The managed IT services market today is experiencing significant change. Businesses across all industries are becoming increasingly dependent on technology, and the skills gap in this industry continues to widen. What’s more, we’re beginning to see the potential for new legislation or policy that may impact how IT outsourcing services are delivered and consumed.
As these trends converge, MSPs must take a tactical approach to ensure that they’re aligning the right internal and external resources, putting the right processes in place and placing themselves on a path toward long-term success and stability.
Continuum CEO Michael George recently joined Joe Panettieri of ChannelE2E on a podcast to discuss these issues and offer a look at the direction this market is headed in. Here’s a quick look at one of the key themes and talking points from the episode.
IT Labor Challenges Within the MSP Market
It’s no secret that MSPs spend much of their time hiring, onboarding, training, and working to retain technical talent. These team members are qualified IT professionals with a variety of skillsets and experience, and their efforts are of course tied directly into the growth, efficiency and profitability of an MSP’s business.
Yet a growing skills gap in today’s labor force, complicated by emerging technologies like cloud, security and network engineering, has made it extremely difficult for service providers to afford and retain the talent that’s required to support the complex needs of the modern technology-dependent SMB.
“Labor is becoming the number one issue for these MSPs that are trying to build their businesses in a sustainable way,” said George. “There’s a fight for good technical talent… and it’s starting to reshape the way IT services are delivered.”
He added that there likely isn’t an MSP in the country who isn’t facing this challenge in their core business, and that today’s demand for technical specialists and high-end talent is greater than the available supply. The talent shortage, he notes, is partially driven by the fact that virtually every business today has a demand for IT—whereas several years ago, businesses in spaces like healthcare, legal and financial services were the primary drivers of SMB IT.
Taking a small, independent restaurant as an example, George noted that 22 percent of reservations today are being made via OpenTable. “If your system isn’t up and running, you’re losing 22 percent of your reservations for the day—and that can be the difference between being profitable or not that day,” he said. “The demand and the need for real, professional IT is growing across all industries and sectors.”
George and Panettieri then went on to discuss the impact that millennials are having throughout today’s workforce, and how a new generation of “born-in-the-cloud” employees and consumers continues to change expectations around “always-on” technology and the notion that things should simply work properly. Additionally, as this new workforce is drawn to the higher-end aspects of IT support and service delivery, there are fewer resources available to provide basic and entry-level IT support.
And as George put it, “to be a full-service IT provider, you can’t just do the strategic work. You have to provide the fundamentals and baseline work as well.”
Throughout the podcast, George and Panettieri also spent time discussing Continuum’s unique model and how it helps MSPs offset and overcome a number of these challenges by providing access to labor, technical support and services. The pair also discussed the potential impact that the Trump administration may have in the IT outsourcing market, as the potential for new legislation, taxes or other changes is discussed.
You can click here to listen to the full podcast on ChannelE2E!