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Bleak Unemployment Numbers Spell Opportunity for VARs

With unemployment hitting 10.2 percent last week and a few other technology vendors announcing layoffs, the question arises of what exactly does this mean to solution provider community. Sister publication eWEEK says the unemployment picture for technology companies is shady, and that education and health services are the only categories showing any signs of positive […]

Written By: Jessica Davis

Nov 9, 2009

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With unemployment hitting 10.2 percent last week and a few other technology vendors announcing layoffs, the question arises of what exactly does this mean to solution provider community.

Sister publication eWEEK says the unemployment picture for technology companies is shady, and that education and health services are the only categories showing any signs of positive gains. Certainly, these are areas that many VARs are looking toward as they eye economic stimulus funds and technology spending for 2010, so a rise there could indicate something positive.

Previous reports from OnForce, the online technology services marketplace, have shown an increase in the number of applicants to become service providers in the marketplace, perhaps indicating that some of those who have been laid off are looking to apply their skills by hanging up their own solution provider shingle. That means solution providers are likely to be seeing more competition.

Meanwhile, payroll and HR services outsourcing giant ADP last week reported declines across the board in payrolls for the month of October. The firm reported that total employment declined by 203,000, while small business declined by 75,000 and medium business declined by 75,000. Larger business showed a smaller decline at 53,000.

In terms of business segmentation, ADP reported that the goods-producing sector saw a decline of 117,000 while the service-producing sector saw a decline of 86,000.

The firm points out that the health of the employment picture normally lags the general recovery from recession as firms wait to hire.

Such businesses could be looking to outsource some of their IT, and that could be a plus for savvy solution providers who approach the right companies at the right time with the right message.

And with more individuals out of work, it could also be an opportunity for solution providers to scout for the most promising employees. Some management experts recommend that firms always run advertising for open positions and always be conducting job interviews so that when positions do come open, the right replacement candidates are already lined up.

The net net? Today’s employment picture could mean IT outsourcing contract opportunities, a more competitive environment as more of the unemployed look to start their own firms, a richer field of potential employees, and the potential for greater spending in certain verticals such as education and health care.

Bleak Unemployment Numbers Spell Opportunity for VARs

Jessica Davis

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