Why Good Techs Are So Hard to Find in Managed Services
Look in the mirror, MSPs. The problem may be you. Plus D&H’s trend-defying PC sales and strategic move into mid-market.
The tech industry unemployment rate here in the U.S. rose from 1.8% in July to 2.2% in September, according to CompTIA. That’s still a very low number, though, and well below the overall economy’s 3.8% rate last month. Kam Kaila, president of IT By Design, which among other things provides recruiting and outsourcing services to MSPs, sees no light at the end of that particular tunnel either for anyone in managed services struggling to fill open jobs.
“It’s a consistent problem,” she says. And while the torrent of money businesses are pouring into MSPs and the shortage of people qualified to support those businesses are big reasons why, Kaila believes there’s another, even more critical problem that MSPs need only look in the mirror to see.
Because it’s them.
“Our biggest challenge right now is leadership,” Kaila (pictured) says. “Every person deserves to be led well, and we as owners don’t get it.”
Their employees didn’t back in pre-pandemic times either, but they’ve figured it out, and in a seller’s market for labor they’re acting on that realization by walking out on poorly led employers.
“People don’t leave companies. They leave bad managers,” Kaila observes.
It’s no mystery why there are so many bad managers out there either, she continues. The same people regularly accumulating technical certifications almost never work on their management skills.
“We’re not teaching our leaders to be better leaders,” Kaila says. “We just haven’t put enough emphasis on it.”
There’s no shortage of places to learn about leadership, she adds. Classes designed specifically for MSPs are available from numerous organizations, including IT By Design itself. Further help became available two months ago in the form of a new book by Sunny Kaila (pictured right), Kam’s husband and IT By Design’s CEO. Called Talentpreneurship: How to Build a Healthy Business, Transform the People Around You, and Live the Life of Your Dreams, it encapsulates the techniques he believes bear primary responsibility for his company’s success.
“When I shifted my mindset from being tech-centric to people-centric, my business started growing 10x,” Kaila says. “You can’t grow to the scale that we’ve grown to until that investment is made.”
It’s a big, constant investment at IT By Design too, and not just in pay, perks, and performance reviews. Everyone at the company, including the Kailas, have four “life plans” for career, wellness, relationships, and legacy (as in what you leave behind after your life). “Then we work with the person to see where we can add value to them beyond compensation and benefits,” Kaila says.
Among many specific examples are the “Life By Design” webinars the company hosts Friday mornings at 7:30, in which everything from therapists and yoga instructors to financial advisors and marriage counselors offer guidance on leading happier, healthier lives.
“That’s an example of how you create a culture of really making a positive impact on that human being beyond the paycheck,” Kaila says.
Too much for you? Too touchy feely? Dismiss Kaila’s advice if you like, but people-centric leadership is why IT By Design has grown to over 600 employees in 20 years with zero debt and no outside ownership. How’s your business doing?
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Marketing matters in the labor hunt too
Poor leadership, Kam Kaila believes, is the biggest reason retaining employees is so hard in the channel. Inattention to marketing is arguably the biggest reason hiring employees is also challenging. MSPs spend at least some of their time and money generating sales leads, she notes. “We need to make just as much investment in trying to find the right talent.”
That starts with your website, Kaila continues, which if you’re like most of your peers probably tells a potential job candidate little to nothing about why they should work for you.
“What kind of a culture have we built? Do we have ESG statements on there? Are we diverse employers? Are we a fun community to work with?” Kaila asks. “Sometimes MSPs don’t do themselves justice because their websites are terrible.”
Restricting candidate searches to people in IT is another common error, she adds. “Sales and marketing people don’t have to know the channel,” she observes, and customer service reps in any vertical often have better people skills than the average help desk tech.
“Sometimes you’re going to find better people in different industries because they’ve been taught skill sets in those industries that we could actually learn from,” Kaila says.
And if all else fails, she humbly notes, recruiting and outsourcing firms like IT By Design are always happy to help not just with hiring but retention too.
“We can build a team for you that can work at nighttime and weekends when your team wants to go home and have dinner with their families,” Kaila says.
D&H is thinking bigger
Gartner offered an early look at IT spending in 2024 this week, and the news is pretty good. Sales will climb 8%, they’re predicting, versus this year’s projected 3.5% increase.
The news looks even better for hardware makers, though, who can look forward to a 4.8% rise. That’s less than 8%, obviously, but sure beats the 10% drop in device sales Gartner expects to record when the books close on 2023.
Not that we needed Gartner to tell us that the endpoint market in particular has been struggling. The big PC makers have been telling us themselves, as have distributors like Ingram Micro and TD SYNNEX. In fact, no one is happy about endpoint sales right now, it seems.
“D&H is actually up double digits in the last 18 months on the endpoint business,” says Marty Bauerlein (pictured). “We’ve obviously outpaced the market and we’re taking market share in several categories.”
Bauerlein views that accomplishment as one illustration of many ways the company’s getting measurable returns on significant investments that include adding 240 employees in the last two years.
“All of our businesses are growing right now, and we’ll grow the business this year over a billion dollars,” he says. To put that in context, Dan Schwab, one of D&H’s two presidents, told Channelholic a few months ago that revenue for the fiscal year ending this April would be about $5.5 billion.
Some of what’s fueling that momentum is relatively unsurprising. Though businesses are increasingly ordering remote workers back into the office, most are still allowing employees to spend some of the week offsite.
“This is the new normal,” says Jason Bystrak, D&H’s vice president of modern solutions. “That’s never going to go away.” Companies that know it are upgrading the software and hardware in their conference rooms to accommodate hybrid meetings. “You’ve got to be able to meet from anywhere and you’ve got to be inclusive of everybody,” Bystrak observes.
Some of where D&H’s growth is coming from is more surprising, however, for a distributor long associated solely with SMBs: mid-market buyers.
“We definitely see opportunities in that area,” Bauerlein says, adding that 50 of those 240 new employees have been mid-market salespeople. “Our identity has always been SMB, but our new identity is the go-to distributor for mid-market, cloud, SMB, and MSPs.”
That shift partly explains why D&H added Check Point to its line card last week and Extreme Networks this week. Both companies have a sizeable footprint in mid-market and see partnering with D&H as a means of adding recurring revenue in small, medium, and large businesses alike.
“Similar to a lot of the vendors that we support in modern solutions, they’re moving into a model to support MSPs and sell through that channel,” Bystrak says.
Additional vendors that have traditionally played upmarket of D&H will take similar interest in coming months, I suspect, as their move into managed services converges with D&H’s move into bigger end users.
Also worth noting
No link for this one, so you’ll have to trust me. Users of the Channel Program PRM solution we’ve written about before can now message all of their MSP contacts at once and promote upcoming events via a new widget on the NaviStack solution we’ve also written about before.
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