The Growing Trend Of Outsourcing Executive Leadership


three young diverse business people working together in blurry abstract city with double exposure of financial chartsThe outsourcing industry has become one of the fastest-growing sectors in the world. While outsourcing was once thought to be a solution for tactical needs, it has increasingly moved upmarket to the strategic, executive level. Rather than hiring full-time executives, companies are hiring an outsourced or interim executive to play an accountable leadership or advisory role in a part time capacity.

The growing trend allows small and mid-size businesses to benefit from the knowledge and expertise of seasoned C-level executives at a much lower cost. Increasingly, more companies rely on outsourced resources as an integral part of their business strategy. Although some turn to outsourcing because of resource limitations, it often works to their advantage.

With new customer demands, competition, technology, regulations and threats evolving constantly, it is incredibly challenging for small and mid-size businesses to stay on top of everything —whether it’s HR, accounting, cyber risk and security, or compliance. If you are considering whether this approach is right for you, here is what you need to know.

Why More Businesses Are Turning To Outsourced Executives

The concept of outsourced executives—sometimes referred to as “fractional executive leadership” has gained traction over the last ten years. And for good reason. It offers small and mid-sized companies that were previously unable to support these roles an opportunity to benefit from working with strategic, C-level executives on a part-time or advisory basis.

Fractional executives bring seasoned experience and leadership skills, without the expense of a full-time executive. Thus, companies gain access to these senior advisors and decision-makers at a lower cost than full-time employees without sacrificing quality or knowledge. Outsourced executives can also act as advisors or mentors for growing leaders within the organization.

They Offer Valuable Insight From An Outside Perspective

young businessmen using touchpad at meetingCompanies that are evaluating the pros and cons of outsourced executives for the first time may be hesitant to trust someone outside the business. How could an individual offer truly customized guidance without working inside the organization?

Fractional executives offer the unique—and valuable—benefit of providing an outside perspective. The fact that these executives do not work solely within your company is an often-overlooked advantage. They can see more objectively where your people, processes, and technology are breaking down and where improvements can be made based on experience.

This is often less true of executives who have spent years within your ecosystem. Change occurs so gradually that it can be difficult to see the new patterns that have been established slowly over time.

Additionally, your team may be more open to discussing ideas, challenges and opportunities with someone outside the organization. Some employees feel out of place or reluctant to bring up issues or concerns with in-house staff because they work with them daily. These same employees are more likely to speak freely with an outsourced executive, leading to more pertinent feedback and change.

They Have Experience Across Several Markets

The best executives offer a broad range of experience, and this becomes easier to find when working with a fractional executive. Since these professionals are not working in-house at one company, they have the opportunity to assist multiple businesses across large sectors of the market.

It may be that a strategy that works well in a completely different industry could inspire powerful change within your operations. Outsourcing executive leadership grants a business access to professionals who have a broad range of current experience to view your problems and challenges with a fresh perspective.

They Understand How To Innovate And Lead Companies

company executives in a meetingSimilarly, the spectrum of companies that outsourced executives get to work with equips them with the tools and wisdom to innovate regardless of the market. They have seen strategies succeed in a wide variety of circumstances, and so they have an idea of what consistently works. Innovation often arises out of creativity—and outsourced executives are exposed to far more (and more varied) situations than an in-house team.

They Are More Cost-Effective Than Full-Time C-Level Executives

In the era of the Great Resignation, the hiring market is extremely competitive, and top candidates demand high salaries and benefit packages. Outsourcing executives provides an option for companies to contract with senior executives and fill roles they may never have had the budget to fill in the past. In a time when it is difficult to both attract and retain employees at all levels, outsourcing ensures that a company will not spend the money to find, hire and onboard senior executives only to lose them shortly thereafter.

They Are Ideal For Growing Companies

Fractional executives can help growing companies that can’t afford or don’t yet have a full workload for someone in a full-time capacity. A major advantage of outsourced executive leadership is its accessibility. Previously, only large companies could afford to maintain a full C-suite.

With outsourced leadership services, small and mid-sized companies can access the leadership needed to grow. Positions that were previously not in the budget to fill are now more affordable, so you can benefit from personalized guidance to help grow and scale your business.

The Types Of Executives That Are Most Often Outsourced

The trend to outsource has grown across all functions of business. Here are the most common executives leaders that work well on a fractional basis:

Chief Information Officer (CIO)

cio conceptA chief information officer (CIO) is a strategic business and IT executive who manages the IT portfolio – including people, processes, data, technology, and often, cybersecurity. The CIO works with executives across every function of the business to develop an IT strategy and IT governance structure that drives and supports the overall business goals.

This means the CIO needs to be able to understand the broader business requirements to help the rest of the organization make the most of technology. An outsourced CIO is often responsible for digital transformation and innovation.

Chief Information Security Officer (CISO)

Not to be confused with the CIO, the chief information security officer (CISO) takes control of the security and protection of a company’s intangible data. A chief information security officer will drive the cyber risk management program, including identification of potential vulnerabilities that could compromise data. A CISO is an important part of any business , and they are required for compliance in some regulated industries, including healthcare.

Chief Operating Officer (COO)

A company’s COO is in charge of the day-to-day operations of a business. They are responsible for determining and promoting policies that support the company’s vision and goals. They carefully craft procedures to uphold company culture and keep the business on track in its operations. When the CEO of a company makes decisions, it is the responsibility of the COO to make sure that those decisions are implemented in an actionable way.

Chief Marketing Officer (CMO)

A CMO is in charge of a company’s marketing efforts. This includes planning and executing marketing, advertising, and digital strategies and serving as a creative resource for the business. They may work in tandem with the CIO or other positions to interpret the data gathered from marketing efforts to improve future campaigns.

Chief Financial Officer (CFO)

young entrepreneur working on a virtual screen of the future and sees the inscriptionA CFO’s main role is to lead the financial management of a company. They will advise other leaders (such as the CEO or board) on the best direction to take to achieve the company’s financial goals, and are in charge of breaking down the company’s accounts in a digestible and actionable manner. They may be in charge of reconciling accounts and optimizing how a company approaches its finances to avoid excessive spending or debt obligations.

Chief Human Resources (CHRO)

The CHRO is the senior executive responsible for managing human capital and other HR-related technology systems. This role may also be referred to as a chief people officer.

Get Started With An Outsourced Executive For Your Business

Outsourced leadership is a powerful tool to help your business grow. When it’s time to add a CIO to your organization, outsourcing the role is a strategic move that comes with many benefits. Hartman Executive Advisors offers middle-market companies and nonprofit organizations the opportunity to work with CIOs on an outsourced basis to help companies leverage IT to achieve their business goals. Reach out to learn more about our services or to schedule an appointment to get started.


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