Every growing SME hits the same point: spreadsheets and off-the-shelf tools no longer cut it, but hiring a full-time CTO feels like overkill. In 2025, UK businesses are under pressure to digitise, automate, and use AI – yet tech leadership is both expensive and hard to get right.
Enter the fractional CTO. Instead of paying for a permanent executive, you rent senior technical leadership for a few days a month. On paper it sounds great. But how does it really compare to hiring a full-time CTO?
Let’s start with the numbers. A capable full-time CTO in the UK will typically cost £130–£180k per year in salary alone, plus pension, bonuses, options, and employer on-costs. All in, you can be looking at £180–£220k per year. For many SMEs, that’s equivalent to multiple senior hires or a meaningful chunk of profit.
A fractional CTO, by contrast, might charge £1,500–£2,500 per day. On a 4–6 day per month engagement, that’s roughly £72–£180k per year. At the lower end of that range you get access to senior expertise for less than the cost of a mid-level engineer. At the higher end you’re still roughly in line with a full-time CTO, but with much more flexibility.
Cost, however, isn’t the only axis. You also need to consider what your business actually needs at this stage. If you’re pre-product or working on a tightly scoped digital project, you may not have enough “leadership” work to justify someone full-time. You probably need architecture choices, vendor selection, hiring support, and a sensible delivery roadmap – not an executive with a team of 20 reporting to them.
Fractional CTOs are particularly powerful in three situations. First, during transformation projects – for example, rebuilding a legacy system, launching an app, or modernising data infrastructure. Second, as interim cover – perhaps you’ve lost a CTO and need stability while you hire. Third, as a coach for an existing technical lead who’s strong on code but new to strategic leadership.
A full-time CTO makes more sense once technology becomes central to your competitive advantage. If your product is deeply technical, or you’re planning to build a large internal engineering team, you’ll eventually want someone who lives and breathes your context, your culture, and your roadmap.
There are trade-offs. A fractional CTO will never be as embedded as an employee. They may juggle multiple clients, and their time is naturally limited. This means they are best placed to shape direction, frameworks, and guardrails – not to micro-manage every sprint.
To make a fractional model work, you need clear expectations. Define what “success” looks like: maybe it’s a coherent tech strategy, a prioritised delivery roadmap, vendor and platform decisions, and the first couple of hires in place. Make sure there is a strong internal owner (often the CEO or COO) who can keep decisions moving between sessions.
For SMEs watching every pound, the real question is opportunity cost. What else could you do with the money you’d spend on a full-time CTO? If the answer is “hire people closer to revenue” or “extend the runway”, then a fractional arrangement can buy you time and clarity.
In 2025, the smartest UK businesses are treating tech leadership as a sliding scale, not a binary choice. Start fractional to design the right system and build just enough capability. Switch to full-time when technology becomes so critical that you need a leader whose only job is to obsess over it.
