Share This:

One of the benefits of being a managed service provider (MSP) in a smaller market is that IT professional salaries, mainly due to the lower cost of living, tend to be lower than in places such as New York or San Francisco. However, a new report from Dice, an online platform for hiring IT professionals, finds the salary gap between IT professionals is starting to narrow regardless of location.

While the rate at which salaries are increasing has slowed during uncertain economic times, the report notes the top 25 cities for IT compensation boast an average salary of more than $100,000.

A major factor in this shift has been the simple fact that more organizations have in the last few years been willing to hire IT talent wherever they could be found. A recent analysis of software engineer hiring trends published by Hired, a platform for vetting job candidates, found that even today the percentage of active software engineering positions “open to remote” today stands at 69 percent, with the highest salaries for remote positions being paid, on average, by organizations in the San Francisco Bay Area ($180,000), Seattle ($175,000) and New York ($169,000).

Obviously, that kind of money can go a lot further in, for example, Wisconsin than it will in those cities. But if large organizations are paying that kind of money to hire technology talent, then the total cost of hiring IT professionals is going to rise everywhere. A wave of layoffs among some of the leading technology companies may increase the pool of available IT talent in the months ahead but there’s still plenty of organizations looking to hire IT professionals.

The only thing that might materially impact that demand is if the management of IT becomes more automated. Now, however, it appears IT environments are becoming more complex to manage at a faster rate than advances in automation are being made so for the next couple of years it doesn’t seem like IT salaries will significantly fall. Instead, it’s more likely the rate of growth will be somewhat mitigated.

Many savvy MSPs have come to this conclusion. These days it’s not uncommon for MSPs to have personnel located halfway around the world that cost less to hire and retain. There may always be a natural preference to hire IT professionals that can all commute every day to the same physical office but competition for talent is still intense. The downside of all those remote employees is that it is clearly more challenging to maintain an esprit de corps but the simple fact is that a lot of the best IT talent have little interest in spending time commuting back and forth to an office. All things being equal, many of them are going to opt to work for the highest bidder regardless of where the home office might happen to be located.

It’s a completely different world since the onslaught of the COVID-19 pandemic. Hiring norms will never be the same. The issue that MSPs need to come to terms with is to what degree are they now comfortable with operating as a “virtual entity” that at most may only require if any the smallest amount of office space possible.

Photo: Montri Thipsorn / Shutterstock

Share This:
Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

Leave a reply

Your email address will not be published. Required fields are marked *