Business

Economic Outlook: More Business Than Talent

As it’s sometimes said, “We’ve experienced the highest highs and the lowest lows.” Our industry, which is so closely linked to the construction industry, can certainly relate. Over the past decade, we’ve seen and endured some serious waves. The good news is, over the past few years, we have seen more stability, growth and opportunity. With construction continuing to stay at elevated levels, and technology spending becoming increasingly important for business’ digital transformation, there is a sustained opportunity for integrators to grow and thrive in these somewhat volatile—but nonetheless promising—economic times.

Each year, NSCA puts together business outlooks for its members. In our Electronic Systems Outlook reports, which are published twice a year, for example, we focus on reporting what’s happening in the construction trade, as well as in the markets that are most actively investing in technology.

As we continue to create these reports, we’ve noticed a pattern: Construction is by far the greatest leading indicator of success for NSCA members. When buildings are going up, there is a great need for integration solutions. Over the past five years, the economy has been delivering consistent growth in construction spending, alongside ongoing growth of our gross domestic product (GDP).

The construction industry has experienced a nice run. I hope, via your business results, that you’re finding our research coincides with overall market conditions. Of course, results vary based on many internal and external environmental factors. All in all, however, the business is out there.

One of the interesting findings in this year’s research is about the struggle our industry has had, and will continue to have, with talent acquisition. Based upon the continued growth of the industry, we’re facing a challenge in finding the right talent to take our businesses forward and deliver solutions to meet our customers’ evolving needs.

With unemployment rates at a very low level, but significant skills gaps in our industry, our research has made a strong connection: A potential pitfall is to fail to find enough quality in the workforce to grow with the construction trade while, at the same time, failing to prevent competition from poaching our best employees.

This excerpt from NSCA’s Electronic Systems Outlook Summer 2017 edition addresses that important topic:

“NSCA members are struggling to attract, onboard and retain employees at nearly every level. At the critical stage: qualified technical workers and sales professionals. The low unemployment rate makes it tough, especially when adjacent industries are reaching into our member companies to recruit their top talent. NSCA members that provide traditional AV systems, physical security, alarms and life-safety solutions at low margins are especially vulnerable; we are seeing dramatic compensation differences with building automation and control, MSPs, IT VARs, solutions providers and bundled-services providers. The higher billed rates have [caused] the adjacent industries’ competitors to drive up labor costs in businesses that have not prepared for the increases.

“NSCA is stepping up its efforts to assist members in understanding the transition to managed and value-added services as a way to combat low-margin business, and to be able to compete for top technical talent. Without question, talent management will be a top priority to address in finding growth opportunities.”

The forces of change, including new business models, along with difficulty finding, training and retaining top talent, appear to be a greater challenge for our industry than actually finding work.

I’m bullish enough to say that the companies in our industry successfully making the transformation to a services-based model (and staffing accordingly) are likely finding themselves in a very strong position right now. For integrators that have remained on the sidelines, however—those that have been slow to adapt to new business models, customer needs and employee skills requirements—the continued growth in construction might not be providing the same positive impact it once did.

The ability to shift from a capital expenditures (CapEx) business model to an operating expenses (OpEx) business model, while incorporating new offerings and services, is undoubtedly the key to maximizing the positive market forces that exist.

Here’s the good news: Our industry’s foundation is strong. Based upon our latest report’s data, we are positioned to see continued growth for the next five years—even longer, in fact. For our members, having the ability to change and adapt while finding and retaining the best talent will be the formula for business growth during these above-average economic times.

From where I sit, I hope to see our members take advantage of the opportunity by listening to the winds of change and becoming a firm that can serve the market’s need for technology (r)evolution.

If you’re struggling with talent acquisition and retention, NSCA has a series of tools and resources that can help:

  • IGNITE: We offer materials to help you recruit, attract and educate students on the commercial technology industry.
  • ESPA: Send new electronic systems technicians through a training program to develop skillsets and credentials necessary to enter the market.
  • Job Board: Advertise your open positions on an industry-specific job board and browse résumés of jobseekers.
  • Technical Assessment Tool: This is an online assessment to gauge the proficiency of technicians and installers before you hire them.
  • C-SIP Program (Certificate as a Systems Integration Professional): An online, at-your-own-pace training program that offers industry- and job-specific preparation for new employees.

To obtain a copy of the Electronic Systems Outlook Summer 2017 report, email me at cwilson@nsca.org.

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