Is now a good time to start contracting?

You are thinking about going contracting, but the big question you have is whether now is the right time to find a contract, there is a lot of uncertainty around, and if you decide to start contracting at the wrong time, you could be left without a role for months. When is it a good time to start contracting?

Two significant factors are involved in the way contract roles are offered on the market, and if you can understand these, then they will give you more insights into when to look for contracts. The first is the cyclical nature of the jobs market, which is easier to understand that the second factor, which is outside events. The Olympics in London, Brexit, Brexit part 2, HMRC forcing out public sector contractors, a large contractor base being canned are all examples of outside events, the second factor that can affect you. The second one you can’t do much about, you can think about what is happening and whether that might affect you and plan around it, but there will always be unexpected events.

To look at the cyclical way the contract market works it is helpful to look at the permanent market so we can see the differences as if you have been a permanent employee for a while you might expect the two markets work the same, they don’t. The permanent markets work along these lines:

Corp A has a role, and someone from Corp B fills it, the management team at Corp B are secretly quite pleased as Employee A used to always wear a cap at work, and it looked untidy. Because Employee A left, his role is advertised, but no one really knows what he did so the job spec is a bit of a nightmare. Eventually, someone is found to meet the job spec but because no one knows what the old employee did, the new employee (employee B who doesn’t wear a cap but has really messy hair) is unable to meet any of his annual appraisal goals so really complains to his manager that he is too busy. Employee B’s manager approves a new position, and they manage to fill that quite quickly with one of Employee B’s friends. Employee B and Employee C are friends and together with the rest of their local rugby team decide to holiday together. Employee B and C’s manager realises that it looks terrible that they can go on holiday together and nothing noticeable, positive or negative happens, so he approves a new role Employee D.

Employee D is there to provide cover so that there is always at least one employee in the office. After a few months, Employee B, C and D are all bored as there isn’t a role for one person, let alone three so one by one they leave. This leaves Manager A with three unfilled positions and no direct reports. After one-week disaster strikes Manager A and there is a hiring freeze. Six weeks later, Manager A does not have any direct reports, and so when Director A realises, Manager A has no direct reports, Manager A gets moved aside to a cushy roll in the canteen, a position he leaves in a few weeks without any fanfare [Apologies for the bad joke]. Coming up to the end of the financial year Director A realises that his budget has shrunk significantly because of the lost team so he advertises and hires a new team of four people. No one really knows what they are meant to be doing so one of the “fresh-faced” employee leaves. That role is filled in December by, would you believe it, Employee A, with the cap. Employee A quickly settles into showing people where the table football table is, and Corp A is back in the situation that it has a role to fill. Corp B has added two new positions so Director A is happy as his budget has almost doubled and he can point to both healthy turnover of staff bringing new ideas and the continuity that only Employee A can provide (even if he does wear a cap to work).

Each company has a different cycle for each role or team, and there are some quieter periods such as Christmas and Summer, but positions can go unfilled for weeks or months so even with the quieter periods there are generally roles available.

If we take a look at the contract market, then it is entirely different. What happens in the contract market is in January, Director A decides that they need to move faster and applies pressure to Manager B. Manager B decides to hire on the contract market so advertises 3 roles, they fill these throughout January and early February. April is Easter, and so no one advertises new positions, perhaps the contractors are forced to take a few weeks off. In May the rubbish contractors who had three-month contracts are not renewed, so the three roles go back onto the market and are filled quite quickly.

The end of July and August are summer holidays, and fun things like the world cup and the euro’s so no one has time to manage a new project, so there are no new roles put onto the market. After the summer holidays, Manager B considers his position and realises that he needs to get a move on if he is to meet his objectives so he adds three new contract roles to the team and fills those three roles. The project starts finishing in October, and by November all the roles have ended, just in time for the Party season. Manager B has completed his objectives, Director A is pleased the budget was so high and decides that next year they will go even faster.

Typically, you should be ready to start a new contract in January and plan to not pick anything up over the summer or around Christmas. There will always be unpredictability, so you need to ensure you have enough money to cover having to wait for a while to find a new contract.