Fractional

It's not contracting

Photo by Victoria Strukovskaya on Unsplash

Recently, I've been doing some consulting work for an eCommerce company. I started by designing a new data architecture to serve their needs that was based on interviewing stakeholders there. I have been setting them up with a foundational data stack, as well as bringing on and leading other consultants to work on the project. While some of the other consultants have worked closer to full time on the project, I have spent much less as it's not my primary focus. All of us are fractional and are not contractors with set hours and an internal line manager.

Can this be a model for how many companies can "Win with Data"?

Even with this coming economic era, there is still a shortage of data and engineering folks. Yes, it may be less acute, with hiring shortages and layoffs, but the demand curve is still way above the supply one. Many businesses that aren't funded with VC money, or are otherwise very cash rich, will still struggle to hire the right people. I stress right people: it's important. What I've seen is that there is a legacy of technical debt in some of these companies, from hiring the wrong people.

Why did they hire the wrong people?

• Sometimes they didn't have the people internally who understood how to hire for the foundational leadership roles

• If the foundational leaders hired aren't competent, and don't have the company's interest at heart, they will hire others who are similar to themselves or perhaps even worse

• Their understanding of what is a good and competitive salary in the market to hire top talent is wrong - they compare it to other senior leaders in the org

The result is poorly designed and implemented architecture, which takes more labour than necessary to run and maintain, and which is fragile. Sometimes the bad actors who put this in place do this intentionally, to make themselves indispensable. This allows them to continue at the company, underperforming, as only they know how anything works. There is next to no documentation of what systems exist and are running, or how they depend on each other. If you pay peanuts...

Essentially, when hiring employees, you need to do it really well or perhaps not at all. What I've realised from my experience on the project I mentioned at the start, is that it is better for a company that can't hire well to use consultants and freelancers instead.

Consultants and freelancers rely on their reputation to continue to work, and the quality of their work as a reason to keep using them. If they don't deliver to standard, they're gone that day or even that hour.

Pros and Cons

Pros to the organisation using the freelance fractional consultant (FFC):

• They can have a highly skilled, motivated person

• They don't have to invest in an expensive lengthy recruitment process, with no guarantee of success

• They can use the consultant as much or as little as needed, with breaks if the project stalls

• There is no impact on their salary distribution from hiring expensive engineers and data folks

• They don't have to provide expensive equipment to FFCs, who use their own

• They don't have to worry about the consultant leaving and being permanently inaccessible - consultants are financially motivated to keep helping their clients. The consultants don't really leave or stay as such: they may work to a greater or lesser extent for a client on an ongoing basis. Because of this, the consultant is more invested in doing good work, as they may be on the hook for maintaining it for a very long time

• They don't have to manage the consultants - the consultants are responsible for managing themselves and getting the project done

• They aren't responsible for all the benefits and other care that an employee needs

• As the consultants are already skilled, they don't need to be trained or mentored by the organisation. They don't need to be line managed

• It’s easier to get approval to start using an FFC than to hire an employee, which requires rigour and commitment in terms of budgeting and other internal processes

Cons to the organisation:

• They can't really tell the consultant what to do - they can ask and cooperate and a good consultant will be flexible, but is still independent

• If the FFC is blocked, they will take the steps to say they are and what they need, but will then move on to working on something they can progress which may be somewhere else. In theory, the project could move faster if the consultant was more forcefully trying to unblock themselves, but then you'd be paying the consultant to do this, which is an inefficiency

• Remaining employed bad actors don't work well with FFCs - there is a conflict between power and pragmatism

• FFCs aren't dependent on them so they have to be treated respectfully, unlike traditional contractors, or they will simply reduce their attention on the project

Pros to the FFC:

• They're their own boss

• They work the hours they want

• They work where they want

• They set their own pay, according to market conditions

• They can use their own equipment and software, making them more efficient

• The clients have come to them as the expert and to be told what to do, instead of the opposite being true as an employee. Clients more readily take advice from consultants than from their own employees

• They aren't dependent on any one contract/client/employer as a source of income. When a project dries up, they can work more on another or take on another. There is no heartache or fallout from losing employment

• They get varied work and don't have to commit to working in any one industry

• If they're treated inappropriately, they can just reduce the hours worked for the client to zero

• They don't have to be so invested in the rise and inevitable fall of any one company

• They don't have to play politics: if the company is difficult or doesn't want to accept their solutions, they can simply move on

• They don't have to line manage, yet they can still lead a team of consultants working towards the same aims

• They can execute their projects however they want to, especially as lead of the project

Cons to the FFC:

• They're their own boss, they need to make things happen

• They need to ensure they have enough work to live and aren't too reliant on any one client

• It's hard to get started and build a portfolio of work sufficient to live on

• Clients can negotiate their price down, as they would any other service

• Clients can treat you badly without many repercussions

• You do miss out on being part of an organisation with a great mission

• You have to be able to work alone and solve problems by yourself or to be able to find advice through other means - there is no line manager to fall back on

• There are some industries that won't allow for FFCs, owing to security concerns

Difference to Contracting

Traditional contractors have hours set by the companies who have hired them, they have equipment provided to them too. They are very similar to employees but without the associated benefits and security. This is why they often ask for a much higher day rate than an FFC would - although both have to pay for their own benefits, the contractor has to be paid enough to possibly be out of work between contracts or if they are unexpectedly let go. FFCs in contrast have the security of multiple projects and clients to fall back on, plus the ability to work as many hours as they desire on a day with commensurate higher earnings; providing a cushion for holiday and leaner times.

Conclusions

I'm not saying that running a data team with FFCs would be ideal for every situation at all - you see highly successful companies that almost exclusively have employees. My point is that, for organisations that don't have the cash or the ability to hire really well, this is probably a better option than a poor to mediocre internal team. If data and engineering folks are scarce, great ones are like gold dust.

As part of the project I’ve been working on, I’ve also been introducing great people I could help the company hire as employees to provide a strong permanent data discipline too. I think this is a natural conclusion to a long project as an FFC.