Revenue opportunities abound for channel partners — what’s keeping them from going after what they want?

Lorna Garey

March 1, 2016

18 Min Read
5 Ways to Crack the Skills Ceiling

Lorna GareyEnterprise IT hiring is stalled. Employment watcher Janco predicts that just over 100,000 new IT jobs will be created in the U.S. market in 2016 versus 113,000 in both 2014 and 2015. The consultancy attributes this to CIOs and CFOs putting the brakes on initiatives that don’t have strong executive support.

Fewer in-house projects, fewer new requisitions.

Even Robert Half Technology’s generally optimistic IT Hiring Forecast and Local Trend Report says just 22 percent of U.S. CIOs they surveyed plan to expand their IT teams in the first six months of the year.

And when they do hire, salaries are flat. Janco’s 2016 IT Salary Survey shows compensation for IT pros overall increased by an anemic 1.39 percent in the last 12 months.{ad}

This all sounds like fantastic news for the channel. CIOs have always skirted staff shortages by increasing outsourcing, and soft demand means you can pick up expertise on the cheap. Right?

Read the fine print — deep decline in demand for outdated specialties is skewing the numbers. Experienced IT pros with security, data center management and mobility chops still command premiums.

“Where do we see a shortage of talent?” says Vince Bradley, CEO of WTG. “Mobile, engineer, security.”

Coders are tough to find, too, which doesn’t bode well for breaking into the Internet of Things market.

“A shortage of qualified talent is causing a lot of angst in the channel,” says Greg Richey, director of professional services at distributor Ingram Micro. “Security, networking, app dev and within verticals like retail, finance or health care.” (Telecom Brokers’ Nancy Ridge discusses the dearth of women choosing IT and technical careers here.)

The stats back them up.

By 2018, Wi-Fi traffic is set to exceed all 2G, 3G and 4G cellular traffic combined, says a study by ABI Research. By 2020, in-building traffic will hit 53 exabytes per month. No wonder Robert Half says wireless network engineers, with a pay range of $108,750 to $150,750, saw a bump of almost 10 percent over 2015.

The 451 Alliance’s Voice of the Enterprise surveys tell the security and data center demand tale: More than half of enterprises employ fewer than five dedicated security personnel; 22.6 percent have no security staff at all. To compensate, spending on security products and outsourcing is …


… strong, with 44 percent of enterprises expecting to increase their budgets.

“It’s data security, it’s physical security, it’s a broad swath,” says Richey.

For data centers, 60 percent of enterprises plan to increase spending on servers, and 79 percent plan to spend more on converged infrastructure in 2016, often to build hybrid clouds. Are you staffed up to capture this business without pricing your services out of CIOs’ budgets?

“The talent shortage is a double-edged sword because it drives up the cost of engineering,” says Neil Medwed, president of Preferred Technology Solutions, who likens the situation to a pro baseball team that overpays for midlevel pitching.

Few experts see competition for hot specialties easing. For channel companies, coping takes a mix of tactics. We gathered advice from a range of channel experts. It boils down to creative coping mechanisms, keeping employees engaged with new challenges, mastering the certification game, crafting the right company culture and hiring smart and then retaining well.

Get Creative

For most agents, the big risk is waiting too long to either hire the expertise needed to ramp up new services or figure out a workaround.

“It’s truly about agents making the time to expand their worlds and vision,” says Bradley. “Getting agents to adopt new technology and network with the IT industry has always been an issue. Typically folks do not do something until they have to, such as because of client ultimatums.”

The flattening of barriers between telecom and IT channel companies is giving rise to an interesting dynamic, as firms with telecom roots compete with “born in the cloud” solutions providers and, in many cases, fail to see the danger of procrastination.

“Customers need agents with cloud skill sets more than ever,” says Jo Peterson, vice president of converged cloud and data services for Clarify360, a Teleproviders Company, and co-founder of Cloud Girls. “They are short-staffed, or short on internal skill sets. Cloud is the wild, wild West right now in terms of not having enough qualified folks on both the vendor and partner sides of the O.K. Corral.”

Three options to cope with current holes in the talent fabric are to forge alliances with other providers, specialize so you own a market or source talent from master agent or distributor partners.

In fact, Drew Lydecker, president of Avant Communications, says where some see a shortage, his company sees the opportunity to become more of an enablement distributor.

“What we have seen is a lack of …


… skilled knowledge workers around cloud and some of the next-generation technologies within our traditional customers, both from a VAR and from an agent perspective,” says Lydecker, mostly because they’re in transition and don’t know who to hire. “We’ve filled that void,” he says, often with people hired from manufacturers including Cisco, EMC and NetApp.

When a partner is ready to add staff, Avant will step in and help identify the right person.

Bradley agrees that the talent is there, from both vendors and masters, if agents would only ask. 

“We have implemented a higher level of cloud training, working in partnership with CompTIA and Microsoft technical resources,” he says. WTG is also beefing up its sales engineering practice.

Besides sourcing help, many partners are willing to work together on a contract — if they can get past turf worries.

“We are seeing more and more people coming to us and saying, ‘Hey, I’m doing a security job, I need to put it on XYZ server, and I need some cloud, who do you know that can help me provide that solution?’” says Richie. It makes sense — smart people like to collaborate, and not just within their own teams.

Peterson says she’s addressed the need to protect the business by requiring a formal, signed memorandum of understanding between parties outlining exactly who owns the customer relationship.

Another option for agents is to specialize and staff up accordingly. Whether cloud, security or a vertical, hiring one star can entice others. Lydecker says Avant’s focus on next-gen cloud is attracting partners and individuals who want to get in on the wave of disruption that the cloud is causing.

Spinning up a Practice

At Channel Partners Conference and Expo, we’re offering educational sessions on developing security and IoT practices that can establish your company as that “go-to” source.

No matter the technology, when adding a specialization, some principles apply.

First, build on what you know. “Leading with Microsoft products, such as 365, flattens the curve,” says WTG’s Bradley. “The Microsoft ‘rules of engagement’ in their new channel program allows for renewals, so essentially all agents need to do is renew their existing customers on cloud products and services. Once that leap is made, they are officially into the cloud/IT space overnight.”

Partners also need to concentrate on …


… maintaining a talent funnel and deploying staff mindfully. Richard Murray, president of CarrierSales, says his company takes a layered approach that uses expensive talent wisely.

“With our sales engineering model, we go in for the initial deep dive, lay out the design, then involve the rest of our team.” They take it from there, and engineering can go on to the next design. “This helps significantly in staying scalable,” says Murray, while educating people up and down the stack.

Take advantage of resources, especially hands-on training. For example, WTC offers “Cloudology” trainings and issues a cloud certification; the goal is showing agents how to leverage the industry resources available to them. For security, Avant’s chief cloud officer, Ron Hayman, is a noted expert in cloud security and has led the company to begin developing certifications in ethical hacking and other areas that interest technical talent.

Yes, it costs to take employees out of the field. But as the saying goes, if you think education is expensive, try ignorance.

“A big part of the problem is that there is no ‘easy button’ when it comes to this stuff,” says Bradley. “You have to do the heavy lifting.”

First, realize that dabbling around the edges won’t work if you want to specialize in complex technologies like hybrid cloud design or security. “You really need to commit and create an entire arm of your business devoted to it,” says Murray. “Customers want the full gauntlet of consulting services, design, implementation and support. It creates a revenue stream, but also requires that much more time.”

Not to mention specialized engineering expertise.

Certified Madness

Vendors uniformly insist on certifications for high-demand products, and plan to require more. That’s a challenge for the channel because of the cost of training, the overhead of making sure you consistently have the right people in place — and the worry that you’ll spend on certs only to have the staffer use those skills to get a higher-paying gig elsewhere.

“It’s a reasonable question that every employer must deal with,” says Hilary Gadda, director, Telepartner Channel, TelePacific Communications, and co-president of Women in the Channel. “We don’t like to manage to the lowest common denominator. Not doing something that makes sense because you’re worried about losing your investment to someone else is not a good way to run a business.” Gadda invests in certifications for employees when it benefits the business and provides a strategic advantage. “We also think it is a method for improving retention,” she says.

Reimbursed training is a valued perk — for employees, being valued and challenged is often as important as a raise.

“Sometimes engineers feel underutilized and don’t like …


… being kept in a box, and will entertain moving onward and upward,” says Murray. “It’s easier for us to retain because we are supporting so many different kinds of telecom, cloud and IT services.” With more products and related certifications, employees can broaden their product knowledge and skill sets.

“One of the exciting things about our industry is how fast technology changes, so it’s difficult to get bored,” says Medwed. “The flip side of that is that unless you commit your company to providing ongoing education and have proper staff count to accommodate taking engineers and consultants out of the field, your engineers — and your company — fall behind quickly.”

Be smart about how industry certifications and provider partnerships look from the outside, to both potential customers and employees.

“We understand the need to be seen as relevant in the eyes of customers who may not know anything about us otherwise,” Murray says. Thus, he does invest in certain certs, as does Peterson: “This year four of my team are working on getting their ITIL-V3, VMware-VCP-DCV, AWS Certified Solution Architect and two separate CompTIA certs,” she says. 

Also look at your posted list of vendor and technology partners from a potential hire’s point of view. Does your site say, “We’re a cool and innovative place to work”?

“We have contracts with over 350 providers.” Murray says. “It gives candidates plenty of technology to embrace and learn.”

How Important Is Face Time?

Perhaps the ultimate perk is not having to commute to an office. There are two distinct schools of thought here: Do you go for the best talent no matter where it resides, or do you feel in-person collaboration is too important?

“We believe heavily in everyone being in the office at all times,” says Lydecker. “We believe that because, with as fast as the market is moving, with as fast as the industry is demanding change because of disruption, we have to be fast ourselves.” He says that having engineers, coders, salespeople, pricing analysts and other staff together in the same physical space gives rise to new ideas and makes collaborating on projects much smoother. “The pace is so quick that if you’re home, if you’re on the road too much, you’re really missing what’s taking place beneath you.”

If you’re going to be a “come to work” company, you need to make the workspace someplace employees, including Millennial employees, want to spend many hours a week. Lydecker says Avant’s Chicago-based office is modeled on…


… Web 2.0 companies, with Google-like amenities. It’s preparing to open a new, cutting-edge facility in April, also in Chicago, and has sites in London and Atlanta. Lydecker says his people stay late, play together and learn from one another, and that vibe is attracting a surfeit of talent, which he is able to put to work for partners.

CarrierSales and TelePacific, meanwhile, aren’t set on a location-required requisition. “We want the best talent possible, and that may be someone working on the other side of the country from our headquarters,” says Murray.

“We are willing to pay for performance, support sponsoring work visas when it is a good business decision and embrace remote employees so that we are not locked out from the best talent due to geography,” says Gadda.

As to culture, Millennials hate boxes, so don’t discount letting people move fluidly between tech, sales and operations. It may seem counterintuitive to send an expensive data center engineer on a sales call, but the benefits of cross-pollination can be significant.

5 Pro Tips: Hiring

1. Don’t dawdle or go on a unicorn hunt. Robert Half says it sees companies accelerating the hiring process to avoid losing top candidates. Before you begin interviewing, ensure your HR team understands the IT talent market. Be realistic about the skills and years of experience you can get and where you can make concessions and train later. One channel exec we spoke with defined a “perfect engineer” as having quality knowledge of both network and systems architecture and an understanding of the Microsoft world as well as switching and routing. Nice if you can find it, but prioritize. And, bring technical leads into the process early. Gadda says TelePacific’s collaborative talent acquisition group and teamwork across business functions yields great hiring decisions. 

2. Don’t get hung up on paper. Does every employee really need a four-year degree? “There are multiple paths that a young professional can take to get into this field,” says Medwed. “Many times, depending on their objectives, trade school may be a better way to go.” The same goes for industry-specific training. Someone with general technical acumen plus soft skills is a better bet than someone with a string of certifications who thinks she knows it all. “When it comes to staff, as long as that person has the right communication skills, we feel in most cases, the rest can be taught, provided the employee has a willingness to learn,” says Murray.

Ingram’s Richey says there are innovative STEM education options springing up that channel partners can take advantage of.

“The government is going out and funding formal higher-education courseware in cybersecurity; we’re seeing organizations in the training business developing …


… certification programs rather than, or in tandem with, degree programs,” he says. Someone getting a computer science degree might also come out with a CISSP certification, saving you that expense.

3. Consider agencies. Medwed says he works with VAR Staffing, which specializes in the indirect channel. The keys, he says, are selecting an agency partner with knowledge of your industry sector and geography and then letting it be proactive. “We make sure that VAR Staffing understands our talent needs on a quarterly basis so when they identify a quality candidate that fits our needs, they can alert me,” he says.

4. Don’t lowball. Before beginning to interview, research going rates in your area. Robert Half offers detailed guides. Just because you’re not looking to hire in San Francisco doesn’t mean you can get away cheap. Among 25 major markets included in the Robert Half IT Hiring Forecast and Local Trend Report, the most robust job growth was in Cincinnati, where the firm expected a more than 14 percent hiring jump in the second half of 2015. Charlotte was in second place, followed by New York and Boston. Skill-specific pay exceptions or bonuses may be necessary.

5. Do concentrate on soft skills. Before hiring, ensure potential employees can present on and document their work and that you’d feel comfortable with them talking to a customer’s CEO. Remember, Gartner says that in 2005, IT controlled 70 percent of technology spend. By 2017, the consultancy projects that percentage will be less than half.

“It’s not just IT that purchases cloud any longer,” says Peterson. “The lines of business are doing their own purchasing.” You can have the most intelligent engineer in the world, says Murray, but if they can’t speak the customer’s language, you may as well not bother.

Avant’s Lydecker sums it up: “At the end of the day, people buy from people they really like.”

5 Pro Tips: Retention

1. Set a policy on reimbursements and counteroffers. How much will you invest in training and retraining staff? Is tuition reimbursement open, or will you pay only for courses relevant to the employee’s current role? “We take retention very seriously by making sure that our employees receive the training and support they need to advance, and then we promote from within,” says Gadda.

Will you counteroffer to keep a top employee? Some companies don’t, period. They view it as a lose/lose proposition — the employee may use the offer to extract higher pay elsewhere or, if she stays, the relationship will have soured. Others say it’s just business and make one counter as a matter of course for valued staff.

2. Be creative with incentives. It’s not all about the money, especially for Millennials and older workers looking to scale back. Consider flexible schedules, full-time telecommuting, enhanced …


… health-care benefits or unlimited vacation. Stay with us here — big tech companies, including CA and Netflix, have offered unlimited time off for years and have seen a net benefit. Employees feel that you trust them to manage their work/life balance. You’re freed from the administrative burden of tracking PTO, and no accrued vacation means no payouts at termination or annual rollovers. You should discuss the legal considerations with your attorney.

3. Be transparent on compensation. PayScale recommends issuing total compensation statements that show employees exactly how much the company spent on health and wellness benefits, retirement savings, educational costs and any other benefits on top of regular salaries and commissions. The company offers software that automates that communication.

4. Spend on employee education beyond just certifications. Peterson regards investment in staff as a way to grow her business. “Our customers are savvier, and we need to keep up with the conversation,” she says. “Education is a business must, not a business maybe. Moving up the stack via smarter employees will yield larger deals that organically grow.”

Succession planning is important as well, so employees can visualize a career ladder, not just a path. “For so many businesses there are few places to grow,” says Rebecca Rosen, president of Sales Enabled and a board member for Women in the Channel. “If you can’t offer titles, education is a great tool for retention.”

5. Specialization may allow you to charge a premium, and pay accordingly. In a complex world, expertise is currency. “Resellers and some staffing houses are taking advantage by building particular disciplines that they become known for,” says Ingram’s Richey. “We have resellers that are very good in security and have established themselves as the go-to guys.” That sort of reputation can help with retention. Smart engineers like to be on the cutting edge.

Agents Can Hire Their Way Around Roadblocks

Firms with traditional telecom backgrounds face some unique staffing challenges — while it was relatively simple to start selling Microsoft Office 356 subscriptions, we’re moving from cloud low-hanging fruit to systems of record and starting to see cloud economics work against simple sales.

Customers now want cost comparisons among multiple cloud providers, an ability to run cloud TCO against existing data center costs, even tipping-point analysis.

“Customers who were initially very cloud-forward and have amassed very large monthly recurring charges — $100,000 plus — with cloud vendors and are starting to …


… look at migrating back to more of a hybrid/fixed cost model,” says Jo Peterson, vice president, converged cloud and data services for Clarify360, a Teleproviders Company.

Do you have employees able to run the economics of these complex deals? If not, get some, or competitors will.

Agents also tend to shy away from app dev engagements, but the fact is, software is eating the world.

“Today’s conversations with IT executives encompass the entire IT stack,” says Manon Buettner, principal and CEO of Nuvalo LLC. “It has always been said that ‘you lead with applications and business conversations and the services follow.’ In 2016, this is truer than ever, and those speaking apps and infrastructure will win the services as ‘pull-through’ business.”

Greg Richey, director of professional services at Ingram Micro, also calls out app dev skills as being vital to the next big opportunity: Internet of Things.

“How do you make your office heat come on when you scan your badge in a parking garage?” he says. “It’s code.” Ingram has created an application development network to help with that transition, but agents that prioritize hiring developers can get a jump.

Lorna Garey is editor-in-chief of Channel Partners.

Twitter:  @lornagarey

Read more about:


About the Author(s)

Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like