The fourth quarter was traditionally known for having as little hiring activity as the always slow July and August months, but that’s no longer the case. A 2016 study by OfficeTeam of 300 human resources managers at US companies found that 26 percent of respondents typically increase hiring in the fourth quarter. 69 percent of those bring on staff at the end of the year to fill vacated positions, 61 percent added workers to deal with seasonal upticks in business, and 51 percent added new positions.
"It seems that business just keeps going through the holidays," says John Challenger, CEO of Challenger, Gray & Christmas. "There doesn't seem to be the kind of letup that there used to be." Instead, there are many different kinds of hiring that occur in the fourth quarter. There are several reasons for the increase in hiring activity in the fourth quarter.
Hiring in the fourth quarter can offer some companies tax "Hiring managers and bank CEOs will typically try to reduce their operating profits by incurring search fees towards the end of each year, to avoid paying taxes," says Josiah Whitman, executive recruiter at Financial Placements. For his firm, the fourth quarter is the busiest season for job orders, with 36 percent of annual job orders.
In addition to saving money on taxes, hiring in the fourth quarter allows hiring managers to get the talent they need before the allocated money for that talent disappears. “The most common fiscal year-end is December 31”says Liz Ryan, founder and CEO of Human Workplace. “Companies large and small have allocated money to hiring new people, but if they don’t hire those people by the end of the year, the approved headcount may disappear.”
Beyond present benefits, hiring in the fourth quarter sets companies up for a successful next year. In January, after bonuses are paid out and ‘new year, new me’ resolutions are made, many workers begin looking for new jobs. This turnaround-heavy time sees a flood of candidates hit the job market and, with them, a ton of hiring managers and recruiters looking for talent. “Fortunately, in recruiting, there are no laws limiting when you can recruit, so smart recruiting leaders will time their recruiting effort precisely prior the point before everyone else re-enters the recruiting game” says Dr. John Sullivan, CEO of DJS. Fourth quarter hiring allows you to get in ahead of the feeding frenzy.
“Pre-turnaround hiring strategy allows you to cherry pick top talent before everyone else starts aggressively courting the same people” says Dr. Sullivan. Even if employees aren’t ready to walk away before the holidays, without bonus in hand, it is advantageous to begin the conversation early. That way, once they receive their bonuses and are ready to put in notice, you’re already ready to extend an offer that they’re ready to accept.
Before you do anything else, figure out what you need. You should do this well in advance of the hiring season. “Looking at all your internal growth projections and expected turnover, put together a picture of probable need” says Kevin Wheeler, founder and chairman of the Future of Talent Institute. “Break this down by occupations, skill sets, profession, or whatever makes sense.”
Once you know what you need, order positions by priority to fill and decide what you require from candidates to successfully fill each position. Even better, figure out what prerequisite experience and talent is necessary and what is nice to have, but not a must-have.
Once you know what your talent needs, it’s time to figure out how you will meet those needs with qualified candidates. You have several options, from using recruiters or recruiting technology to pursue passive and active top-tier talent, to hiring junior and entry level talent and training them, to some combination of both. “Will you put in place internal development such as Cisco and IBM and HP have done for years to supply some of the people you will need?”says Wheeler. “Or will your plan be to vigorously recruit from your competition in the hopes of getting what you need?”
There are pro’s and con’s to all hiring strategies, but any well thought-out strategy is better than no strategy. Important, again, is that you start all of this planning before you’re in the moment of needing to fill positions, whether they’re new positions or newly open positions resulting from predictable churn. “Proactive planning is the only way to get the people-cycles under control.” says Wheeler.
Want to learn more? Read the full article on the Happie blog!