5 Ways to Overcome MSP Labor Resource Challenges

This blog is the first of a two-part series that addresses MSP resource challenges.

From quiet quitting and skilled staffing shortages, managed services providers continue to battle a slew of economic, market and availability problems. With financial and industry experts predicting that most of those existing challenges (and likely a few new ones) will continue for the foreseeable future, MSPs may need to change their game plans in 2023.

That process begins with assessing the largest risks and potential points of failure. What realistic challenges could keep an MSP from achieving its annual business goals? Discounting the far-fetched possibilities such as meteors falling from the sky or businesses no longer being interested in IT, technology business owners must have a firm grasp of things that could derail their plans. MSPs don’t need an MBA or an economics degree to listen to industry podcasts, read financial expert blogs or attend channel events.

Each of those forums can provide IT business owners with the insight they need to build optimistic growth plans while considering worst-case scenarios. When developing strategies with actionable steps, there should always be contingency options so the company can change course when conditions shift.

Identifying those potential circumstances is a serious responsibility for any business owner. However, with the rapid changes in the IT services community, from technological advances and evolving work from home (WFH)/hybrid work environments to the effects of a potential recession on SMB clients, those obligations can be even more complicated. MSPs have to strike a balance in their business plans. What could logically keep them from achieving reasonable sales, profitability, growth and other goals in 2023?

Overcoming the People Shortage   

Two of the most critical elements of an MSP’s operations are people and portfolios. Skilled personnel are needed to help construct, implement and manage clients’ IT systems, with other professionals developing leads, closing new contracts, and handling billing, collections and other critical business processes. While tools and automation can lessen those workloads, MSPs must still expand their staff over time to successfully scale their operations.   

As 2023 gets underway, the ongoing shortage of people who are ready, willing and able to fill key roles in an IT services business shows no signs of resolution. MSPs must take a different approach to recruitment, hiring, and retention to staff for growth in the new year. While working in an IT services and support business can be difficult, managers are more likely to meet their staffing needs by offering engaging opportunities with attractive salaries and benefits in an appealing work environment.

Money is important, and MSPs often compete with larger companies with deeper pockets to land quality talent. However, the priorities of Gen Z and millennials are changing, and most are looking for a better work/life balance than previous generations, according to a recent Deloitte survey. Flextime and WFH options can draw more interest than the promise of long hours on the phone in a sterile office space.   

Invest in People and Development

The larger issue for many MSPs is how to find quality talent. Not necessarily the 10-year veteran IT professionals with dozens of certifications who can work independently (a great find if there’s room in the budget), but a mix of high-potential but less experienced candidates and novices. Those “diamonds in the rough” offer promise to IT services companies looking to thrive in the current environment.

But how can budget-conscious MSPs attract that type of talent? Here are a few best practices:      

  1. Develop internship and mentoring programs.
    One of the most effective ways to instill core skills and business values in a work team is to build it from the ground up. Many MSPs work with local high schools, vocational academies and colleges to identify high-potential students interested in pursuing high-tech careers and create programs to boost their abilities. From part-time entry-level after-school jobs and post-graduate “trial” positions to mentoring sessions with IT business owners and technicians, providing paid or free opportunities and guidance helps providers discover and hopefully retain potential talent.           
  1. Revise salaries and benefits.
    While money isn’t everything, most IT professionals expect to receive fair payment for the services they deliver. Are company salaries competitive with not just similar MSPs but other businesses that are recruiting high-tech workers? With WFH options, that list is virtually endless today, but conducting informal surveys of local wages for key positions—from office managers to help desk technicians—helps owners benchmark and adjust their own rates. Many MSPs pay a premium for critical IT positions to attract and retain the best talent.       
  1. Partner with peers.
    MSPs are masters of leveraging strategic relationships; through those alliances, providers can optimize the use of their most valued resources—including people. Scores of IT businesses collaborate with peers to provide their respective clients with specialized and remote support. Those alliances give MSPs the ability to tap into other providers’ resources to scale services when demand exceeds capacity. The list of peer groups is lengthy, including Ingram Micro’s Trust X Alliance, TD SYNNEX’s CommunitySolv, the ASCII Group, the Tech Tribe, MSP-Ignite, TruMethods, Taylor Business Groups, IT Nation Evolve (formerly HTG Peer Groups) and The 20.  
  1. Consider staffing agencies and alternate options.
    Several well-known firms specifically help IT services companies locate and hire quality talent. For example, IT By Design and VAR Staffing leverage specialized candidate databases, job boards, and algorithm searches to help MSPs find suitable prospects. While local agencies may offer similar services, their inventory of skilled applicants and understanding of the employment requirements of IT services companies may be less robust.   
  1. Leverage vendor and distributor resources.
    MSPs often overlook some of the most cost-effective ways to scale their businesses and exponentially increase their support capabilities. Vendors make huge investments in their partner programs, and many offer white-label help desk, sales and even marketing resources to IT services firms. Distributors take that to another level, providing even more comprehensive support and programs to assist global partners. MSPs can leverage those resources to fill gaps in their own operations—from sales engineers and high-level cybersecurity professionals to 24/7 help desk support. Most come at minimal, if any, cost to partners.     

Turn Challenges Into Opportunities

Dealing with today’s biggest issues doesn’t have to be a negative for MSPs. From “quiet quitting” and “the great resignation” to other business disruptions, with the right plan providers can minimize the problems while finding new ways to support their clients.

SMBs need more help than ever to work through all the challenges that come their way in today’s global environment. How can they do more with less help? While MSPs may not have answers to all of those questions, most providers will need to reassess and realign their business models to meet growth plans and address their clients’ critical support needs.

Automation is the key to efficiency, especially when faced with skilled labor challenges. MSPs should employ as many time-saving tools as possible to remove manual tasks from its workforce. For example, integrating and automating the collections process with a PSA, accounting package, quoting tool, and secure payment platform frees team members to focus on more important aspects of their jobs.

ConnectBooster connects your CRM/PSA with your accounting software so you save time on bookkeeping, eliminate double-data entry, and reduce human-error. Plus, you’ll reclaim your time. After adopting ConnectBooster, most MSPs report saving 8-20 hours per month previously spent on manual billing-related tasks. Schedule a ConnectBooster demo to see how your MSP can save time and resources.


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