ERMI Labs· Leadership · 3 min read
Fractional CTO vs. Full-Time Hire: What Does Your Business Actually Need?
You think you need a CTO. But do you really need to pay someone $250k a year to sit in meetings? Here is the brutally honest math on when to rent vs. buy.
Let’s talk about the most expensive line item in your hiring plan: The CTO.
If you’re a Canadian founder, you’ve probably looked at the market rates. A competent, experienced Chief Technology Officer in Toronto or Vancouver is going to cost you $200,000 to $250,000 CAD per year. Plus benefits. Plus equity.
That is a serious burn rate.
And here is the uncomfortable question most recruiters won’t ask you: Do you actually have 40 hours of “Chief” level work for them to do?
Probably not.
The “Overqualified” Trap
Here is what happens 9 times out of 10. You hire the expensive CTO. They come in with big ideas. They set up the roadmap in Month 1. They choose the tech stack in Month 2.
…And then what?
By Month 4, the “Strategic” work is done. Now the team just needs to build. But you have a $250k executive twiddling their thumbs, or worse—getting bored and rewriting code that doesn’t need to be rewritten just to feel useful.
You are paying for a Ferrari to drive in a school zone.
The Fractional Model (Rent the Brain)
This is why the Fractional CTO model is eating the industry. Instead of buying the employee, you rent the capability.
You get the Senior Architect / Strategist for 5-10 hours a week. They:
- Review the code quality.
- Grill the vendors.
- Set the roadmap.
- Tell the CEO “No” when they have a bad idea.
Then they leave. Your lead developers execute the plan. You get the C-Level governance for about 20% of the cost of a full-time hire.
When to Hire Which?
I’m not saying full-time CTOs are useless. There is a time and place. Here is your cheat sheet:
Hire Full-Time IF:
- You manage 20+ engineers. (The people management load alone is a full-time job).
- Your product IS the technology (e.g., you are building a new AI LLM).
- You are post-Series B and have money to burn.
Hire Fractional IF:
- You have 1-15 engineers.
- You have “Technical Debt” but no plan to fix it.
- You need to prep for due diligence or an audit.
- You just need someone to tell you if your dev team is actually working or just blowing smoke.
The Bottom Line
Don’t hire a title. Hire an outcome.
If you need someone to sit in a chair for 40 hours, hire a Lead Developer. If you need someone to ensure you don’t drive the company off a cliff, hire a Fractional CTO.
Still not sure? We can jump on a call, look at your org chart, and tell you exactly what you need (even if it’s not us).
