IT and Business Insights for SMB Solution Providers

VARs Staff Up During Downturn

The phrase “in this difficult economy” is used so frequently these days that it has become a drinking game in some circles.  Count the number of times the phrase is used in your local evening newscast to see why it has become popular to raise a glass at every mention.

But not everyone is drowning their economic sorrows at the local pub.  Many in the Value Added Reseller (VAR) community are busy leveraging the downturn to attract top talent and grow their businesses.  “During a downturn is the right time to be aggressive,” said the president and CEO of a CompTIA member company who preferred to remain anonymous. “You can’t cut your way out of a recession.  We are going to increase our staff and aggressively go after more contracts.  This is the best time in 23 years to go out and staff up your company.”

With US unemployment rates hovering around 10 percent, hiring managers have an extraordinarily large pool of potential employees from which to draw.  “People are coming out of the woodwork because there has been so much workforce reduction,” said Mark Romanowski, Executive Vice President, ASI System Integration, Inc. “We have been successful finding really good quality people these days.”

Adding headcount isn’t the only way VARs are taking advantage of the available IT labor pool.  Some are using the opportunity to motivate or upgrade their staff while lowering labor costs.  “Make sure your sales people are motivated and make their quotas,” said Romanowski. “If they don’t, find out why, because you can’t afford to float them.  There are people available who are hungry.”

M. J. Shoer, President and Virtual CTO, Jenaly Technology Group, Inc. expressed a similar sentiment. “I have received several unsolicited resumes of very qualified people,” Shoer said.  “I expect more qualified individuals will be in the job market and that will allow for more selectivity and a reduction in salary costs for new hires.”

The apparent ease with which an incumbent IT worker can be displaced by a less expensive newcomer may seem harshly Darwinian, but the benefits of a career in IT necessitate such competition. In a 2007 survey, CompTIA found that IT workers tend to earn more than the average American: 58% report that their family income is greater than $75,000 per year, compared with about 30% for the population in general. And 35% of the IT workforce reports that its annual income is greater than $100,000 per year, compared to 18% for the general workforce.

The benefits of a career in IT go beyond salary.  According to a recent survey from Global Knowledge and TechRepublic, approximately 7 out of 10 IT professionals received an increase in base salary in the past 12 months despite recent economic pressures.  Further, nearly half (46%) of IT professionals received a bonus in the past 12 months and 36% anticipate that they will receive a bonus in 2009. In addition, IT professionals receive a variety of benefits including: 401K or retirement program (83%); insurance (77%); life insurance (70%); employer-paid training (55%); and profit sharing (23%).  Somewhat predictably, the survey also found that the vast majority of IT professionals are satisfied at work with 4 out of 10 being either ‘very’ or ‘extremely’ satisfied with their jobs.

Understandably, many have heeded the call of the IT profession.  In its May 2006 National Occupational Employment and Wage Estimates report, the U.S. Bureau of Labor Statistics (BLS) estimates that the number of American workers employed in computer-related jobs stood at around 2,969,000 but CompTIA believes the actual number to be closer to twelve million.  This is larger than the number of American adults classified by BLS as employed in farming, mining, and construction combined; and close to the number of adults classified by BLS as working in manufacturing or transportation.

With such a large pool of IT jobs and IT professionals to fill them, opportunities in the field may seem scarce.  “Not so,” said Richard J Rysiewicz, CompTIA’s Vice President of Industry Relations. “Even with the downturn all statistics suggest even entry level shortages in a few years as more people retire and there are less people entering the workforce in IT.”

Todd Thibodeaux, president and chief executive officer of CompTIA believes that during a difficult economy (drink!) is the ideal time to consider a career in IT.  “There are about 200,000 to 300,000 good-paying IT jobs available,” Thibodeaux said.  “We continue to hear from companies, whether they’re hospitals, universities or in IT, that they still can’t find highly-skilled, quality labor.”

“Highly-skilled and quality are the operative words here,” Thibodeaux added. CompTIA offers several certifications designed to demonstrate a candidate’s proficiency in a given area of IT.  Thibodeaux believes earning a certification is an excellent way for anyone to upgrade and demonstrate their IT skills.  “Even without a college degree, a CompTIA certification can open doors to entry level IT jobs and provide a leg up on the competition.”

Training and certification programs can indeed have a measurable impact on an IT career path, according to a recent study by Global Knowledge and TechRepublic.  According to the survey, 87% who have attended training claim they are more productive in their job role and 3 out of 4 IT professionals say that they’ve become more productive after receiving their certifications. Further, 64% stated that the training that they received had a measurable impact on their salary and 67% of hiring managers believe that certifications impact the salaries of potential employees.

Overall, VARs and the IT professionals they employ appear relatively well positioned to survive and even thrive in this difficult economy (drink!).  This is due in part to the flexibility of the business model and the fact that VARs are made up of people rather than technologies.  As a result, many VARs are looking to expand and upgrade their staff and their businesses.

“Like any situation, there is always opportunity if you look for it,” said Shoer.  “I think there is ample business out there, you just have to look for it a little more intently.  We are going to ramp up our marketing efforts as my impression is that our competitors and holding back or reducing theirs, so that is a definite opportunity.”


About the Author

With more than 2,000 members, 3,000 academic and training partners and tens of thousands of registered users spanning the entire information communications and technology (ICT) industry, CompTIA has become a leading voice for the technology ecosystem.

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