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6 threats for enterprise channels in 2013

Channelworld India staff | May 2, 2013
A weak economy is combining with a number of long-dormant issues to form a set of challenges partners needs to watch out for.

But that requires good salespeople and that's hard to find and retain.

Manpower Blues

The Threat: The poor quality of students being churned out by educational institutes. Employee poaching by solutions providers and vendors. And the inability of solution providers to ensure staff compensation keeps pace with rising cost of living.

Ask a partner for his deepest concern for the coming fiscal, and you won't have to wait long for an answer: A talent and manpower crunch. While these are, perhaps, age-old problems, they threaten to have greater ramifications for an already hard-pressed solution provider community. Though there are no studies to quantify how acute the problem is within the channel space, the average attrition rate in the industry is estimated at around 8 percent.

The source of the problem, say some providers, start with the educational institutes. "The quality of talent graduating from technical and management institutes has been declining steadily over the last few years. Earlier, the learning curve was around six months. Today, it's nothing less than a year," says Sumeet Prakash, director at Emarson Computers, which is based in New Delhi.

Once trained, these youngsters quickly become fodder for poaching by client companies and vendors. "Vendor poaching is a reality. So is peer poaching. We can't shy away from accepting that," says Raunaq Singh, director, Targus, adding that he doesn't see the cycle of pain ending any time soon.

Those who have tried to confront the poachers haven't really gotten anywhere. "Vendor poaching is quite relentless. Even if we attempt to take it up with them, it's a futile exercise," says Prakash. "Vendors either deny the whole thing or plead helplessness. We have to just accept these developments as an occupational hazard."

Prakash says that vendor poaching is more rampant among sales and marketing staffers and less among technical personnel--a consolation given the significant amounts of money spent on training and certification.

The fall out of this talent crunch and attrition are far-reaching. Many solution providers say they are unable to pull-off large, high-risk projects effectively because they don't have the talent. Then engagements suffer continuity issues when skilled personnel quit halfway through a project, leaving both solution providers and their customers high and dry.

A Forrester report also points out that solution providers cannot factor in these exigencies into the total cost of a project.

Key to retaining employees is compensation. "Retaining good talent at an affordable cost is always a challenge as the cost of living is going up, and we can't pass all of those costs to the end customer," says Shah from Orient Technologies. The company is a fast-growing solution provider based in Mumbai with a number of initiatives lined up. The biggest spoke in its wheel, says Shah, is the lack of talent.


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