Every silver lining has a cloud, and the economic recovery is no exception. As IT activity picks up, so employers want to pick up IT staff, and before you can say 'curriculum vitae', the skills shortage is back with us.
A recent survey by Reed Recruitment found 94 per cent of organisations expect to hire IT staff in the third quarter of 2004, with two-thirds expecting to increase recruitment, even at this traditionally quiet time of year. Also, projected redundancies are at their lowest level for two years.
As the general pressure on the IT skills pool increases, resellers face particular problems. Some are historical, as Grant Notman, UK general manager of vendor RAD Data Communications, explains.
"The channel was originally formed in part by people from manufacturers wanting to take their knowledge and make money working for themselves," he says. "This meant they came with a certain level of expertise, and the people they employed were of a similar age and background.
"Now those people are either retired or in senior positions, so unless they've made an effort to pass on their skills their businesses lack the skills."
Many of the places where these skills were developed no longer exist. When the fat margins of the 1980s dwindled away, so did the extensive training courses where vendor sales representatives learned their trade.
Now that vendors are expecting the channel to do more work in selling and supporting their products, resellers find themselves in a double bind: they need more skills than before, but the skills pool in which to find them is less well stocked.
What talent there is tends to gravitate towards vendors. Who wants to 'vegetate' with a reseller when they can work for an international company their friends have actually heard of? When they get there, they may find the grass is exactly the same colour as the paddock they have just left, but it doesn't stop them going.
Certain technical skills are scarce within the channel, mostly in up-and-coming technologies such as voice over IP. But the major concern is finding sales skills, especially at a strategic level.
"The biggest difficulty we have is in finding people with business analysis skills who have experience of the SME marketplace," says Ian Dawkins, sales manager at Concentrix, an Accpac reseller.
"We normally see one or the other, but very rarely both together. We have no problem with product knowledge because we prefer to deliver this by training anyway."
Dominic Monkhouse, managing director of managed hosting firm Rackspace, says: "People don't have the right business skills and can be techie-focused. We tend to employ those with the right attitude but who are not from the hosting industry."
Making the leap from understanding the customer's business to selling them some technology is also difficult.
"The most sought-after role within resellers is that of 'architect': a technical expert who can go into a customer and discuss business needs with the board, then translate this into a technical solution specification," says Deborah Lees, UK marketing manager at Sun distributor GE Access.
Some resellers simply 're-tread' techies into sales reps. "They try to turn non-sales staff into salespeople without recognising they need more than a new phone number and a BMW," says David Freedman, IT sector head at sales performance consultancy Huthwaite International.
"This results in the all-too-familiar mistake of developing a sales strategy around technical features or unique value-add, rather than business benefits.
"Instead, resellers should explore whether any accounts are more appropriate for more low-touch methods of business development, and divide the pipeline between those salespeople best skilled for high- and low-touch contact with customers."
In the worst cases, shortage of skills is holding back the recovery in channel sales. "Losing sales through lack of selling skills is tantamount to turning sales away," Freedman says. "When resellers don't have the right business skills and fail to negotiate effectively, they lose potential sales or make less profit than they should."
Hard-pressed sales representatives tend to stick to their existing customers, even if it means working hard for tiny margins. "They tend to work in their 'comfort zone' instead of finding new, more profitable customers," says Isobel Rimmer, director of Masterclass, a channel recruitment and sales training company.
Over-enthusiasm can be just as damaging. "An underskilled workforce typically oversells new technology, such as networked storage, believing it to be a series of point technologies and not an integrated solution," says Sam Samuel, industry strategist at networking and storage distributor Zycko.
"This results in customer disappointment and a loss of future sales."
Additionally, there are risks of underskilled people doing sub-standard work and undermining customer confidence, and of burning out the remaining good sales staff by burdening them with ever higher targets. All in all, the skills shortage could hit the channel hard, constraining growth and damaging reputations.
Many expert staff were let go during the recession, and resellers may be hoping to re-hire them now. However, many of the redundant staff were people in their 50s who have 'down-shifted' and settled for less pressured jobs in other fields, or gone into consultancy.
But are those who are still looking for a job really the kind of people resellers want?
"In the recession the channel did what everyone else did: they removed non-performers," says Martin Anderson, head of partner operations at ISP Pipex.
"The good people either stayed where they were or had a new job 10 minutes after leaving the old one. But the poor performers are still finding it hard to find another role."
Resellers may then find themselves having to pay dearly to re-hire, or take people on as consultants at far higher rates than their old salaries. Even then they may not get the right people, Monkhouse says.
"There's a huge wage battle going on, but as far as I can see it's not always for the people with the best experience," he says. "We grow our own talent internally and don't play any part in the wage inflation that can get really out of hand."
If resellers want to engage in a wage battle - and it may be unavoidable if they are to keep their home-grown talent from straying - they need the right ammunition.
"You have to get salaries right, and you may well have to pay more than a vendor would pay, because of the perceived benefits of working for a vendor," says Rimmer.
"You also have to have realistic expectations about the skills available and what they cost. If you offer £18,000 for three years' networking experience you won't get much response."
If outbidding vendors is not possible, resellers must emphasise their other strengths to attract and keep skilled people. "A higher salary often isn't practical," says Bob Tarzey, service director at analyst firm Quocirca. "But a reasonable-sized reseller may have a better medium-term future than a medium-sized vendor."
He adds that increasing ageism among vendors - where anyone over 40 is deemed to be over the hill - can enable resellers to pick up people with just the kind of experience they need, and whose grey hairs will inspire trust in their customers.
Money isn't everything, anyway. "We see people looking increasingly for a more holistic approach," says Monkhouse. "As long as the pay is thereabouts, they're more interested in the firm's values and the conditions it will offer. Many of the people who join us say our core values and culture are a big plus, not just the money."
Dawkins agrees. "Clearly pay and structure are very important, but we also believe that environment, culture, career structure and progression, and 'involvement' are key elements."
Having good relations with vendors helps attract high-calibre people, Rimmer finds, because they are less likely to feel they are joining a poor relation. But strong candidates are put off by sloppy interviewing.
"Some resellers have hardly any processes for interviewing and recruitment. The quick, efficient employers get all the good candidates," he says.
Once people are hired, resellers should focus on training needs, advises Richard Lown, managing director of training company Complete Learning.
"Channel firms that integrate their newly hired staff through a professional induction get to keep people for longer and usually produce more sustainable results," he says.
Professional people expect to be professionally managed, so resellers need a trained human resources manager. If they are too small to justify a full-time post, a freelance working one day a week is a perfectly acceptable substitute.
"Skilled people are looking for a clear career structure and the feeling that they'll succeed," says Freedman. "This means they seek an environment that doesn't just expect them to be successful, but equips them to be successful and rewards them when they are.
"Implementing a clearly defined career structure with ongoing training and coaching demonstrates that the employer is serious about skills development and career progression."
Rimmer agrees. "People need to see that there is a career path, that they can transition from, say, telesales to field sales or technical sales to technical consultant, and that there's more than one choice of career path," she says.
A well thought-out training programme is a big draw. "Most people don't get enough training, so if you can demonstrate that you provide skills training as well as product training it is a big plus," says Rimmer.
"One client said to me, 'Why should I do sales training? I hire experienced salespeople.' But even if you're hiring talent it has to be nurtured and coached. We all get tired and rusty."
Trained staff feel valued. "Training, particularly when combined with ongoing coaching, vastly improves employees' motivation, which in turn improves staff retention," says Freedman. "This is a critical issue for resellers as they take advantage of the industry upturn and rebuild their organisations."
Vendors, distributors and third-party training firms are all keen to provide training to resellers, which can be valuable. "Vendors are looking for candidates for their training courses, and more accreditation often enhances the reseller's portfolio of potential clients," advises Anderson.
But resellers at the sharp end often prefer more practical approaches. "Product training is relatively straightforward, but developing business skills requires time on the job, typically shadowing an experienced consultant," says Dawkins.
Monkhouse says: "Training must be something that offers real value-add, and we find internal training by fellow staff often can be extremely beneficial."
Commission-based sales staff may need to be reassured that they won't lose income by spending a few days on a training course, or at least that their new skills will be more valuable than the commission they may lose.
One answer is online training. "E-learning is ideal for resellers because it can be conducted anytime, anywhere and courses are divided into bite-sized chunks," says Tracy Lowles, international channel marketing manager at open learning firm Thomson NETg.
"Used as part of a blended learning mix, reseller staff could begin a course in the classroom, continue via e-books and complete it on their laptop in their customer's cafeteria."
It is an appealing idea, but not all resellers find e-learning useful, especially for sales skills, which are often best learned and practised in the field. "We've found that online training is only helpful for general product training," says Dawkins.
And many e-learners fail to stay the course. "A study by Middlesex University claimed e-learning fails because students need continuous motivation to complete the course, but being busy professionals gets in the way, resulting in a high drop-out rate," says Rob Chapman, sales and marketing director at professional learning firm The Training Camp.
If resellers simply cannot recruit or develop the skills they need, they face a stark choice: seek outside help or lose business. Outsourcing is one solution.
"If a reseller doesn't intend to be an expert in a particular discipline, it should look to outsource this, whether to a vendor or a certified third party," says Dave Payette, director of channel strategy at comms vendor Avaya. "This helps to improve speed to market and deliver better value to customers."
However, finding effective contractors can be just as tough as finding good employees.
"The brutal reality is that consultants can sometimes be past their peak of motivation and effectiveness," says Lown.
"Worse, they often have a distorted view of their ability and so look for compensation which is disconnected from their contribution to the business. Consultants or full-time employees, the problem is still the same: there aren't enough good people out there."
Avaya (0800) 698 3619
Complete Learning (01926) 430 531
Concentrix (01509) 235 000
GE Access (01925) 661 705
Huthwaite International (01709) 710 081
Masterclass (01753) 676 666
Pipex (0870) 909 8000
Rackspace (020) 8750 2499
RAD (0118) 982 0900
Thomson NETg (020) 8994 4404
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