What each one actually costs, and what each one actually gives you
Most comparisons of these two options skip the part you actually need, which is the money. So here it is first, with its sources, and then the parts the money doesn’t capture.
How much does a full-time HR manager cost?
Salary.com puts the national average base salary for a human resources manager at $147,200, across all industries and company sizes. The Bureau of Labor Statistics median for the same role is $149,280 — within about 1.4%, which is unusually good agreement between two independent sources.
Base salary is not what the role costs you.
| Cost | Per year |
|---|---|
| Base salary | $147,200 |
| Employer payroll taxes — FICA 7.65%, FUTA and SUTA ~1.5% | $13,469 |
| Benefits and insurance — health, dental, vision, retirement match, workers’ comp, disability, PTO | $36,800 |
| Fully loaded | $197,469 |
That’s before recruiting costs. Before the three to four months it typically takes to hire. And before you’ve found out whether the role was sized correctly — which, at 40 people, it frequently isn’t.
How much does fractional HR cost?
A TrueCollab retainer runs $2,000 to $6,500 a month depending on scope — $24,000 to $78,000 a year. Engagements needing a dedicated resource are scoped separately.
Against $197,469, that’s 60% to 88% less.
The arithmetic is above; check it. And check the salary figure against BLS, which is free and public.
What does the cost comparison leave out?
You are not buying a full-time person at a discount. You’re buying the hours the work actually needs.
A 30-person company has perhaps six to ten hours a week of genuinely high-stakes people work, plus administration that shouldn’t be occupying a finance lead’s afternoon. That’s an awkward quantity — too much to absorb, not enough to hire for. Fractional exists because that gap exists.
So the honest framing isn’t “the same thing, cheaper.” It’s a different purchase, and for most companies under 150 people it’s the correct one. Any firm presenting it purely as a saving is inviting you to make the comparison wrong.
What does full-time HR give you that fractional doesn’t?
Worth being straight about, since we sell one of these.
Presence. Someone in the building, in the hallway conversations, who hears things before they become formal. That has real value and no retainer replicates it.
Availability without thought. No question about whether something warrants a call.
Ownership of culture over years. Fractional partners work with your culture. A long-tenured internal leader shapes it.
Capacity that scales with you. Past a certain size the volume of day-to-day HR work genuinely requires a full-time person, and no amount of efficiency changes that.
What does fractional HR give you that full-time doesn’t?
Seniority you couldn’t otherwise afford. At $197,000 you hire one person at one level. A fractional arrangement puts a more senior practitioner on the problems that need one.
Speed. Days rather than months. No recruiting cycle, no ramp.
Breadth. Someone who has seen the same problem across many companies rather than one.
Reversibility. Thirty days’ notice against a hire that takes three months to make and considerably longer to unmake if it’s wrong.
What changes at 25, 50, 100 and 150 employees?
Headcount isn’t the only signal, but it’s the one that moves your legal obligations, and it’s a fair proxy for workload. The thresholds below are federal law unless a state or city is named. The descriptions of the workload, and which model fits, are our own judgement from working with companies at each size.
At 25 employees
The federal anti-discrimination laws are already in force: Title VII, the ADA and the Pregnant Workers Fairness Act from 15 employees, and age discrimination protections and COBRA continuation coverage from 20. What changes around 25 is the work itself. There is usually a first layer of managers by now, the first performance problem, and the first termination somebody dreads.
Pay transparency can start here too, depending on where you hire. According to Brightmine’s 2026 state chart, Massachusetts requires a pay range in job postings once you have 25 or more employees in the state, and New York’s threshold is four.
What fits: fractional. The work is real, it arrives without warning, and it is nowhere near forty hours a week.
At 50 employees
The biggest single step. FMLA applies once you have 50 or more employees for 20 or more workweeks in the current or preceding calendar year, and the ACA employer mandate at 50 full-time employees, counting full-time equivalents. FMLA isn’t a policy you write once. It is an administrative process with deadlines, starting with a designation notice within five business days of knowing that leave qualifies. In Philadelphia, the commuter benefit ordinance arrives at the same headcount.
Pay usually needs structure by this point as well. In our experience, pay set deal by deal stops holding together somewhere between 30 and 50 people.
What fits: still fractional for most companies, with leave administration and manager support taking most of the hours.
At 100 employees
EEO-1 reporting begins for private employers with 100 or more employees, and the WARN Act’s advance-notice rules for mass layoffs and plant closings apply at 100, not counting part-time employees. Companies on a PEO often find the economics stop working somewhere past a hundred employees, though that depends on claims experience and census rather than on a rule of thumb.
The shape of the HR work changes too. Past roughly 85 people, the more common need is no longer an absence of HR, but a capable internal person handling the administration well with nobody senior to ask when something hard lands.
What fits: usually both. An internal HR generalist for the day-to-day, with a fractional partner for the judgement calls.
At 150 employees
Above about 150 people, most companies are approaching a genuine full-time need. The day-to-day volume needs someone present, and in operationally complex businesses that point can come earlier.
What fits: a full-time HR leader. Fractional’s job at this stage is the handover: defining the role, sitting in on interviews, and passing on a function that already works. The signs are below.
Signs you’ve outgrown doing it yourself
- You’ve crossed 15 employees — Title VII, the ADA and the Pregnant Workers Fairness Act now apply
- You’ve hired someone in another state, and nobody has checked what that triggered
- A manager has asked you how to handle something and you weren’t sure
- You’re approaching 50 employees, where FMLA applies and the ACA employer mandate arrives (it counts full-time-equivalent employees too)
- Someone has raised a complaint and you had to look up what to do
- Your handbook predates your current headcount
Signs you’ve outgrown fractional
Nobody in this business writes this section, which is exactly why it’s worth writing.
- The day-to-day volume genuinely needs someone present full-time — usually somewhere past 150 people, sometimes earlier in operationally complex businesses
- You need HR in the room for decisions made daily rather than weekly
- You’re building an HR team, and it needs a leader who is yours
When that happens, the right move is to hire. We’ve taken a client from 0 to 200 employees across multiple states and then helped them hire the HR Director who replaced us — defining the role, sitting in on interviews, and handing over a function that already worked rather than a blank page.
We counted that as a win. A firm that can’t tell you when to stop using it is selling you something other than advice.
Can you move from full-time HR to fractional?
It’s also common to move the other way: a company with an HR person who leaves, or a team that needs senior depth the budget can’t justify full-time. Past roughly 85 people that’s the more frequent shape — not an absence of HR, but a capable person handling the administration well with nobody to ask when something hard lands.
Common questions
How much does fractional HR cost compared to a full-time HR manager?
$24,000 to $78,000 a year against roughly $197,000 fully loaded — 60% to 88% less. But you’re buying fewer hours, not the same role cheaper, and the comparison is only fair if you hold that in mind.
Is fractional HR only for startups?
No. It suits any company where the HR workload is real but not forty hours a week. That includes 120-person manufacturers and restaurant groups as readily as software startups — arguably more so, because hourly workforces generate more compliance exposure per employee.
Can we switch to full-time later?
Yes, and a good fractional partner helps you do it. If yours resists that conversation, that tells you something.
What does a fractional partner handle day to day?
Onboarding and offboarding, the employee questions, the manager who needs a script before a difficult conversation, policy maintenance, and coordination with your payroll provider and broker. See embedded fractional HR for the full scope.
Does the retainer cover specialist work like leave and compensation?
Yes. Specialist work sits inside the same retainer as the day-to-day, including leave management, performance and compensation and manager training.
Sources: Salary.com national average for Human Resources Manager; US Bureau of Labor Statistics, Occupational Employment and Wage Statistics; BLS Employer Costs for Employee Compensation. Federal headcount thresholds per Title VII, the ADA, the PWFA, FMLA and the ACA employer mandate.