Use fractional hiring to stay on plan when cutting costs – Nob6
Venture funds are clear: given the uncertainty of the coming few years as the Fed seeks to unwind its decades-long monetary policy, the mandate for CEOs is to:
- Cut burn;
- Slow growth;
- Carefully manage towards profitability.
This is a tough pill to swallow for founders who were planning to accelerate growth this year. Open Twitter and you’ll find a cacophony of founders, investors, and advisors doling out advice for what to do next: downsize your product offerings; freeze all hiring; consider mass layoffs.
The fact is, you can indeed cut burn and manage toward profitability while still defaulting to growth. In fact, that’s how the winners of this downturn will pull ahead.
To manage their huge levels of risk, large companies must freeze hiring. If you’re an entrepreneur, this is good news for you.
So what does that look like?
Fractional hiring is a growth cheat code
We’ve been operating as a bootstrapped business for close to a decade, so we’re familiar with forecasting budgets around very conservative scenarios, and adjusting within 30-day or 90-day windows. This has allowed us to not only stay profitable, but be nimble as well. When faced with economic chaos in March 2020, we maintained our growth rate by quickly adjusting budgets.
Instead of pausing hiring and delaying our team’s ability to execute, we employ a fractional model for hiring. As we’ve scaled headcount over the years, we’ve always tried to bring on key people first as (typically, part-time) contractors, and then convert them to full-time employees.