By Desiree Goldey, Senior Consultant and Project Lead, HR Data Labs

Somewhere in the last two years, “we need to run a search” stopped being the automatic answer to a leadership vacancy. For a lot of companies, it was never the right answer to begin with. The data on interim and fractional hiring is starting to say so out loud.

Start with the CEO seat itself. In 2025, 2,032 CEOs left their posts in the United States, and 18% of the people who replaced them were named on an interim basis, up from just 7% during the same period the year before, according to Challenger, Gray & Christmas. CEO exits at publicly traded companies hit a record 446 last year. Boards are not just losing leaders faster. They are increasingly choosing not to fill the seat permanently right away.

Below the CEO level, the shift is even more structural. The global fractional executive market was valued at 9.4 billion dollars in 2025 and is projected to reach 24.7 billion dollars by 2034, according to market research firm DataIntelo, a growth rate of more than 11% a year. Gartner projects that more than 30% of midsize enterprises will have at least one fractional executive on retainer by 2027. This is not a niche staffing workaround anymore. It is becoming a standard leadership model.

The uncomfortable question this raises for search

Here is the version of this story most people will not say directly: a real portion of the retained searches that got launched over the last decade should never have been searches for a permanent, full-time hire in the first place.

Somewhere along the way, “leadership vacancy” and “run a twelve-week retained search for a full-time executive” became synonymous by default, not by strategy. A CFO leaves, and the instinct is to open a search for a new CFO, not to ask whether the business needs 40 hours a week of CFO-level judgment right now, or 15. A VP of Sales exits mid-reorg, and the instinct is to backfill the title, not to ask whether the next six months call for a steady hand or a strategic reset that a fractional leader could run faster.

The fractional and interim data is not a threat to good search practice. It is a scoreboard on how often that first question never got asked.

Where a fractional or interim leader is the smarter call

There are a handful of situations where the math clearly favors fractional or interim over a permanent search, and clients rarely hear this from the firm that gets paid to run the permanent search:

Transitional moments. A company mid-acquisition, mid-restructuring, or between strategic chapters often needs steady, senior judgment for six to twelve months, not a ten-year hire locked in during a period of maximum uncertainty.

Specialized, time-boxed expertise. A go-to-market reset, a systems overhaul, or a compliance sprint frequently calls for a specific skill set that will not be needed at the same intensity once the project is done.

Bridge coverage during a real search. An interim leader can stop the bleeding while a proper search runs its full course, instead of forcing a rushed permanent decision because the seat has sat empty for two months.

Budget-constrained growth stages. Companies that need C-suite-level thinking but cannot yet justify the full compensation and equity load of a permanent executive are a large part of why the fractional CFO and fractional CMO markets have grown as fast as they have.

None of that is an argument against retained search. It is an argument for treating “should this be a permanent hire” as the first question in the process, not an assumption baked in before the process starts.

A senior consultant’s take

I have watched this pattern play out across enough engagements to have a strong view on it.

“Most companies are not really choosing between running a search and not running one,” I tell clients. “They are skipping the question of whether the role needs to be full time at all, and a lot of searches get launched before anyone in the room asks that out loud. The firms that keep pretending every vacancy needs a permanent hire are going to lose credibility with clients who are already looking at the fractional numbers themselves.”

Where retained search still wins, decisively

None of this means fractional leadership is the answer everywhere. A fractional executive is, by design, splitting attention across multiple organizations. For roles that require deep, sustained ownership of culture, long-horizon strategy, or a multi-year build, a permanent hire found through a rigorous retained search remains the stronger bet, and the data on interim CEO tenures backs that up: interim leadership solves a short-term problem, it does not replace the long-term case for the right permanent leader.

The point is not that search is obsolete. The point is that the firms who win the next decade of this business will be the ones honest enough to tell a client when they do not need what they are about to pay for.

If you are staring at an open leadership seat and are not sure whether it calls for a full retained search, an interim bridge, or a fractional model, that is exactly the conversation to have before the search brief gets written, not after.

HR Data Labs’ Executive Search practice runs retained engagements for director-level and above roles across industries, including nonprofit, and will tell you upfront if a permanent search is not the right first move. Talk to us before you write the job description: hrdatalabs.com/executive-search

References

Challenger, Gray & Christmas, “2025 CEO Turnover Report: CEO Exits Fall From 2024; Public CEO Exits Break Record,” published 2026.

Challenger, Gray & Christmas, “Challenger CEO Turnover Report: CEO Exits Surge 70% in April 2025, Women CEO Rate Falls,” 2025.

DataIntelo, “Fractional Executive Workplace Market Research Report 2034,” updated March 2026.

Gartner projections on fractional executive adoption among midsize enterprises, as cited in industry reporting, 2026.