As a founder of a growth-seeking company, one of your most crucial decisions is how to structure your marketing department. Do you hire a full-time head of marketing to lead growth in-house? Or do you use a fractional marketing team to keep costs lean and your strategy agile? 

Let’s look at the real costs, benefits, and risks of each approach to help inform your decision.

The True Costs of Hiring a Head of Marketing

The process of hiring a Head of Marketing includes a cycle of financial and administrative costs, from recruitment and advertising to onboarding, and every step in between. 

The salary itself commands a premium. A package of $150,000 or more annually is common, with additional performance incentives. Depending on your region, you’ll also need to supply a range of benefits including health insurance, retirement contributions, vacation time and more. 

Other costs include payroll taxes, administrative overhead for HR management, and work-related perks. In regulated industries, compliance requirements can drive costs up further.

Between admin and regulations, plan on 15-30% extra on top of base compensation.

Once you make the hire, onboarding brings further expenses of your team’s time—one of your most valuable assets. 

“The total, hard and soft, costs to hire a head of marketing can be three to four times the expected salary.”

THE SOCIETY FOR HUMAN RESOURCES MANAGEMENT

You can also expect ongoing investments. Your new hire will expect some type of support, either from additional employees or external agencies. They will also need continuous training and development to keep their skills relevant. This includes conferences, courses, certifications and more. You should factor in the gaps in productivity while they attend these sessions.

The biggest risk? A mishire who can cause a major set back on your growth goals by damaging productivity, team morale, client relationships... 

A culture misfit will negatively impact team dynamics, eventually requiring expensive severance and again replacement recruiting with more onboarding. 

Even with a successful hire, turnover is common for marketing heads. The average tenure is nine months. This compounds costs due to lost productivity between hires. Each transition incurs the repeated expenses for hiring, onboarding and ramp up time before the replacement is fully productive.

The Benefits of Fractional Marketing Teams

Fractional marketing teams offer advantages traditional hiring can’t match. Let’s explore why they may be a better alternative.

Flexibility tops the list. You can scale fractional teams up or down based on your evolving needs. This allows alignment of marketing resources with the company’s situation and objectives. You only pay for what you need—when you need it.

For example, rapidly scaling startups can increase marketing bandwidth when setting go to market foundations or for specific product launches, then dial it back during slower times. This agility would be difficult to achieve with full-time hires.

Next, you gain access to diverse expertise. Fractional teams consist of channel-specific experts in key marketing functions across digital marketing: organic and performance, branding, PR, content development, and more. This diversity of skill sets and perspectives simply isn’t possible with a single hire.

A well-structured fractional team will deliver niche experience you lack in-house, while bringing out the best in the talent you do have. They continuously stay on top of the latest marketing strategies, technologies, and trends. Your company will also benefit from the learnings they gather across their base of clients. This variety of expertise brings innovation you won’t receive from an individual contributor.

Cost savings are another major advantage. By only paying for the services you need, you avoid full-time salaries, benefits, and other costs associated with traditional hiring. 

 "Fractional marketing is the future of marketing. It allows businesses to access the expertise of experienced marketing professionals without having to commit to a full-time hire. This is a great option for businesses of all sizes, but it is especially beneficial for small businesses and startups that may not have the resources to hire a full-time marketing team."

- David Meerman Scott, author of The New Rules of Marketing and PR

Overall, fractional teams deliver an improved return on your marketing spend. Their scalability allows an alignment of resources by matching marketing power to sales cycles, campaigns, product launches and your company’s specific stage of growth.

Pros and Cons of Each Approach

Hiring a marketing leader does offer some benefits. You gain an inhouse leader and internal continuity. But stagnation, knowledge gaps and culture misfit risks remain.

Fractional teams provide agility, expertise and cost efficiency since it takes time for a full time employee to learn the business..

Here’s a comparison of the pros and cons:

Head of Marketing Pros:

• Stable leadership

• Centralized decisions

• Continuous focus

Cons:

• Expensive

• Administrative burdens

• Potential stagnation

• Knowledge gaps

• Culture misfit risks

Fractional Team Pros:

• Cost savings

• Variable cost model

• Flexibility

• Scalability

• Expertise

• Improved ROI

Cons:

• No single dedicated leader

• Team size metrics may affect your brand

• Investors may require you have an internal marketing lead

Evaluating the Right Fit

So which model is best for your business? Here are key factors to consider:

• Current growth stage and needs – is leadership stability or agility more important right now?

• Available budget – can you afford a premium salary and ongoing costs of a marketing head?

• Marketing goals and growth strategies – are fractional teams equipped to support them?

• Culture and leadership dynamics – will a new head integrate well or disrupt productivity?

Analyze your specific situation, resources and objectives. For startups and small companies, fractional teams often provide better flexibility and ROI. But if you need stability and internal leadership, a dedicated head may be worth the investment.

By carefully weighing these key factors, you can determine the best marketing model to meet your needs and fuel your future growth.