The single biggest inhibitor of growth for most managed service providers is staffing. Without access to additional talent, MSPs not only find it challenging to extend the size and scope of the existing services they offer, it becomes next to impossible to add any additional services around an emerging technology.
A report published this week by CompTIA, the IT industry association, finds that four in ten U.S technology firms report they are actively recruiting job candidates for technical positions. The top three reasons these positions are open are attributed to expansion of the overall business (58 percent), need for IT professionals that are skilled in emerging technology (52 percent), and the need to replace workers that have left the company (43 percent).
The top five challenges filling those positions are finding IT professionals with the right skills, finding workers with the right “soft skills” to work with customers, competition for IT talent, salary expectations, and the limited pool of IT talent. Every IT services provider knows that any individual who has IT skills and can affably engage customers is worth their weight in gold.
Of course, hiring challenges can vary intensely by skills. According to statistics from the U.S. Department of Labor, the number of application developers in the U.S. has increased by 386,900 since the start of the decade, representing a 76 percent increase. The number of cybersecurity analysts has increased by 91 percent to 52,500. Given those amounts, it is little wonder why there are now millions of cybersecurity jobs going unfilled. In total, the U.S. Department of Labor says there are 1,185,600 IT professionals, a 44 percent increase since the start of the decade.
The competition factor
Competition for the talent is hardly limited to IT services providers. Organizations of all sizes are trying to staff internal IT teams. At the same time, IT vendors are looking to staff both professional services organizations and managed services teams. Competition for IT expertise is obviously fierce.
The one edge many IT services providers have been able to exploit is location. Most IT services today can be delivered independent of geography, because it is now a global business. For example, an IT professional making a six-figure salary while living in North Carolina can enjoy a much more comfortable lifestyle than a compatriot living in the San Francisco Bay area. Savvy MSPs establish strong ties with local schools to recruit top IT talent who rather stay near the communities where they grew up, rather than move far away. The same hiring principle applies to recruiting IT talent overseas, assuming language and time-zone issues are not a major concern.
How long the IT labor market will continue to be tight remains to be seen. Thanks to the rise of artificial intelligence (AI), advances in IT automation are being made at a fast pace. Those advances don’t completely eliminate the need for human IT professionals. Rather, they enable the existing IT staff to manage IT infrastructure and applications at a much greater level of scale, which serves to reduce the overall cost of labor of MSPs. Despite those advances, the cost of labor is likely to remain the single biggest expense MSPs incur through the first half of the next decade.
In the meantime, MSPs would be well-advised to focus on the soft benefits they provide the IT teams on which their business depends. Everything from ongoing training, to the number of days off provided makes a huge difference. There will always be some organization willing to pay skilled IT professionals more. The real challenge is finding a way that ensures IT professionals prefer to work for you more than anyone else.
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