Why fractional executives may not be the silver bullet businesses think

Growing fractional executive trend faces scrutiny as experts question long-term sustainability and warn of potential talent market disruption

Sunday, August 17, 2025
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Why fractional executives may not be the silver bullet businesses think

The growing appeal of fractional executives represents one of the most significant recruitment trends of 2025, but industry experts are questioning whether this model will prove sustainable as businesses discover potential long-term drawbacks.

After the pandemic's intensity, many C-suite executives are abandoning traditional permanent roles in favour of portfolio careers, attracted by flexibility and reduced corporate risk exposure. However, this shift could create unintended consequences for the broader talent market.

Market dynamics and talent drain

Sophie Randles, director at executive search firm Livingston James, warns that the exodus of senior executives toward fractional arrangements may leave larger companies struggling to fill permanent leadership positions. This challenge is compounded by demographic shifts and a shortage of next-generation leadership talent in the UK market.

"The rise of fractional executives is a reflection of the complexity of modern business life — no individual can be a master in domains as disparate as AI, ESG, digital transformation, and geopolitical developments," Randles explains. "But it may not be the right approach for every business."

The model has gained particular traction in rapidly evolving sectors including technology, biotechnology, manufacturing, and professional services, where specialized expertise commands premium rates but may only be required for specific growth phases.

Strategic applications and limitations

Fractional CFOs exemplify the targeted expertise these arrangements can provide. Organizations may require specific experience in internationalization, exit preparation, or particular growth initiatives during different phases of their development cycle. The fractional model enables start-ups to access seasoned expertise while maintaining lean operational structures.

Roles such as fractional chief financial officers, chief marketing officers, and chief operational officers have proven most relevant for business transformation initiatives, evolving significantly throughout a company's lifecycle. These positions offer organizations the ability to "borrow" wisdom from industry veterans without the commitment of permanent appointments.

For executives themselves, the portfolio approach provides opportunities to share expertise across multiple organizations while maintaining professional autonomy and reducing exposure to single-company risks.

Sustainability concerns

Despite initial enthusiasm, questions remain about the long-term viability of the fractional executive model. Industry observers draw parallels to hybrid working arrangements that emerged during the pandemic, noting that some flexibility initiatives later proved misaligned with organizational needs.

The complexity of modern business transformation requires deep institutional knowledge and sustained leadership commitment that may be difficult to achieve through part-time arrangements. Organizations implementing digital transformation initiatives, in particular, often require continuous oversight and cultural change management that extends beyond project-based engagements.

Market implications

The trend toward fractional leadership reflects broader changes in executive expectations and organizational structures. As businesses navigate economic uncertainty and rapid technological change, the appeal of flexible arrangements continues to grow among both executives and organizations.

However, the concentration of experienced leaders in fractional roles may create talent bottlenecks for companies requiring permanent leadership during critical growth phases or major transformation initiatives. This dynamic could ultimately drive up costs for both permanent and fractional executive appointments.

Organizations considering fractional arrangements must carefully evaluate whether their specific needs align with the inherent limitations of part-time leadership structures, particularly for roles requiring deep cultural integration or long-term strategic continuity.

This analysis is based on reporting by Sophie Randles, originally published in The Scotsman. Randles is a director at Livingston James, a leading executive search firm.

Tags:

Fractional Leadership Interim Management Executive Search Business Transformation Digital Transformation C-Suite Talent Management Portfolio Careers

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