Anyone who was a contractor or in consulting during the last recession (2008 – 2009 timeframe) either had their project end early or knows someone who had their project end early. When I say end early, I mean end prior to the originally anticipated end date that was established when the project started.
Once you have been through something like this you become more in touch with the realities of the consulting business. This is when you first ask yourself, “What is the point of a contract end date if the client can just end the project at anytime?” Good question…
The end date is a general guidance point for how long you will be needed. I would say that in general, the end date for contracts that are longer than six months generally are changed 80% of the time. Sometimes the contract will end a few weeks earlier or later. Many times, the project will end on time but the consultant will be kept for optimization work or another project all together.
But, once you have been through a situation where the contract ended much earlier than you originally anticipated, you start to look at the stability of a contract in a different way. You will begin to realize that the end date is good for guidance because it generally assumes that funding for your services are in place until that end date. As the recession taught us, funding can go away at any time. But what is also interesting about what occurred during the recession is that not ALL projects were canceled. So what does this mean? It means that projects that are a top priority stay on track while less critical projects get postponed to a future date.
So when you are evaluating the stability of your next contract, the end date should be taken into consideration as a guiding point. However, what should also be taken into consideration is the probability that the end date will actually be met. This can be determined by taking two additional aspects/things into consideration.
- How critical is this project to the organization. This does not just mean, do they have to do it? There are many projects that organizations have to do, but they do not all have to be done at the same time and they do not all have the same level of immediate importance. Projects that have the highest level of immediate importance have a lower likelihood of being canceled.…..UNLESS
- How likely is the funding for the project to continue? If a project is of high immediate importance and the funding is already in the budget for this calendar year, it is safer than a project that relies on funds that are waiting to be approved during the next fiscal year.
Taking these two additional points into consideration when evaluating your next project will give you better guidance in determining the stability of the project.