HR Solutions for Growing Real Estate Firms: Fractional vs. In-House
As a real estate firm grows, one of the most critical elements to manage is human resources (HR). Whether you’re just expanding or you’re experiencing rapid growth, having the right HR strategy in place can make a significant difference in your ability to attract, retain, and manage talent.
However, as a growing business, you may be wondering whether it’s better to hire a full-time, in-house HR team or to bring in fractional HR services to handle your needs.
In this blog, we will explore both options—fractional HR and in-house HR—helping you determine which model is best suited for your growing real estate firm. Let’s dive into the pros and cons of each approach so that you can make an informed decision.
What Is Fractional HR?
Think of it like this: Fractional relationships are more like adding another team member (or a few team members!) to your organization on a part-time basis.
This considered, hiring a fractional HR team to partner with your in-house HR stakeholder or team involves a more strategic partnership. In a fractional relationship, the fractional team acts as a member of your organization, fulfilling the roles and responsibilities of traditional HR members but without being full-time company employees.
In short, fractional HR services are like hiring part-time employees to assist your existing team. It’s a partnership rather than a replacement. At Culture Works, we believe fractional human resources can help optimize:
- Your company’s human resources
- And its company culture
How Fractional HR Works
In fractional HR, a dedicated HR professional or a team works with your real estate firm for a set number of hours each week or month. This can range from a few hours per week for smaller needs to a more substantial number of hours for more complex requirements. A fractional HR consultant might assist with hiring, compliance, employee relations, benefits management, and more.
This model is ideal for smaller firms or growing businesses that want to access HR expertise but aren’t quite ready to invest in a full-time team.
Benefits of Fractional HR
So, why should you consider a fractional HR company? Here are three reasons why your business might consider partnering with a fractional HR company (like Culture Works!)
It Saves You Money
CEOs and other business leaders strive to make their company the best possible place to work. In order to do that, leaders need to invest in operationalizing their culture—plus there’s no business owner who wouldn’t like to cut costs where they can.
Hiring a fractional HR company is a cost-effective way to optimize your human resources. Hiring a fractional HR team can help reduce the cost of full-time employees while optimizing your existing team’s functionality.
In fact, did you know that the cost of hiring one full-time, in-house employee (with salary, benefits, etc.) can cost the same as receiving an entire fractional team?
It Provides Additional Expertise and Resources
A fractional HR team can help provide additional expertise and resources to your business.
When you hire a team of human resources experts, you receive a depth of expertise that is different from hiring just another in-house team member. With an entire fractional team, you open yourself up to a greater network of people who can help.
You also give yourself access to the resources that only HR professionals who have been in the industry for 10+ years have access to. Who wouldn’t want that level of expertise and resources?
Our team at Culture Works is comprised of HR experts with years of experience under their belt, including:
- HR Consultants and Generalists
- Culture Operations Partners
- L&D Specialists
- Culture and Branding Operation Specialists
- And more
Each and every member understands how to integrate company culture with HR operations in order to create a successful company. Read on to learn more about what we do at Culture Works.
Challenges of Fractional HR
Less Control and Oversight
Since fractional HR professionals are not fully embedded in your company, they may not have the same deep understanding of your business and culture as an in-house team would. This can sometimes result in slower response times or less personalized attention.
Limited Availability
Depending on your agreement, fractional HR professionals may not always be available when urgent HR issues arise. If you need immediate attention or need HR support around the clock, fractional HR might not be the best option.
What Is In-House HR?
In-house HR refers to hiring a full-time HR employee or team to manage all aspects of human resources within your firm. This model works best for larger real estate firms with complex HR needs or firms that require a more personalized and hands-on approach to managing their workforce.
How In-House HR Works
An in-house HR team is dedicated solely to your company’s HR functions. This team is responsible for handling recruitment, employee training, payroll, benefits, compliance, performance management, and more. In-house teams also manage employee relations, culture-building initiatives, and help ensure the company is compliant with labor laws and regulations.
In-house HR professionals become integral members of your organization, working alongside other departments to help achieve the firm’s business goals.
Benefits of In-House HR
Full-Time Focus and Dedication
An in-house HR team is dedicated entirely to your firm, which means they can dive deep into your culture, understand the unique needs of your business, and tailor HR strategies to align with your goals. With a full-time team in place, you’ll receive immediate attention and faster response times when issues arise.
Greater Control and Customization
With in-house HR, you have more control over how HR processes are executed. Whether it’s shaping company culture, improving employee retention, or creating a robust training program, an in-house team can work directly with you to customize HR strategies that fit your real estate firm’s needs.
Proactive Management
An in-house HR team is present day-to-day, allowing them to be more proactive about handling employee concerns, anticipating challenges, and taking preemptive steps to improve the workplace. They can work closely with managers and team members to address issues before they escalate.
Challenges of In-House HR
Higher Costs
Hiring an in-house HR team can be expensive, particularly for small to medium-sized real estate firms. Beyond the salary, you must also account for benefits, training, and other overhead costs. This can put significant financial pressure on growing firms with limited budgets.
Resource Limitations
As your firm grows, the HR team may struggle to keep up with the increasing workload. Hiring and managing an HR team also requires additional resources, such as HR software, compliance monitoring, and more, which can be costly.
Scalability Concerns
Unlike fractional HR, which allows you to scale services as needed, in-house HR teams may face challenges when it comes to scaling quickly in response to seasonal spikes or business growth. Expanding an in-house HR team requires time, effort, and additional financial investment.
Which Is Right for Your Growing Real Estate Firm?
Deciding whether to opt for fractional or in-house HR depends on the size of your real estate firm, your budget, and your HR needs. Here are a few factors to consider:
Fractional HR is ideal for smaller or growing real estate firms that don’t yet have the budget or need for a full-time team. It’s cost-effective, flexible, and allows you to tap into HR expertise without the overhead of hiring a full-time staff.
In-house HR works best for larger firms or businesses with more complex HR needs. It offers full-time attention, greater control over HR functions, and the ability to integrate HR strategies into your overall business operations.
If your firm is still in the early stages of growth, fractional HR is often the best option, as it gives you the expertise and support you need without the financial strain of hiring full-time employees. However, as your business expands and your HR needs become more intricate, moving toward an in-house team might be the right step.
Final Notes
The right HR solution for your growing real estate firm depends on several factors, including budget, size, and goals. Whether you choose fractional HR or in-house HR, the key is finding a model that aligns with your firm’s current and future needs. Each approach has its own set of benefits and challenges, but with the right strategy in place, your firm will be better equipped to navigate the complexities of human resources while continuing to grow and succeed.
Interested in learning more? Read on to learn more about when to hire a fractional HR team.
