As a growth-oriented business, you believe in keeping a close watch on your financial health. However, it takes experienced specialists to successfully complete some of your critical back-office jobs. While you want that industry expertise on your team, the actual tasks don’t always equal a full-time resource. Additionally, paying someone a full salary for part-time work isn’t always in your budget or scope — no matter the importance. This scenario gave rise to fractionalized business services, and it could be the model your company needs.
This article will help you better understand the benefits and drawbacks of this in-demand outsourcing offer. It’s possible to hire the people you need to succeed without exceeding your staffing budget.
Fractionalized business services provide companies with qualified contractors for a fraction of the time and cost they would normally spend on a full-time employee.
The concept rests in the opportunity to hire a skilled professional who can complete essential tasks without you having to have someone on-staff all the time. It’s the perfect solution for jobs with critical assignments on a weekly, monthly, and annual basis, but the actual work doesn’t fill up a standard 40-hour workweek.
In a nutshell, it comes down to lowering costs and improving efficiency.
In a traditional workplace model, your company will hire a full-time person internally to handle the tasks foundational to the business. The thinking goes, “These are important jobs, and we want to have someone on staff at all times to ensure it gets done.” And yes, businesses have operated that way for centuries, but sometimes, you need to look for new methods of operation, especially when trying to cut costs.
Choosing fractionalized business services with a credible outsourcing company gives you access to a wide variety of skilled people for many roles. More importantly, you can work with those talented resources without the overhead and hassle of having to hire, manage, and retain them. That responsibility lies with the third-party employer.
For example, you might have a critical monthly job that requires 80 hours of work a month. If you hire someone full-time for that role, you have to keep them busy for 160 hours. Under the old way, either you overpay that person, or you have them do work that’s outside their core skill set just to keep them busy.
With the fractional approach, the outsourcing company places an experienced person with your company to do that job and that job only. It frees you from paying more than you need for the work while still getting an expert to complete it.
Such advantages come into even starker relief when you realize that it can be challenging to find the right person for the job in the oil and gas industry. Specialties like Accounting are not only technical, but very nuanced because the details can vary by region, service, and product type. That makes locating a person with that wide breadth of knowledge challenging.
However, when you implement fractionalized services into your hiring practices, you trust the outsourcing company to locate and manage the people you need based on your situational needs.
The principal downside is that leadership must adjust their internal expectations of the person working for you. Unfortunately, many companies ignore it entirely. While that expert is committed to your company while they work on your behalf, they are not truly your employee.
Thus, contracting with a fractional hire – no matter their skill level and expertise – requires planning, patience, and communication to prepare your workflows for their arrival. It’s especially relevant if you neglect long-term preparation and your outsourcing service can’t locate a person to solve a last-minute problem.
Let’s dive into this common scenario regarding Land Administration, Deck Maintenance, and Owner Relations.
Your company might only require a few edits to your decks in a given month, but you also need a qualified resource who knows how to analyze and make those appropriate updates. With the old model, you paid someone full-time wages for that single task. It’s far more expensive than the actual hours put into the work, but you paid that salary with the confidence that they’ll make those changes properly. Thanks to fractionalized services, you pay exactly for what you need – and nothing more.
That scenario also translates across the complicated revenue scenarios in the oil and gas industry. Such situations have different regions, basins, and land agreements, and it’s nearly impossible for one person to know everything. Fractional outsourcing provides a team of experienced people that your company can turn to for any given scenario.
It’s hard to deny the potential cost savings and value of highly skilled people. The experts at a third-party company can come to a better resolution with more confidence because of their comprehensive body of knowledge. Your trusted outsourcing company can access the right person for the job because their model allows them to spread the costs around their entire team.
Yes, but the idea of “success” in this situation will be subjective rather than objective measurement. However, you should start analyzing the return on your investment in these services by asking these questions:
Ultimately, your organization will have different values for those measures than others, so you must evaluate what you’ve gained versus what you’ve spent.
The most significant benefit is the scalability of the work you can complete as you grow. Specifically, you won’t have to scramble anymore when your organization makes a large acquisition.
Let’s say you ask your current outsourcing partner this question:
“If you now manage 100 wells, what happens if I acquire 500 wells?”
With fractional services, that becomes their problem to locate the necessary resources to help you expand. Their job isn’t to help you necessarily grow. They should help you mitigate staffing changes as you grow by simply being there as a trusted partner. They will make it less complicated for you to adapt to any changes you experience because of growth. Thus, the stress of growth doesn’t become a barrier to actual growth.
Your oil and gas company should employ the best possible people for high-profile tasks. However, that work might not always require a full-time employee, even if that person is highly skilled. With fractionalized business services, you truly get the best of both worlds, complete with lowering your operating expenses.
Connect with EAG Inc. to learn more about how to save on overhead costs that scale as your business grows.