With the crunch on to hire qualified IT staff from an insufficient talent pool, businesses are increasingly turning to VARs and solution providers for help locating staff, and VARs are finding that it pays.
By some estimates, there as many as 10 IT openings for every qualified candidate, and businesses are climbing over each other to grab those candidates, analysts say.
“So, they’re turning to the same folks they trust for their hardware and software, their trusted advisor, and asking help me find someone,” said Joe Iovinelli, president of SmartSource, a Chicago-based IT staffing agency originally established to provide VARs with contract workers to fulfill projects. “They know VARs have their ear to the ground and know people.”
IT temping revenue is surging. Click here to read more.
SmartSource is taking 40 to 50 calls a month from VARs looking to help companies fill staffing holes, either permanently or on a contract-to-hire basis (typically 90 days), Iovinelli said.
For VARs, the trend presents an added service to offer, and potential revenue. Some see it as part of their duty to assist the client, but SmartSource recommends to the providers it works with that they charge customers 10 to 15 percent of a worker’s salary for permanent placements, 25 to 40 percent for contract-to-hire.
Click here to view exclusive channel research from Amazon Consulting.
“20 percent might equal $20,000,” Iovinelli said. “You’d have to sell a lot of hardware to see that kind of money.”
Demand for IT workers is at an all-time high and outpacing almost all other segments of the economy. IT employment grew by 5,300 workers in November, leading to a grand total of more than 3.5 million IT workers in the United States, according to a report by the NACCB (National Association of Computer Consultant Businesses), an IT staffing industry association in Alexandria, Va. IT employment is up more than 132,000, nearly 4 percent, since November 2005.
Unemployment rates in many IT occupations are among the lowest in the labor force, effectively achieving in many cases “Full Employment,” the report said.
As a result of the demand for IT workers, IT temporary staffing firms saw 13.7 percent median revenue increase in the third quarter of 2006 over the same period last year, according to a report by Staffing Industry Analysts, a contingent work force analyst firm.
VARs have an advantage over traditional staffing firms like SmartSource, which typically work through human resources departments or at best a CIO, while VARs have a direct line to engineers and administrators, Iovinelli said.