9 Reasons Channel Manager Turnover Is Increasing9 Reasons Channel Manager Turnover Is Increasing

Macroeconomic trends, changes in compensation plans and private equity may all be putting channel managers on the job market.

Turnover is increasing for channel mangers, according to more than a dozen sources that spoke to Channel Futures about trends in the industry. The trend is apparent with a simple visit to LinkedIn, where channel managers announce that they've found work with a new employer after working less than two years at their previous company. Some leapt at a new opportunity, while others are moving on because they lost their jobs. For some industry insiders, the quickening pace of the revolving door reflects a mere seasonality stemming from macroeconomic conditions. For others, the turnover reflects the C-suite de-prioritizing the role of the channel manager.

“In the last few years, It really has become, 'Once we can milk the best partners out of them and get them locked into our product, we don't really need the channel manager anymore,'" said a channel leader, who asked to not be named.

This article is the first of a series on the state of channel managers in the advisory channel. Our focus is specifically on channel managers at vendor/supplier companies, rather than tech services distributors (TSDs), although TSD channel managers will receive some attention.

Related:9 Tech Advisor Channel Predictions for 2025: M&A Comes a-Callin'

This installment focuses on retention.

Reason No. 1: Career Mobility in the Modern Job Market

Craig Schlagbaum, managing partner at the consultancy Recurring Revenue Channels and the architect of multiple channel programs, said channel managers across the tech industry tend to be mobile in their careers. That's the case for channel managers even outside of the TSD world, he said. A two-to-three-year stint at a vendor is a common timeline, Schlagbaum said, although he noted that larger vendors tend to retain their channel managers for longer periods.

Recurring Revenue Channels' Craig Schlagbaum

He pointed to burgeoning "name, image and likeness" (NIL) rules in college sports that have led to an increasing amount of transfers by players.

"They're good at what they do, and their skills can be used by other vendors to do the same thing. So they want to play for a new team that pays them more money or gives them more opportunity," Schlagbaum told Channel Futures.

But channel managers moving to new pastures also reflects the larger reality of the business world, where job-hopping has become the norm. The Employee Benefit Research Institute concluded that 22% of workers spent a year or less at their companies in 2022, and that was the highest percentage since 2006.

Related:The 8 Habits of Successful Channel Managers

"People in the old days would work for a company for 20 or 30 years. That's just not the case anymore. There's too much change and not enough loyalty, so people don't remain loyal. They go for where the best opportunity and situation is for them," Schlagbaum said.

Reason No. 2: Finding the Right Fit in Channel Manager Jobs

Ty Smith worked as a channel manager before starting his own agency, Optical Diversity Telecom. He said the types of channel manager roles differ more widely than people interviewing for such a job might think. And some channel managers simply haven't found a position that matches their type of channel management style.

Optical Diversity Telecom's Ty Smith

"Some channel managers, depending on the supplier that they're under, are strictly told to recruit, recruit, recruit, recruit. And then some are basically glorified account managers where it's like, 'Hey, your job is to manage these partners and these accounts.' Some are largely told to sell. Some channel managers were out there selling just like direct sales people and spent more of their time doing that than actually building with partners," Smith told Channel Futures.

And that role might change in the middle of their tenure with their employer, which brings us to the third reason.

Related:The State of M&A: What Does Vendor Consolidation Mean for Partners?

Reason No. 3: Channel Leader Turnover

Schlagbaum said the channel chief role sees one of the highest attrition rates in the business world. Keeping up the sports metaphor, Schlagbaum said some channel managers may follow a channel leader from one company to another, just as college football players will transfer to where their coach went.

Or they leave because the dynamic has changed under the new leadership, Schlagbaum said.

"There's a new channel chief or a new CRO, and for whatever reason, the channel manager doesn't feel comfortable in that environment, or that leader wants to bring in their own team," he said.

AppDirect's Ashley Cole

Ashley Cole, who worked in channel management on the vendor side before recently moving to AppDirect, pointed to the maxim that people quit bosses rather than their jobs.

"I think that should be amended to, 'People don't quit their jobs; they quit their leadership.' Being in channel sales is hard. You can sell a deal one month that would retire your yearly quota, and the next month be faced with, 'What is your forecast for this month?' It's very much a 'What have you done for me lately' type position. Granted — that's the job: sales," Cole told Channel Futures.

Cole said businesses are putting more emphasis on culture. Those that do this well will listen deeply to their channel managers about their goals and challenges.

"A lot of companies are starting to focus on culture for a reason," said Cole. "Channel is not a 9-5 job. Most of the time, you see your colleagues and industry friends more than you see your family. With that comes an expectation of feeling valued and seen, while also having personal boundaries respected. So what does a 'good culture' look like to your sales org?"

Reason No. 4: Macroeconomic Consequences

Kameron Olsen, president of The Channel Advisors, runs a job board where employed and unemployed channel managers look for their next opportunity. He saw a noticeable downtick in the third quarter of 2024 as companies slashed channel manager roles and other staff. He pointed to trends outside of the industry, specifically the election.

“I think 2024 was a down-year for a lot of companies. It was a year where we had a presidential election, and I don't think a lot of companies make decisions on three-year SaaS and telco contracts in presidential election years," said Olsen, who who was as a partner at UCaaS provider YipTel for 12 years. "My guess is the channel was down, and everybody kind of had to right-size a little bit to be profitable.”

Olsen adds, however, that he sees hiring pick up.

The Channel Advisor's Kameron Olsen

"I also see a lot of suppliers coming into the channel looking for people," he told Channel Futures. "There's a whole new subset of suppliers who are trying to build out channel programs, and they don't know where to go to find those people.”

Reason No. 5: Ramps Have Dramatically Shortened

Multiple channel managers said they and their peers are getting less time to develop their funnel.

“You really don't see the ramps like you used to from a compensation perspective," a channel manager said. "It used to be, 'OK, we'll bring you on. We know it's gonna take a while to get you up and running, so we'll give you a six-month ramp.' Now, the ramp is like, nonexistent.”

For that channel manager, who worked at a cloud communications provider, the pressure was immediately on to fill funnel in the first 90 days.

Another channel manager, who asked not to be named, said the C-suite might view channel managers as less important because they don't always directly interface with end customers.

"The advocacy of the channel manager position goes up and down," they said. "Sometimes it's really strong; other times it gets diluted. Right now, it's a little bit diluted. Companies, while they believe in the channel, there's still this area of, 'Are we missing opportunities outside of the partner community? And should we look at putting focus into a direct sales force?'"

One channel leader said the actual compensation for channel managers may have changed to reflect this shift.

"I've seen an increasing number of comp plans push toward closed revenue rather than driving pipeline, even though channel managers rarely have any influence in actually closing deals," the person told Channel Futures. "Building a solid channel presence can take upward of 18 months, and enterprise sales cycles are at least six months. It doesn't add up. It's not sustainable."

That impatience can impact the larger channel program, Olsen said. And it's common for vendors to take this type of approach, he said.

“The companies are like, 'OK, we're going to build a channel. We're going to get these opportunities; let's hire channel managers,' and they think it's going to happen just as fast as a direct sales model, and it just doesn't. So organizations that don't understand the channel end up hiring people and firing way too quickly, and that devastates their channel program, because partners aren't loyal to a brand; they're loyal to a channel manager,” Olsen said.

Cole said runway is "a big grey area."

"On one hand, leadership can't appear to be favoring one rep over another, but I genuinely feel there is a lot that should be looked at to determine runway. Is there an existing selling base? What is that base selling at? Is the new channel manager an industry veteran with strong relationships, or are they green? Understanding the candidate and the territory expectations should identify the runway," Cole told Channel Futures. "I've heard some folks have (what I perceived as) a very gracious runway, while others are seemingly fed to the wolves on week two. I think the key to success here is making sure the new channel manager understands the ramp expectations before they are onboarded. There should be no surprises once the HR paperwork is complete."

Reason No. 6: Rising Quotas

In some cases, the success of channel programs has led to higher quotas for channel managers that they simply can't meet. Smith said he's seen quotas double. The channel leader may be setting this quota, but the quotas might also come from higher up the chain.

"For many of these roles, the quota is growing at a rate that's faster than the channel is growing. If the channel isn't doubling year over year, but your quota is doubling year over year, then sometimes that can have that impact," Smith told Channel Futures.

Reason No. 7: The Scrutinous Eye of Private Equity?

Gary Coben, who has helmed Evolve IP's channel program for almost 17 years, agreed that turnover has increased. He attributes part of this to "the enormous investment that private equity (PE) continues to make in our industry."

"The more they invest, the shorter the runway, and the increased pressure to perform. Of course, what PE misses and likely cares very little about is that our channel is a relationship-driven business, and relationships take time to develop," Coben told Channel Futures. "Conversely, the rapid change in technology, especially in IT and security, is bringing more buyers into our community at a faster pace. My guess is that’s what PE sees; hence, the pressure to perform quickly. I would not expect this trend to change in the near future."

Evolve IP's Gary Coben

One anonymous channel manager agreed.

“I truly believe that private equity is destroying what I think is a relationship business, because the nature of private equity is not relationship; it's margins," they said. "And I think that that hurts a lot of people.”

There may be two extremes that new PE investors and old school channel people occupy. The latter may enter the space and deny that the channel is a relationship-focused business. Some of these investors have sought to strike up new contracts with TSDs upon buying vendors, and these contracts may be remarkably unfriendly to the channel. These investors ultimately pay the price when channel partners vote with their feet and ditch the vendor.

On the other hand, the notion that the channel is all about relationships might miss the full picture, one source close to private equity told Channel Futures. This is the idea that the channel is only about relationships. If vendors are winning channel business solely because of existing relationships between channel managers and partners, what does that say about the value of the vendor's product? On some level, there must be something about the vendor's product or services that must motivate the advisor to recommend it. If that's the dynamic, then the best channel managers do more than bring a relationship. They help the partner navigate the ecosystem of the vendor they work for, guiding them from quote-to-cash and advocating for them.

Reason No. 8: Old Paradigms Breaking Down

Ronnell Richards, who's trying to tackle gaps in channel manager training with a new course, said many channel managers get hired because the vendor likes the Rolodex of partners with whom they claim to have relationships. However, many of those partners are aging out of the industry or selling their businesses. Or they simply might not be as willing to add a new vendor as the channel manager says they will be. Even if a partner is friends with a channel manager, that doesn't translate to new business.

Richards said not enough channel managers are "truly involved" in the partners' business. Think of it like a non-payroll consultant who can help partners navigate tools, discuss strategy and conduct in-depth QBRs, Richards said.

Ronnell Richards

When Richards was running an agency, he would ask channel managers to "get in the boat" with him. And while channel managers agreed to do this, they fundamentally didn't understand what he needed.

"For them, getting in the boat meant that they're taking me to dinners and giving me tickets to basketball games and things like that," Richards told Channel Futures. "But they were not understanding that I needed a true business partner. I need someone that can help me with creating a database. I need someone that can help me with best practices."

Reason No. 9: More Vendors, Same Channel Manager Pool

Olsen said his job board is seeing more and more new vendors enter the TSD channel. These suppliers are eager to land channel managers who know the space well and can introduce them to partners.

Smith said the advisor channel remains insulated to potential new channel managers. Search YouTube for how to be an account executive, and you'll find thousands of videos. But search "channel manager," and you'll get crickets, Smith said.

"A lot of people can't apply for these roles because they don't really know the channel is. Because there's a small pool of people that understand what the channel is, you now have recycled channel managers over and over, whether they've hit quota or not, who can jump into role after role after role," Smith said. "And then the other piece is competitor-poaching. There's a large amount of social activities with channel managers and channel directors and channel chiefs at these events. There are many of these companies that do want a channel manager that has inside knowledge on the competitor to come over to their side and vice versa."

Smith said people should be able to learn about what a channel manager is in university, rather than learning about it mid-career.

"A bigger pool will prevent people from jumping from role to role and actually give channel managers more competition," he said. "Because if they know that there are a lot of other people that can potentially do this role, now channel managers are going to strive to be a little better than what they are currently. "