A survey of over 200 enterprise chief information officers (CIOs) conducted by the Futurum Group finds nearly three quarters (72 percent) of IT leaders identify talent acquisition and retention as the top challenge, followed by cybersecurity (49 percent) in a distant second place.
However, when it comes to strategic investment priorities, the survey finds cybersecurity tops the list (81 percent), followed by digital transformation (66 percent) and emerging technologies (63 percent).
MSPs step in to bridge IT talent gaps
Managed services providers (MSPs) are, of course, struggling with many of the same issues. In theory, this may be the easiest time in memory to find IT talent. According to Layoffs.fyi, nearly 89,000 employees have been laid off from 199 companies so far this year. If all the technical talent shed by the Federal government is added in, there should be plenty of potential candidates. The trouble is there is usually a mismatch between the skills being sought and the pool of candidates applying. Many organizations will shy away from job candidates that might require too much time and effort to train before they will become productive members of an IT team.
As a result, there is an opportunity for MSPs to fill that gap. A new managed service offering from Logicalis, for example, provides a more flexible alternative that enables organizations to address a range of urgent IT challenges, including staff shortages, emergency response needs, project backlogs, risk management, and stalled digital initiatives. The overall goal is to provide a reliable option for addressing skills issues without necessarily requiring organizations to sign up for a more comprehensive professional services engagement.
Balancing training, demand, and margins
The challenge is aligning investments in skills training where there is enough demand for that expertise. The more emerging a technology is, the greater the chance there will be a chronic skills shortage. If a technology remains on the bleeding edge, organizations often hesitate to invest in training due to limited demand. Every minute an MSP team member spends training takes them away from serving existing customers. Conversely, however, as technology products find more mainstream adoption, it’s only a matter of time before competition from rivals turns any managed service built around them into a lower-margin commodity.
Ultimately, MSPs need to strike a balance. There are some commodity services that they are going to be required to deliver just to attain the contract. The issue then becomes finding a way to add additional higher-margin services that organizations are actually going to want to consume. For example, Kubernetes skills remain in short supply. However, only a limited number of high-end enterprises deploy these clusters, where large MSPs already compete aggressively.
There is, of course, no substitute for joint planning with customers. Only then are MSPs going to have a sense of what skills they need to invest in to achieve and maintain a balanced portfolio. MSPs should review their portfolios to avoid overdependence on commodity services. While these offerings may boost revenue, they often hurt profitability.
Photo: luchunyu / Shutterstock
