Most growing companies do not hire a CHRO as their first senior HR person. They hire an HR manager or generalist, then a head of people, and only later an executive with a CHRO title. A fractional CHRO fits into that sequence as the senior leader above a junior team, or before any HR staff exist.
The full-time math
A CHRO or VP of People at a $20M to $100M company typically earns $160,000 to $280,000 in base salary, with a bonus and sometimes equity. Payroll taxes and benefits add 20% to 25%. A recruiter adds 20% to 30% of first-year cash. Year one all-in runs roughly $200,000 to $380,000.
The more common first hire, an HR manager or generalist, costs about $70,000 to $110,000 in salary. That person handles day-to-day HR well but usually lacks the experience to design pay structures, lead a reorganization or handle a complex investigation.
The fractional math
Fractional CHROs typically cost $3,000 to $10,000 a month, about $36,000 to $120,000 a year. Most publish no rates. Three-month minimums are common.
Where full-time starts to make sense
Headcount and complexity set the threshold.
- 25 to 75 employees: fractional CHRO, with an office manager, payroll provider or PEO handling administration.
- 75 to 150 employees: fractional CHRO plus a full-time HR generalist. The generalist handles daily questions, onboarding and records; the fractional sets policy, pay and performance and handles the hard cases.
- 150 to 300 employees, or several countries: the switch usually happens here, often to a full-time head of people with a small team.
- Over 300 employees, or a company planning an IPO or serial acquisitions: a full-time CHRO with specialists in recruiting, compensation and employee relations.
A common rule of thumb is about one HR person per 100 employees in a growing company, though it varies by industry and by how much is outsourced.
What you lose with fractional
You lose a leader who is visible to employees every day. People bring problems to whoever is in the building, and a fractional CHRO at six days a month hears about issues later. You lose speed in urgent cases, such as a complaint that needs action the same afternoon, unless the contract includes on-call terms. You lose some influence over culture, which is built in daily interactions. And managers may lean on the fractional less than they would on a colleague down the hall.
What you gain
You gain senior expertise at a fraction of the cost, at exactly the stage when HR mistakes are most expensive relative to the company’s size. A misclassification claim or a badly handled termination can cost a 50-person company more than a year of fractional fees. You also gain someone who has built HR functions before and can hire and coach the generalist who will grow into the role.
The sequence that works
Fractional CHRO first, to audit compliance, build the core policies and pay structure and train managers. Add a full-time HR generalist around 75 employees, managed by the fractional. Hire a full-time head of people around 150 to 200 employees, with the fractional helping define the role and stepping back to an advisory arrangement.