“A director costs too much”: the comparison Belgian SMEs get wrong

Recruit a director on a permanent contract or bring in a fractional profile? The question looks arithmetical. It isn't, because most leaders compare a gross salary with a service invoice: two figures that don't measure the same thing. The real grid has four columns: total cost, lead time, risk, reversibility. And while the debate drags on, the Belgian market has already decided: interim management jumped 30 % in a year.

It's a classic scene in SMEs of 30 to 150 people. The sales function, or logistics, or finance, has outgrown what the existing team can carry. The reflex: open a director search. The budget announced in committee: 80,000 euros gross. Someone then raises the alternative of an external profile working on a fractional basis, and the answer comes back, final: “At that rate, we may as well hire.” That is exactly where the calculation goes off the rails. Because in a country where an hour of labour costs 48.20 euros on average according to Eurostat, the third most expensive in Europe, no leadership decision should rest on a figure that doesn't exist: gross salary has never been a cost.

What a senior permanent hire really costs

A director-level profile is recruited at between 70,000 and 110,000 euros gross a year in Belgium, depending on the function and the region. But the employer cost tells another story: social security contributions, the extra-legal benefits that have become standard in this segment (company car, group insurance, meal vouchers, bonus), and the cost of the recruitment itself, billed at 15 to 25 % of the annual gross by specialist search firms. In total, a permanent contract at 80,000 euros gross works out at roughly 10,000 to 12,000 euros a month, before producing anything at all. That figure is neither a scandal nor an argument against hiring: it is simply the real basis for comparison, the one that has to sit next to the alternatives.

The figure that tips the calculation: failure

Two variables then escape every spreadsheet. First, the lead time: according to data from the firm Robert Half, 59 % of recruitments take between three and five months, to which the successful candidate's notice period must be added. During that time, the problem that justified the hire keeps costing money, every month. Then the risk, and it is documented: the HR Voice study puts the cost of a failed hire at between 45,000 and 100,000 euros for a manager, and at more than 150,000 euros for a director-level post, adding up direct costs (advertising, search firm, salaries) and indirect ones (lost productivity, team demotivation, client impact). The US Department of Labor, often cited as a reference, allows up to 50 % of the first year's salary for a manager. For a director-level post, hiring is therefore a six-figure bet, one that many SMEs place without a safety net.

Meanwhile, the market has already decided

The most revealing evidence, though, is not in the cost columns but in the behaviour of companies themselves. According to Federgon, the federation of HR service providers, the Belgian interim management sector reached 165.3 million euros in revenue in 2022, up more than 30 % in a year, with around 1,100 assignments running at any one time on average. And satisfaction follows: a survey run by Federgon with the Hogeschool-Universiteit Brussel reports that 85 % of the companies polled describe a positive experience, 89 % rate the value for money as good, and 93 % would use the formula again. Belgium is even the only European country with a representative body for the sector. In other words: while the “permanent hire or external” debate drags on in management committees, a growing share of the market has already factored in the spreadsheet's third column, the one for risk.

The cost nobody counts: the leader's time

A director-level recruitment also means dozens of hours of the leader's time: writing the profile, sifting applications, running interviews, negotiating, onboarding. Then six months of ramping up, during which the function is still not being steered. And there is a more awkward blind spot: would you know how to assess that profile in an interview? Many leaders recruit a director precisely because the skill is missing in-house. They are therefore the worst placed to tell, across the table, the good candidate from the good salesperson of themselves. The fractional format reverses the sequence: the function is taken in hand immediately by someone who has already done the job, the structure gets built, and any later recruitment is prepared in good conditions, without urgency and without a gamble.

Four questions to settle it

One: does the workload justify a lasting full-time post, or a 6-to-18-month structuring peak? Two: is the function defined enough to write an honest job description, with measurable objectives? Three: would the company know how to assess and onboard that profile, or is it hiring blind? Four: what happens in practice if it goes wrong, and who absorbs the cost? If the answers lean towards uncertainty, fractional is the rational route: it structures first, then de-risks the recruitment. If all four answers are solid, the permanent hire is probably the right choice, and all the more so if the function has been structured before the new arrival.

The right question isn't “how much”, but “where is the function”