Spoiler Alert! It’s a candidate’s market in the office technology dealer channel.
It’s pretty much a given that entrepreneurs running office technology dealerships like to be in control—and office technology dealers thrive by being in control. Unfortunately, there’s an important segment of the business today that’s outside of their control: hiring and recruiting.
What used to be an Olympic-sized candidate pool has become more like a wading pool. Candidates have choices while employers do not, according to Paul Schwartz, president of Copier Careers®, a recruiting firm serving the office technology industry. There are a few reasons for this situation. Let’s examine five of them and an ongoing misconception.
- Generational Turnover – Most office technology dealers have employees within a few years of retirement or who could retire at any time. “We are talking to employers all the time who are constantly telling us they’re very concerned about the aging of their workforce,” observed Schwartz, who shared a recent conversation with an employer. “He told us that almost 80% of his field service force was over age 50, and 60% were over 60. They have an issue because a large percentage of their people are retiring in the next year or two or three years, and they haven’t done any planning for the future.”
- A Dearth of Young People Entering the Industry – There’s only a trickle of young people looking to join the industry. Perception may be one legitimate reason, especially with potential employers who are less solutions-oriented and more focused on legacy devices like copiers. How attractive is a copier company to a young, tech-savvy job seeker? Because of this, dealers must do a better job of positioning their organizations as technology companies.
- Low Unemployment – Unemployment in the United States is currently under 4%, which is considered zero unemployment. According to Jenna Humbert, senior regional recruiter at Copier Careers®, the percentage is likely less than that in the office technology channel. “How often do we run into, as recruiters, someone unemployed in the channel?” she asked rhetorically. “It rarely happens. Those people are reabsorbed back into the channel, and it doesn’t seem to make much of a difference from the numbers side.”
- Wage Inflation – “Everyone’s very aware of inflation, but there’s been significant wage inflation too,” opined Copier Careers’ Senior Vice President Jessica Crowley. “Everything is just costing more. So, that’s a challenge for dealers and OEMs to deal with because they tend to have a lot of people that they employ, and they pay them a set compensation. Now, they want to bring new people in, and they’re most likely going to have to pay them more.”
- Competition from Outside the Industry – IT and medical technology companies are poaching employees from the office technology industry, particularly on the services side. And in sales, the entire employment market is a sales rep’s proverbial oyster.
Time to Be Competitive
The recruiters at Copier Careers firmly believe that the time is now for salaries to become more competitive. “Generally, a comp package from four years ago or three years ago is not going to cut it right now,” said Humbert. “There are too many other industries and opportunities for these people, or they can go to a competitor.”
Because of this shift toward a candidate’s market, office technology dealers must be willing to invest in their businesses. Rethinking compensation is a big part of that investment, particularly with inflation, which, in turn, has led to wage inflation. “Two years ago, I don’t think anyone budgeted for wage inflation,” observed Schwartz. “This came out of nowhere. But this year, hopefully, they are budgeting for it.”
The Big Misconception
Competitive compensation packages aside, the best thing that can happen to an office technology dealership looking to bolster its ranks is when a competitor is acquired or when an OEM downsizes its workforce, right? Wrong!
One might think this scenario would be a boon to the candidate pool, but the recruiters at Copier Careers® have found that it has virtually no impact. Yet, it’s a situation that plays out repeatedly with Copier Careers’ clients who have high hopes when they read the industry headlines and then assume that a wealth of candidates is now available.
This attitude, according to Crowley, goes back at least to the Ricoh-IKON merger of 2008. “After the merger was finalized, there were a lot of reorganizational moves and layoffs on the branch level. In 2011–12, it was affecting a severe amount of people,” she said. “And it was great to have conversations with those candidates.”
Meanwhile, office technology dealers thought there would be a lot of low-hanging fruit to pick from, but that wasn’t the case. “I don’t want to come across as if those candidates weren’t worth talking to, but this has been going on for years, affecting the mindset that there are so many candidates available,” emphasized Crowley.
“We’ve seen this before,” concurred Schwartz. “When they pick up on social media that something has happened, all of a sudden, our phone lights up with, ‘Well, the panacea is here,” he said.
“We’ve been through this, God knows how many times, and it is never the panacea. I can go back to when Danka laid off people, and there was still a shortage. Or look at Xerox, they’re reorganizing and reducing their workforce again now, but it’s a ripple in this river of employment needs for dealers. Jess is one hundred percent right—the first people to be laid off are the easiest choices for those large corporations. There are always exceptions, but they are usually not suited to key roles in very lean organizations.”
“Even for candidates who will transition well to an independent dealer, time is still a factor,” said Crowley. “If you’re laid off yesterday, you’re not necessarily ready or able to start a new job tomorrow. Their severance may come with restrictions on where and when they can find another industry role.”
“It’s honestly very rare to place someone from one of these big layoffs… at least right away,” Humbert added.
People Who Need People in the Office Technology Industry
Barbra Streisand was wrong. People who need people are not the luckiest people in the world—at least in the office technology industry. It doesn’t matter if the office technology dealer has the best territory, products, or funding. Without people to sell, service, or administer their business, success will remain elusive.
“This should be sounding alarm bells and triggering decisive action,” said Schwartz about the employment shortage. “If you do not adapt and plan, your company will not survive. And we are not seeing enough movement on this.”
Ultimately, Schwartz views what’s taking place as another evolution of the office technology industry. “Ten, 12 years ago, there was this big debate: Do we evolve into a solutions provider or stay a box seller? And we now know the answer. You evolve into a solutions provider because the box seller isn’t going to survive. It’s the same with the workforce. If office technology dealers don’t evolve their workforce, they won’t survive. We’re at another one of those breaking points in the industry. You have to adapt, or you’ll get run over.”
*Copier Careers is a registered trademark wholly owned by Schwartz and Co., LLC
**Copier Careers Insights is a service mark wholly owned by Schwartz and Co., LLC
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