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December 16, 2017

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Take Advantage of Hiring Seasonality

Everyone can probably guess the times of year in which hiring is most and least active. What few understand, though, is how to use this knowledge. Truly understanding the seasonality of hiring can help an independent IT professional choose projects, negotiate terms and plan for the future with an ace up his sleeve.

"There is a pattern in hiring that’s pretty much the same, whether you’re in a good market or a bad market," says Michael O’Connor, president of back-office service provider Iprofessional.com. "There are some good times to look for a job and some bad times to look for a job." Obviously, the amount of money a company spends on hiring will vary from year to year, but O’Connor says that the "curve" of seasonality remains consistent.

No one engaged in the independent contractor life will be surprised to learn that the summer, particularly August, is an unfavorable time to launch a job search. "The reason is that many of the contracts require multiple decisions," says O’Connor. "And the decision makers are not there."

O’Connor says the worst period for job seekers runs from the week prior to Thanksgiving through the end of the year. And not just because of the holidays. "It dovetails with the end of the budget year," he says. "People are running out of cash."

Hidden within this second blackout period, however, is a small blip of activity in some companies. "There’s an unusual uptick a week before the end of December," says O’Connor. "There are some companies that require you to spend your budget money because it affects your budget the following year. So, in the consulting market, they’ll either hire someone who they weren’t going to hire before, or they’ll pay money in advance for the following year."

Positive hiring trends start in January and spike in March. "There’s usually a significant increase in activity," says O’Connor. "Companies who are newly empowered by additional budget money in January have to figure out what to do with the money. It takes them a month to a month and a half." O’Connor says that the contracts that result generally start in March.

Following March, O’Connor says that there is a gradual decline through June, which is followed by steeper dips over the course of the summer. The early fall is cited as another healthy hiring cycle. "The second best hiring period is mid-September through mid-October," he says. "People get back to work and things begin to crank again." Understanding the seasonality of hiring can play a crucial role in the way an independent professional negotiates and whether he accepts a given contract. "You don’t want to have a contract that’s planned to end in one of those fallow periods," says O’Connor. "You want to plan to work through that period or, as you’re approaching that period, make an agreement with the client to cut back on your hours, your days or even your billing rate so that you have some money coming in and so you can work through those periods."

The importance of this type of planning is amplified in a down market. O’Connor says that, even in a good market, a consultant whose contract ends during a down-cycle in hiring can be out of work for a month. In a poor market, the contractor can expect to be out of work for several months. "I ask you," says O’Connor, "is it better to earn $100 an hour for six months of the year or $60 an hour all year?"

What it comes down to, says O’Connor, is a simple matter of strategy. "It’s not just a billing rate issue," he says. "It’s the nature and duration of the contract, and when the contract ends. You have to think tactically."

-Josh Getman
Contract Professional Intelligence Report
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