IT Service Space Experiences Paradox: Partners Hire Amid Vendor Layoffs, Productivity Dip Stirs Alarm Yet Skills Shortage Looms Larger

I spotted an analysis of the disparate results in the IT service space.

While vendors are doing layoffs, partners are hiring.   An April Canalys quick poll showed that 59% of channel partners are adding headcount in 2023. At the same time, 36% of partners expect revenue growth of more than 10% this year.

That isn’t going to be easy.  More than three-quarters of IT organizations are reporting difficulty finding talent with the right skills, and half are now training and upskilling their current workforce to address their challenges, according to a June 8 report from Experis, an IT professional resourcing firm.

And on top of that, in looking at the Q1 2023 Labor Productivity Data from the Bureau of Labor Statistics… there’s a dip in productivity.   Since Q1 2022, that number dropped, and it’s remained more level… admittedly, right at Q2 2020 numbers.   

I saw many headlines freaking out about that productivity dip.  When you look at the data,  this isn’t a constant growth – it surges, dips, and drops periodically.    It dips in recessions – and it dips outside of them too.    I wouldn’t overthink this at all.  I would focus on the staffing problems.    IT providers are looking for people, and technical skills are in high demand.    I just spoke with Peter Kujawa from Service Leadership on this topic – interview posting soon – but a critical insight here was leveraging less expensive resources in the right roles.    Take heed.