every role in scope and a shortlist on at least one.

An offer signed inside thirty days is possible but should not be promised. What should be there at day thirty is structure: the map, the pipeline, the loop. The opening engagement runs three months for that reason, then moves to month to month. There is no long-term contract, and three months is simply long enough to learn the business, the roles and the process well enough to improve them.

How do you know it is working?

Four things, tracked simply.

• Time to hire, measured against your own baseline before the engagement started.
• Cost per hire including your own hours. Founder time is the most expensive input and the one that never appears in the comparison.
• Retention at twelve months. A fast hire who leaves at month seven is the same search run twice.
• What you still have afterwards. The bands, the loop, the pipeline. If nothing outlasts the engagement, you rented hires rather than building a hiring function.

If you want the wider version of the decision, what is fractional recruiting covers the model itself, and small business recruiting covers how we run it.