Quick answer: Fractional HR gives a Philippine business senior HR capability on a part-time, monthly basis (payroll, statutory compliance, hiring, and HR strategy) for a fraction of the cost of a full-time HR hire. It's the right fit for SMEs that have outgrown owner-run HR but can't yet justify a full-time HR manager or director. Providers like People Helm run the whole function on a retainer, so you get an HR department's output without an HR department's headcount.
Key takeaways
- Fractional HR = a senior HR team you share, on a monthly retainer, instead of hiring one full-time.
- It covers the same scope a full-time HR manager would: payroll, SSS/PhilHealth/Pag-IBIG/BIR filings, DOLE compliance, recruitment, and employee documentation.
- A full-time HR manager in the Philippines runs roughly ₱40,000–₱90,000 a month before benefits. Fractional HR costs a fraction of that because you're sharing the capability, not owning the headcount.
- Best fit: businesses with roughly 15–150 staff, or anyone opening locations, that has HR pain but no HR person.
- Not for you if you already run a full HR department. At that point you need software, not a fractional team.
What is fractional HR?
Fractional HR is an arrangement where an external team runs your HR function part-time, on a recurring monthly fee, instead of you hiring a full-time HR employee. "Fractional" means you use a fraction of a senior HR team's time, and pay a fraction of the cost, while still getting the full scope of work handled.
It sits between two extremes most Philippine SMEs get stuck between:
- Owner-run HR: the founder or an office admin handles payroll and filings on the side. Cheap, until a DOLE letter or a payroll error costs real money.
- Full-time HR hire: a dedicated HR manager or director. Complete, but expensive and hard to justify below a certain headcount.
Fractional HR is the bridge: senior expertise, full coverage, part-time cost.
What does a fractional HR service actually do?
A good fractional HR provider runs the same scope a full-time HR manager would. Typically that includes:
- Payroll: computation, cut-offs, and disbursement support across every branch.
- Statutory compliance: SSS, PhilHealth, Pag-IBIG, and BIR contributions filed on time, every cycle.
- DOLE and labor-standards compliance: establishment registration, labor-standards adherence, and handling inspections.
- Recruitment: sourcing, screening, and closing roles, from front-line staff to senior hires.
- Employee documentation: contracts, probationary-to-regular tracking, and final-pay processing.
- HR advisory: senior judgment calls like classifications, disputes, restructuring, and policy.
The difference from software is simple: software prepares this work, a fractional HR team performs it.
Fractional HR vs. full-time hire vs. HR software
| Fractional HR (e.g. People Helm) | Full-time HR hire | HR software (Sprout, Omni, etc.) | |
|---|---|---|---|
| What you get | A senior HR team, part-time | One HR employee, full-time | A tool your staff operate |
| Runs payroll & files statutory for you | Yes | Yes | No, generates reports only |
| Handles DOLE compliance & inspections | Yes | Yes | No |
| Senior-level HR judgment | Yes, shared across a team | Depends on the one hire | No |
| Monthly cost | A fraction of one full salary | Full salary + benefits | Per-employee subscription |
| Needs you to operate it | No | No | Yes |
| Best for | 15–150 staff, no HR dept, or scaling | Larger orgs ready for in-house HR | Companies that already have HR staff |
How much does fractional HR cost in the Philippines?
The honest answer is that fractional HR is priced as a monthly retainer, and the retainer is set against the value of the alternative: a full-time hire.
For context, a full-time HR manager in the Philippines typically costs ₱40,000–₱90,000 a month before benefits, 13th month pay, and the overhead of managing an employee. A senior HR director costs well above that. That's a fixed cost you carry whether the workload is heavy or light.
Fractional HR converts that fixed cost into a shared one. You pay for a portion of a senior team's capacity, so you carry full HR coverage for meaningfully less than one full-time salary. The exact figure depends on your headcount, number of branches, and how much compliance cleanup you're starting with, which is why any serious provider scopes it in a short review before quoting.
Who needs fractional HR in the Philippines?
Fractional HR fits a specific stage. You're likely in it if:
- You have 15 to 150 staff and HR is currently handled by the owner or an overloaded admin.
- You're opening locations and compliance is starting to sprawl across branches.
- You've had a payroll error, a resignation dispute, or a DOLE letter that made the risk real.
- You need senior HR judgment occasionally, but not enough to keep a director on payroll.
Restaurants and F&B groups, professional-services firms, and multi-location clinics are the three business types that most often hit this stage in the Philippines.
Who should not use fractional HR?
Straight answer: if you already run a full, functioning HR department, you don't need a fractional team. You need good HR software to make your existing people faster. Fractional HR solves the "we have no HR person" problem. It's not meant to replace a department that already works.
That honesty matters, because most providers won't tell you when their service isn't the right fit. If you have the team, buy the tool.
Proof: running fractional HR for Philippine businesses
People Helm runs fractional HR and compliance for F&B, professional services, and healthcare businesses across the Philippines: payroll, statutory filings, labor compliance, and hiring, across multiple locations.
For Delgado, a growing restaurant group, we closed four senior roles (Head Chef, Sous Chef, Bar Manager, and kitchen staff) within the first 90 days, while running the compliance behind every hire.
For ECJ, a professional services firm, we run the full monthly compliance cycle (SSS, BIR, PhilHealth, and Pag-IBIG filings plus advisory) so their partners never open a filing themselves.
"They filled our head chef role in 3 weeks after we'd been searching for 4 months. First week we could actually breathe."
Owner, Delgado
Frequently asked questions
What is fractional HR? Fractional HR is a senior HR team you engage part-time on a monthly retainer, instead of hiring a full-time HR employee. You get the full scope of HR work (payroll, statutory compliance, recruitment, and advisory) for a fraction of the cost of a full-time hire.
How is fractional HR different from HR software? HR software is a tool your staff operate to compute payroll and generate reports. Fractional HR is a team that performs the work: filing contributions, handling DOLE compliance, and running hiring. Software needs an operator; fractional HR is the operator.
How much does fractional HR cost in the Philippines? It's a monthly retainer, priced below a full-time HR hire. For comparison, a full-time HR manager costs roughly ₱40,000–₱90,000 a month before benefits; fractional HR gives you comparable coverage for less because the capacity is shared. Exact pricing depends on headcount, branches, and compliance scope.
When should a Philippine business switch from owner-run HR to fractional HR? Usually around 15–150 staff, when payroll, hiring, and compliance start taking real time and the risk of a DOLE finding or payroll error becomes material, but before you can justify a full-time HR director.
Does fractional HR handle DOLE and statutory compliance? Yes. A full-scope fractional HR provider files SSS, PhilHealth, Pag-IBIG, and BIR contributions, manages DOLE establishment registration and labor-standards compliance, and handles inspections.
Is fractional HR the same as an HR consultant? Close, but broader. An HR consultant usually advises. A fractional HR service both advises and runs the function day to day: payroll, filings, and hiring included.
Get senior HR without the full-time hire
If you already have an HR department, buy software to make it faster, genuinely.
If you have staff and no HR person, book a compliance and HR review with People Helm. We'll scope your headcount, branches, and current exposure, and show you exactly what a fractional HR engagement would cover, and what it would cost.
One conversation. You'll know where you're exposed and what it takes to fix it, whether you hire us or not.