by: Evan Metzger
Fractional executives have emerged in force over the last four years. Fractional COOs in 2020 were almost nonexistent; today, they are increasingly popular with Private Equity portfolio companies, startups, and small-to-medium size businesses.
The emergence of fractional leadership represents a fundamental shift in executive resource allocation, particularly in high-growth sectors where operational expertise intersects with capital efficiency. It’s not easy to do this—how can you attract top talent without breaking the bank? In recent years, fractional executives, including fractional COOs, have been an increasingly effective solution to this fundamental hiring dilemma. Let’s discuss what a fractional COO is, the market forces encouraging companies to turn to fractional COO services, and how can you hire a fractional COO for your company.
What is a Fractional COO?
Let’s start with the basics: what is a fractional COO? A fractional COO is a Chief Operating Officer that works part-time for one or more companies on an ongoing basis. This is different from an interim COO, who works full-time for a limited term (typically 2-6 months) for a single company.
A fractional COO is occasionally hired by a Private Equity firm to work in multiple portfolio companies. This can significantly reduce costs and streamline communication for. For example, a PE firm determines that companies A, B, and C all require a COO. However, three full-time COO hires may be financially prohibitive. Instead, the PE firm in this example chooses to hire a single fractional COO who splits their time between companies A, B, and C.
The Rise of Fractional COOs: Market Evolution and Strategic Positioning
A few years ago, fractional executives were a rare phenomenon; today, fractional COOs and other fractional executives are a popular solution for many companies. Let’s take a look at how this position has evolved from a nascent concept to a sophisticated executive solution, driven by several key market forces:
1. Market Dynamics:
As many studies have shown, executive pay has skyrocketed in recent years, particularly over the last two decades. The median salary for a COO in 2025 is $504,475. As the name implies, fractional COOs only charge a portion of the full-time salary.
Moreover, top COO talent is increasingly hard to land. On the heels of the “Great Resignation, companies have found themselves in heated competition with each other for exceptional talent. Fractional COO services loosen up the candidate pool by allowing top candidates to efficiently split their time between more than one candidate.
Finally, as Private Equity continues to grow and invest in portfolio companies, the focus on a 4-6 period hold will continue to drive interest in optimizing performance and increasing working capital.
2. Structural Market Advantages
Hiring a fractional COO offers companies a number of structural market advantages. First, they offer more strategic flexibility in allocating resources. This is particularly true if a Private Equity firm hires a single fractional COO for multiple portfolio companies.
Second, fractional COOs often have more flexible engagement models than full-time COOs, thereby reducing operational risks. For example, a fractional COO can commit to a certain number of hours per week or even be deployed on an on-demand basis.
Why Hire a Fractional COO
Let’s take a closer look at why companies are turning to fractional COO talent. There are two main reasons: cost and value.
Cost
As noted above, the cost of a fractional COO can be considerably less than hiring a full-time COO. Hourly rates often range from $200 to $500, while monthly engagements often cost $4,000 to $8,000 dollars, depending on the number of hours or days each month.
While this might seem steep, it is a sliver of the cost of a traditional COO which can easily exceed over $25,000 a month. This is a significant advantage for growing companies. At a portion of the cost, these smaller businesses can access top talent that would otherwise be too well beyond their budget.
Finally, fractional COOs come with a reduced obligation for employer-provided benefits as they are part-time employees. Moreover, top executive search firms like ECA provide onboarding services that reduce spend on HR and organizational overhead.
ROI: The Value of a Fractional COO
Costs are only one side of the coin. You should also consider the value that a fractional COO can add to your company. There are three main things to consider here:
1. Higher Value: Because fractional COOs are experienced with years of operational leadership under their belts, the value they add is often much higher—at least in the short-term—than a new full-time COO who is greener around the ears.
2. Larger Talent Pool: Turning to fractional COOs opens up a larger talent pool. This means that you can hire someone whose experience better matches the challenges your company faces. This translates into a reduced learning curve and a head-start on implementing those strategic initiatives you hired the COO to address.
3. Efficiency: Fractional COOs help companies maximize their return on every dollar spent during periods of expansion by implementing strategic cost controls and optimizing resource allocation. Their expertise in scaling operations allows companies to grow more efficiently, avoiding common pitfalls that often lead to wasted capital, while their flexible engagement model itself represents a more capital-efficient approach to accessing executive leadership.
When do you need a fractional COO?
Let’s take a look at three common scenarios when companies choose to enlist the services of a fractional COO: (1) Early-stage growth, (2) rapid growth, and (3) periods of transformation.
1. Early-Stage Growth Scenario: A fractional COO becomes necessary when early-stage or mid-market companies need sophisticated operational leadership but can’t justify or afford a full-time executive. This scenario often emerges when companies hit revenue between $2-10M and require professional operations oversight to establish foundational systems and processes, but lack the scale for a full-time hire. The fractional model allows these growing organizations to access experienced operational leadership for 1-3 days per week, providing strategic guidance while managing costs.
2. Rapid-Growth Scenario: High-growth phases particularly benefit from a fractional COO when companies need to rapidly professionalize their operations without overextending their budget. During these periods, a fractional leader can architect scalable systems, implement project management frameworks, and develop standard operating procedures that enable sustainable growth. This arrangement works especially well for companies experiencing growing pains but not yet ready for the financial commitment of a full-time COO.
3. Transformation Scenario: Transformation periods also signal the need for a fractional COO when companies are undertaking specific initiatives like ERP implementations, operational restructuring, or preparing for a capital raise. In these scenarios, the fractional leader brings specialized expertise and dedicated focus to guide critical projects through completion, then steps back once the transformation is complete. This flexible approach allows companies to access high-level operational expertise precisely when needed without a long-term commitment.
Core Qualifications of a Fractional COO
A strong fractional COO should possess a blend of operational expertise, strategic insight, and leadership agility. The key is to find someone with hands-on experience scaling businesses and managing rapid change, as they’ll need to make significant impact in limited time.
Core Functional Requirements:
- For PE-backed portfolio companies in the lower middle market or middle market, find a track record scaling operations of a similar size. For example, a manufacturer with $40M ARR would typically look for an experienced operator who has scaled businesses under $100M ARR.
- Deep expertise in either ERP/technology implementation, financial modeling/planning, or organizational design. This will depend on the ERP and financial planning support provided by the finance and operations teams currently at your organization. Some fractional COOs are highly experienced in this, so do not preemptively take it off your wish list!
- Experience developing and executing against KPIs and OKRs across multiple business functions
- Strong background change management methodologies
- Demonstrated ability to build and optimize business processes
- Relevant industry knowledge, especially in highly technical industries, like manufacturing or healthcare.
Essential Soft Skills:
- Outstanding communication abilities to influence without direct authority or motivate the team without exercising formal authority
- Quick pattern recognition to identify operational bottlenecks and solutions. This is extremely important for a COO as they maintain day-to-day operations.
- Adaptable leadership style that can flex between strategic and tactical work. Fractional COOs are the bridge between strategic and operations—they need to keep their eye on long-term goals to ensure the efforts of the team in the short-term contribute to those objectives.
- Proven ability to build trust and credibility rapidly with new teams. This will be particularly important if the fractional COO will split their time between multiple PortCos, in which scenario the ability to quickly pivot between teams while maintaining a strong rapport will be highly desirable.
- Experience with the particular team structure, workflow and culture of the organization. If it’s a remote organization, be sure the COO has experience working with remote or hybrid employees.
Critical Experience for a Fractional COO:
When searching for a fractional COO, make sure they have salient experience. The following are high indicators of future success as a fractional COO:
- Track record of quantifiable business impact. Did they implement a new culture of accountability? Ask about which metrics and KPIs they used to measure this. Did they reduce scrap at their previous plant or increase EBIDTA? Ask them how they did it and by how much.
- Experience in multiple industries/business models to enable a quick ramp-up. This is especially important because a fractional COO only spends part of their time at your company. They need to be as plug-and-play as possible to avoid a long ramp-up time.
- Understanding of capital efficiency and ROI-driven decision making. For Private Equity-backed companies or other results-oriented enterprises, this is a must.
- History of successful knowledge transfer to internal teams. This is especially important if you expect an exit in the near future. COOs are key players in successful transitions as every process runs through them. Make sure they have experience setting up their team for success to avoid confusion in the case of their absence, whether planned or unplanned.
How to Hire a Fractional COO
At ECA (one of the fastest executive search firms in the U.S.), we’ve perfected a method for hiring top fractional executives effectively and efficiently. This methodology is based on the principles developed by our found, Atta Tarki, and explained in his book, Evidence-Based Recruiting: How to Build a Company of Star Performers Through Systematic and Repeatable Hiring Practices.
1. Define clear objectives and scope of work.
Outline specific operational challenges you need help with, such as process optimization, team restructuring, or scaling operations. Also set the desired time commitment and engagement model. Clarity on the weekly or monthly hours needed will help you eliminate candidates who cannot meet your scheduling requirements. Put this information in a detailed job description.
2. Source candidates through networks, platforms, or a search firm.
Leverage platforms specializing in fractional executives, professional networks, or specialized executive search firms. Focus on candidates with experience in your industry and company stage. You can find fractional COO services on freelance websites like Fiverr or Upwork. For a more tailored experience, consider using a top executive search firm.
3. Conduct thorough interviews focusing on relevant experience. Pay special attention to candidates’ track records in implementing operational improvements and managing cross-functional teams. Structure your interviews to assess their ability to identify inefficiencies, develop solutions, and drive execution. Keep the interview process efficient to maintain candidate engagement. We recommend limiting the number of interviews in order to improve the candidates’ experience with your company. Panel interviews are a great way to ensure that the candidate speaks with all relevant stakeholders while reducing the number of distinct interviews.
4. Check references and past performance. Connect with CEOs and other executives who have worked with the candidate in previous fractional or full-time roles. Speak with team members they’ve managed to understand their leadership style, ability to drive change, and success in building high-performing teams.
5. Set clear expectations and success metrics. Define specific operational KPIs and milestones for the first 30, 60, and 90 days. These might include improving specific processes, reducing costs, increasing team productivity, or implementing new systems. Having concrete objectives will help you evaluate the fractional COO’s impact and ROI.
Onboarding Your New Fractional COO
Define the Scope and Objectives of the Role:
- Detailed Scope Definition: Create a comprehensive document outlining specific responsibilities, deliverables, and areas of authority. Include both regular operational duties and strategic initiatives the COO will oversee. This information can either be in the contract or in a supplemental letter to the employee.
- Performance Metrics: Establish KPIs tied to business objectives, such as operational efficiency improvements, team performance indicators, or process optimization targets. Include both leading and lagging indicators.
- Engagement Terms: Clearly define working arrangements, including time commitments, availability expectations, and response times for urgent matters. Specify which meetings and decision-making processes require the COO’s presence. Establishing this in the first week is important as your fractional COO will need to ensure their availability at all critical times.
- Exit and Modification Clauses: Include well-defined termination conditions, notice periods, and procedures for adjusting scope or time commitment as business needs evolve. Some fractional COOs are hired to achieve a specific outcome—such as a successful merger or acquisition. This information needs to be clearly conveyed at the beginning of the engagement.
Integration Protocols
- Communication Structure: A COO worth their salt will set up formal communication channels and reporting relationships. They should establish weekly check-in schedules, reporting formats, and escalation procedures for critical issues, but the Board, CEO or other stakeholder to whom the fractional COO reports should also establish these check-ins as necessary.
- Stakeholder Management: Create a stakeholder map identifying key relationships the COO needs to build and maintain. Include internal teams, external partners, and board members if applicable.
- Authority Matrix: Develop a clear decision-making framework specifying the COO’s autonomy levels across different operational areas. Document which decisions require CEO approval versus independent action.
- Access and Security: Establish appropriate system access levels, data sharing protocols, and confidentiality agreements to protect sensitive information while ensuring the COO can work effectively.
- Team Integration: Plan how to introduce and position the fractional COO to your team, including their role, authority, and how they fit into the existing organizational structure.
Knowledge Transfer Process
- Documentation Access: Organize and share relevant operational documentation, including current processes, team structures, and ongoing initiatives. Often, this can be done before the official start date so that the COO can hit the ground running on Day One.
- Key Relationships: Schedule introductory meetings with critical team members and stakeholders to facilitate relationship building and knowledge sharing. For important stakeholders, a one-on-one intro meeting is usually more effective than a group meeting.
- Historical Context: Brief the COO on past operational challenges, attempted solutions, and organizational culture nuances that might impact their effectiveness. You might consider enlisting a junior team member to prepare slides—there’s no reason to hold off on making this a formal, recurring report to keep the fractional COO up-to-date.
Conclusion: The Strategic Advantage of Fractional COOs
As we’ve seen, fractional COOs represents a significant evolution in how companies access executive talent. Whether your company is navigating early-stage growth, experiencing rapid expansion, or undergoing transformation, a fractional COO can provide the strategic and tactical expertise needed to drive success at only the portion of the cost of a traditional COO hire.
The key to maximizing the value of a fractional COO lies in careful preparation: clearly defining objectives, conducting thorough due diligence during hiring, and implementing robust onboarding processes. When executed properly, the fractional COO model can deliver exceptional operational leadership while maintaining capital efficiency—a critical advantage for Private Equity leaders.
Due to the increasing flexibility of work arrangements in the aftermath of the Covid-19 pandemic, the expertise offered by fractional COOs will likely become an increasingly attractive option for companies seeking to optimize their executive leadership strategy.
Interested in hiring a fractional COO for your organization? Connect with us here to learn about our fractional talent solutions.
