Why Fractional Teams Are the Secret to Hiring in 2023

The past month has felt like a layoff apocalypse—it started with Stripe laying off 1,000 employees, and was punctuated by Meta laying off 11,000. Goldman CEO David Solomon said there’s a good chance a recession is coming; Jeff Bezos declared it time to batten down the hatches; and in the past few weeks companies like Roku, Cisco, and Asana laid off whole chunks of their workforce. It’s no wonder that 23% of hiring leaders anticipate layoffs at their companies in the next 12 months. 

There’s been a vibe shift in tech, and the new vibe is very anxious.

Founders are justifiably worried about slower growth, higher interest rates, and diminished consumer spending. All this paired with a particularly rocky fundraising market is causing startup founders to exercise a lot more caution as they undergo their 2023 headcount planning. 

But these founders face a predicament: They still need to build high-growth products to hit their goals and make the case for that next round of funding.

Quietly, many top founders are bringing in the talent they need to accelerate product development while actually saving on costs. The secret? Instead of hiring full-time, they’re deploying fractional teams.

What are fractional teams?

Fractional teams are the next evolution of the fractional hiring trend that’s grown in popularity over the past few years. Fractional hiring means bringing on part-time talent to fill key functions and infuse an organization with expertise. It leverages highly-skilled independent workers that rent their time across multiple initiatives.

Instead of hiring just one individual, founders are able to hire an entire team—flexibly scaling their hours up and down based on the stage of product development they’re in. In the prototyping stage, for instance, you may need more product design hours. In the execution stage, more engineering resources are needed. 

During the Great Resignation, workers sought out higher salaries and more flexible work styles. Hiring managers report that staff turnover has increased dramatically since the pandemic started. With all these highly-skilled workers leaving big tech, fractional hiring has solved a problem for both workers and companies. 

With fractional hiring, founders can deploy a specialized, fractional team that’s already worked together before and is perfectly suited to build what they need to build, instead of painstakingly hiring individuals and forming them into a team over the course of 6-12 months.

A founder can use this model to extend their runway by hiring for multiple roles at once—without the long-term commitment of FTE. It’s a fundamentally different way of thinking about how we build companies.

Why fractional teams are so effective

Over the past two years at A.Team, we’ve built fractional, cloud-based teams for over 300 of the world’s leading companies. Integrating a fractional, cloud-based team is the talent equivalent of tapping into AWS for cloud computing power, and has the same potential to change how startups build. 

For companies still operating under traditional hiring models, too much ROI is lost on teams that are on pause between initiatives. The cost is high: in dollars, time, and growth. The use of fractional teams provides access to higher-quality talent at a fraction of the cost of traditional full-time hiring since you can scale your resources up and down at each stage of your product development cycle. Founders implementing fractional teams have saved 3x the costs of traditional hiring—you can see the pricing difference for yourself with our cost calculator.

There are a number of benefits to companies embracing fractional hiring, and since pioneering fractional teams at A.Team we’ve witnessed how incredible the results can be. 

Here are two examples:

For a startup like Blank Street, a fractional team enabled the non-technical founders to bring on a full product team before they even reached their Series A. As a community-oriented company, Blank Street had the vision to reimagine its in-app coffee ordering experience without compromising quality and customizability. In collaboration with Blank Street’s internal team, a fractional team deployed by A.Team developed a full-service ordering app from the ground up—giving Blank Street customers the local coffee shop experience without having to wait in line for their orders. The app helped them raise $67M and rapidly expand across the U.S. 

For an enterprise company like McGraw Hill, a fractional team allowed them to create the equivalent of an internal startup within the company. In 2021, McGraw Hill came to A.Team with a mission to bring studying into the social media era. In order to meet the increased demand for digital products brought on by the pandemic, McGraw Hill wanted to develop a learning tool that was not only cutting-edge but also affordable and accessible. A fractional team of 27 A.Team builders built the “TikTok for textbooks” app, Sharpen, in record time. Sharpen launched in the fall of 2022 and immediately shot up the app store charts—enabling a 130-year-old company to transform how thousands of students study.

Fractional teams and the end of mass layoffs

If you look at the notes from the CEOs of Stripe, Meta, and Apple, they all had a common narrative: They’d gotten ahead of themselves with hiring amidst the economic boom and grew their workforce too fast. But what if they designed their companies differently? Keeping a smaller core staff of FTEs and supplementing them with fractional teams based on the initiative at hand?

The truth is, many tech workers just don’t see traditional full-time jobs as tempting—or stable—as they used to. And for good reason: Corporate restructuring and layoffs have become common practice. Hiring leaders in the tech industry seem to be caught in a vicious cycle of hiring and firing, making it no surprise that the traditional 9-5 isn’t as safe of a bet as it used to be—68% of independent workers now say they feel more secure working independently than full-time, a figure that’s up more than 20% over the past three years. And as self-employment becomes more common, fewer workers are willing to return to FTE.

When we surveyed HR leaders last month, more than half reported being more likely to hire remote contractors than they were a year ago. With looming layoffs and full-time hiring in flux, it makes sense that the world’s top companies are recognizing the benefits of fractional teams. 

Fractional teams might just be the answer that hiring managers have been searching for: a new model for team building. While the past few weeks have been depressing, they’ve also been eye-opening. As the prospects for independent workers become more attractive, companies will have to meet workers halfway. As the saying goes: If you can’t beat ‘em, join ‘em. Fractional Teams are a way for companies to hire smarter not harder, allowing them to do more with less. Considering how unpredictable the economy and talent market has been, we anticipate HR leaders to continue leaning more heavily on fractional teams in 2023.