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Too expensive! Why the Dynamics sub-contract labour market is broken

Back in 2007 I was a seasoned AX pro at the top of my game.  After always being an employee, I decided to step away from employment with a Gold Partner and into the brave new world of contracting.  I was the only person I knew that was contracting in the Dynamics channel; the market was immature.  For me it was a stepping stone. I only ever worked four days at the start and invested my fifth day in to building my own clients, a website, meeting people and so on.  It was a slow burn.

Fast forward eleven years and I’m now trying to add new employees to my team.  Not contractors, employees.  People I can invest in long term.  It is, frankly, desperately hard work.  The balance of power has shifted.  Good people are out there, but the majority of good resources (come back to that in a moment) want to contract.

So despite my number one mantra about wanting FTE’s only, I now find myself paying a contractor to satisfy a need.  I hated signing the paperwork, and eight months on, part way through the third extension, it still doesn’t feel right.  But here’s the rub; the contractor is great, the client is happy, and we are making a margin. What’s not to like?

Well here is the challenge; how do we balance a need for contractors, and make no mistake there is one, with the absurd shift in power and rates over recent years? Too many agencies, typically one man bands created by ambitious 20-somethings seeing an expanding market, are perpetuating the myth that if you’ve got the word ‘Dynamics’ on your CV, you’re suddenly worth £500 a day. You are not. Too many consultants, that by any definition come under the heading ‘junior’ are lured by the pitch and are driving rates through the roof.

A recent case: I asked my go-to agency for a Finance consultant.  Classic profile, top of their game, hit the ground running kind of person.  He knew what I wanted.  One week later the CV count is zero. “How about if we remove the FTE restriction?”. Thirty minutes later I have four well qualified and credible CV’s to pursue on my desk.  It’s no reflection on the agency who are generally brilliant, but it is an interesting anecdote about the wider state of the market and how it has shifted.  One of those four became my first contractor, hence my dilemma.

Here is the nub of the problem: How can I invest in my practice, the skills, the learning, the methodologies, the infrastructure, the marketing, the sales pipeline, the career development, the culture and the whole customer/Microsoft relationship thing, if the very people at the pointy end of the delivery are only invested in one thing; themselves.

No offence intended to anyone, but look at it in general.  Sub-contractors may take pride in their work, may deliver a good job and may be ethical – that’s not the point.  The point is that they are not invested in the project, or their contract.  When the project is a bit late, everyone gets a 3 months extension.  Lovely, happy days.  Of course it’s not deliberate, but I don’t see anyone crying in their pretzels.  Where is the pain, the ownership? Worse still, when the good guys see a project going stale, who can blame them for moving on to more exciting things?  The project spirals.

We need contractors.  But we need contractors that are on their A game, experienced, that provide specialist niche skills, who probably have their own client base where they do repeated work based on good delivery and reputation.  That’s a good thing.  Most of the rest of the crop serve only to inflate an already expensive FTE market and undermine the investment that partners are making in their business.

We have a training and skill gap at the moment.  I’ve been involved in some working groups with Microsoft, learning and training providers, and other respected partners for a while on this point.  Everyone acknowledges the need for initiatives.  I could attract industry experts – say a ten year experienced financial controller from an SME – and offer them an attractive package to cross train to the art of consultancy.  I would not expect to gain too much revenue for 3-6 months, but that’s OK, I can budget around that.  I’ll send them on some product training, spread them around our projects with other consultants to gain exposure, perhaps ship them off to Seattle for a tech’ conference to soak up all things Microsoft, and invest my time to mentor them.  Somewhere in the 12-18 month window we get some return and look forward to a great career.  But all the time, there is a wolf at my door.  Agencies are constantly on at them to jump ship to the great world of contracting.  That very fact is a direct disincentive to making the investment in the first place.  Just at the time when partners need to invest in the talent pool, the incentive is being eroded, and the risk of not receiving a return on that investment is growing.  That is a problem.

I don’t have all the answers.  My one contractor is supplemented by twenty three brilliant employees that we invest in hard, and they reward us with loyalty and dedication.  Somehow we manage to buck the trend and hang onto them.  But attracting new talent is increasingly difficult.  The sub-market seems just too easy.  For example, there are incentives in the market to allow Joe Public to gain access to full Dynamics training materials in the hope that this lowers the barrier to entry.  What? If you work for a partner, there is no barrier, and I pay Microsoft  several thousand pounds a year for the privilege of access to those same resources.  Why are we making it easier to operate outside the sphere? To be a Gold competency partner (i.e. to operate with any credibility at all) I need multiple relevant certifications for multiple people, kept up to date. And pay my gold fee.  To operate in the sub-market you need……nothing. Where’s the balance in that?

Microsoft need to help the partners to help Microsoft.  Provide, at the right level, barriers or at least disincentives to work in the sub-market.  Provide incentives for partners to invest in new talent and technology.  Promote the benefits of working with partners, not building internal project teams.  I would credit Microsoft with pushing the Dynamics 365 world forward and giving us exciting technology to deliver great projects, but they know that they need capacity in the channel and I just don’t see the same level of effort going towards that endeavor as I do towards the open market.

While I’ve got a captive audience, let me do my bit to disincentivise those contemplating the sub-contract world.  If I save one life I’ll feel vindicated: No training, no sick pay, no culture, no benefits, no phone a friend, public liability insurance, indemnity insurance, IR35, find a good accountant, tax, short term, holiday cost is measured by lost earnings and not by Thomas Cook (ergo you never go), how will you train up to D365 from AX (not on my project please), 5 days a week – every week, crap agency doesn’t pay on time (I’ll be fair, most do, but do background checks carefully), chasing phantom fishing jobs, frustration with the project but no control or ownership……blimey.  Maybe I exaggerate to make the point, but the grass is not greener on the other side.  It’s sort of patchy, with weeds.