What is a Fractional CTO and How Do You Become One?

Igor K
April 20, 2023

A Fractional CTO is a chief technology officer who provides on-demand services to a company or organization. In other words, it is a freelance contract that implies working for a fraction of the time and cost and just on the part of the project as opposed to full- or part-time CTO positions.

This role can be performed remotely or on-site, depending on the company’s needs. Lately, however, a growing number of professionals are seeking remote positions exclusively because they enable greater flexibility that radically improves the work-life balance.

What is the typical role and job description of a Fractional CTO?

In short, FCTOs are responsible for overseeing the organization’s tech strategy, direction, and operations. They help companies with tech-related tasks such as:

  • Developing and implementing strategies
  • Managing IT operations
  • Overseeing product development
  • Managing vendor relationships
  • Evaluating and implementing new technologies
  • Providing leadership and mentorship
Fractional CTO in a board meeting

As an FCTO, you are bringing your expertise and experience to help companies:

  1. Align their technological initiatives with their business goals and objectives
  2. Optimize investments
  3. Drive innovation

Common assignments of a Fractional CTO in day-to-day operations

6 job duties commonly expected of a fractional CTO

In our talks with tech leaders from all over the world these past few years, we have discovered that there are a few universal expectations from an FCTO:

  1. Creating development processes (i.e., CI/CD implementation, testing, etc.)
  2. Making strategic decisions
  3. Developing and supervising hiring, onboarding, and offboarding processes
  4. Building in-house teams during the company’s transition from the outsourcing model (common for startups)
  5. Discovering reliable and recurring revenue streams by determining product-market fit
  6. Enabling scaling of operations relevant to products and features development

The two main external drivers of high demand for Fractional CTOs

Cost-effectiveness

Experienced chief technology officers may present a heavy burden on the, usually, limited startup budget. Additionally, the company may not have the need yet for a full-time CTO role.

Burden of employees salaries on companies
Image by jcomp on Freepik

In these circumstances, hiring someone to work only 15-20 hours a week can be a win-win situation for both parties. On the one hand, you can charge more per hour than possible in a permanent contract. On the other, the total cost for the company is less than it would be for a traditional position.

Remote and hybrid working trend

The paradigm has changed. Work is not necessarily where we go anymore but what we do. That’s one of the reasons why remote/hybrid working is quickly becoming the model of choice for not only a growing number of companies of all sizes but also seasoned professionals.

Remote working trends in the UK from 1980 to 2022
Chart by StandOutCV

In such a scenario, organizations are removing geographical barriers and hiring talent from around the world at competitive prices. This, in turn, is allowing them to slice large projects into chunks and hire multiple fractional tech leaders to develop, oversee and manage individual road maps.

Top reasons why companies are looking for fractional CTO services

To put it bluntly, fractional CTOs are a) cost-effective, and b) represent immediate solutions for companies that require high-level tech management without the commitment and cost of an in-house employee.

2 main reasons why companies are hiring fractional CTOs

This, basically, means that FCTOs are primarily engaged by SMBs that do not have the resources or need for a more permanent role but still require strategic technology leadership and guidance. Lately, however, we have also seen large companies offering this specific position.

Reasons companies opt-in for fractional CTOs

  • The company is operating with a low budget and can’t afford to pay, for instance, a $250K/year salary
  • Time is of the essence and they can’t afford to bother with the lengthy process of onboarding a full-time CTO; therefore, they are looking for someone who can start immediately
  • They are looking to hire more than one tech leader for any number of reasons; most commonly due to the sudden expansion after a successful funding round
  • They have the vision of a product but lack the practical knowledge to build such a technology. In such a scenario, you work closely with other C-suite executives to bring the product and tech strategy to life
  • They have serious issues with the technology team either due to the unplanned departure of the previous leader or the team’s inefficiency caused, for example, by quiet quitting
  • They are changing the outsourcing model in favor of an in-house team of engineers
  • They need technical leadership to aid with raising funds from VCs in which case, an FCTO is hired to review the architecture, development processes, disaster recovery, compliance policies, certifications, and other relevant parts of the operations and, ultimately, to ensure business continuity

The difference between an Interim CTO and a Fractional CTO

An ICTO is a temporary or transitional tech leader. For example, one can be appointed when the current tech leader is on leave or when a role suddenly becomes vacant. Another instance would be a crisis or significant change.

ICTOs are typically engaged for a defined period of time. They are responsible for managing the following:

  • The technology strategy
  • Operations
  • Team

The significant difference between the two is that an ICTO controls the helm while a fractional CTO is responsible for just one segment of navigation.

Additionally, an FCTO may operate on an ongoing basis while an ICTO is hired for a specific and relatively short period.

The average Fractional CTO rates and salary

According to the recent report by Reed, a headhunting agency that tracks salaries across industries in the UK, in 2023, a London-based tech leader working in a company with less than 1,000 employees, should earn £96,080 plus a 12% bonus in the private sector or £75,950 and 27,90% pension addition in the public sector.

Across the Atlantic, however, it is a bit of a different story. For instance, a head of tech working in a US-based company of the same size should average $170,000 in 2023 or $74.00/hour.

img-6
Chart by ITJobsWatchUK

The rates depend on experience, education, certification, and other relevant factors such as the company’s location and size; although, the last two are not necessarily the rule. A good example is the Idaho-based (US) software development company Corporate Tools, which pays tech leaders $172/hour.

PROs and CONs of the fractional tech leadership

As with every other contract type, there are advantages but also downsides to working as a fractional CTO.

Pros and Cons of working as a fractional CTO

Pros

  1. Flexibility in terms of location and time
  2. Working in different industries and sectors; thus, developing professionally at the much faster pace
  3. Compensation can be much higher than in full-year positions

Cons

  1. It’s hard to track the successes and end results of your work
  2. Feeling disconnected from the company’s culture (i.e., a lone wolf syndrome)
  3. The pains of bringing order into chaos which is a common scenario in startups

Where to find job opportunities

For those without a network, the quickest way to find fractional CTO jobs is through job boards like:

LinkedIn job board with available CTO jobs
LinkedIn job board with available CTO jobs

It is also wise to join the CTO groups like ours here at the Academy and attend specialized events where you can participate in discussions and establish long-lasting relationships with your peers. In our experience, there is no better way to get a timely tip for a new job opening.

How to get hired

Having an industry-recognized certification makes this part a whole lot easier; all you have to do is send a cover letter to compete on a tender.

Remember, you are not alone and the only way to get that interview is to send an attention-grabbing cover letter.

How to write a winning cover letter

The first rule of cover letters is that it is not about you per se, but about the job and the company you are applying to. In other words, you want to explain in less than 250 words how your experience and expertise solve their problems. That’s the only thing they want to hear.

You should clearly demonstrate:

  1. Complete understanding of the employer’s needs and project’s specific requests
  2. Necessary experience and expertise to ultimately deliver what’s expected of you

Here are a few additional cover letter tips:

  • Mention your most recent experience with similar projects early on (i.e., in the opening paragraph because that’s what most platforms show to employers in snippets)
  • Showcase the accomplishments of that particular job next (i.e., how did your engagement there help that employer achieve desired goals)
  • Point to certain risks that only an experienced tech leader would be aware of to prove your expertise
  • Refrain from bragging and self-glorification and focus on the job’s requirements
  • Briefly cite your experience in the very last paragraph

Conclusion

If you are favoring the flexibility of remote working; then offering your experience and expertise as a fractional CTO should be your top priority. The trends are showing that demand for this particular contract type is steady. And, with such a high number of emerging tech startups, it shouldn’t be too hard to land your next job.

Finally, if having a CTO peer advisory group could be helpful in any way, book a free discovery call with our senior leadership to gain access to other tech leaders and their perspectives, and new job opportunities.

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