Fractional, Freelancer, Consultant - Which is it?
Not too long ago, a consultant was generally regarded as someone who worked for a big management firm, or a senior-level exec with 30 years of experience and a bunch of big logos behind him.
But that has changed. Today, there are different types of consultants and contractors – for mid-level experience and up. Plus, the permutations are expected to increase as the “gig economy” (labor market for short-term contracts) expands.
Just consider, there were 73.3 million “freelancers” in the United States in 2023, and the number is expected to climb to 90.1 million by 2028. In fact, Google has 54% more freelancers/contractors than permanent employees, according to Market.us Scoop.
So, here’s a quick guide to the different types of independent workers that are putting out their shingle these days and working independently.
Freelancers
A freelancer usually has a particular execution skillset, for example, knowledge of search engine optimization, graphic design skills, or software development. Often companies hire freelancers for a specific set of tasks to execute in a pre-defined period.
Most freelance work is mid-level and is project-based. Companies sometimes hire freelancers because they don’t have the headcount for full-time employees.
Compensation is often hourly or by project. Retainers are common. Many freelancers are paid monthly.
Common types of free-lance jobs for the last 10 years include:
- Web developers
- Graphic Designers
- Online teaching/training
- Translators
- Virtual assistants
- Recruiters
Contractors
Like freelancers, contractors often have a specific set of skills and primarily focus on execution. However, they often work for one client at a time, whereas freelancers may work for multiple.
Contractors may also have longer work contracts than freelancers. They can also be on site.
Common types of contractors are:
- Software developers
- UI
- Marketing
- Event planning
Consultant
A consultant usually brings specific expertise to the table, for example organizational design or management consulting. Consultants usually do not execute, but instead, offer guidance. They tend to be senior-level and up.
The client often gives the consultant a problem to solve, not a set of tasks. Engagement lengths vary, but consultants are typically brought in to solve a business problem or achieve a goal and can stay on retainer afterward.
Compensation varies but is often hourly or daily. Retainers are common.
Typical consultants include:
- Management consultants
- Financial consultants
- HR consultants
Fractional Consultant
Fractional roles are a hybrid of consulting and freelancing. Fractional consultants often have the specific expertise and seniority of a consultant but are also responsible for the execution (like a freelancer).
Fractional consultants may work for multiple employers at the same time, sometimes one day a week. They tend to work on long-term projects and may have direct reports. In many instances, it’s hard to tell between a fractional consultant and a full-time employee.
There’s a growing trend to hire fractional consultants as a try-before-you-buy approach. Chili Piper, the scheduling tool, started hiring fractional employees this year, because as the co-CEO put it, “you get to see if it’s the right fit before you make it official.”
Start-ups also find fractional consultants attractive because they provide all the expertise but at a lower cost. They also can substitute for a full-time employee who is on maternity or short-term leave.
Many fractional consultants bill every two weeks, like an employee.
Common Fractional consultants:
- Fractional CFO
- Fractional CMO
- Fractional CRO
- Fractional Digital Marketer