Guest Column | March 16, 2023

How MSPs Can Help Businesses Overcome IT Talent Gap Challenges

By Pete Sorensen, ConnectWise


IT hiring challenges are becoming increasingly challenging as small to midsized businesses (SMBs) and organizations grapple with technical talent shortages and employee retention amidst the ever-evolving IT landscape. Exacerbating the problem is the well-documented IT Talent Gap that is causing extreme difficulty for organizations to fill these critical roles.

Recent research revealed that 73% of business leaders predict they will struggle to recruit data scientists or fill other open technology roles in 2022. In the SMB ecosystem, research also revealed that more than 40% of organizations have no internal IT staff, and most of these businesses have no more than one generalist on hand.

How SMBs Can Help Bridge The Talent Gap With MSPs

SMBs seek out managed service providers (MSPs) to help close the security skills gap; therefore, this presents a growing market opportunity for these partners to protect clients against the expanding threat landscape.

Approximately 59% of SMBs will outsource cybersecurity in the next five years. This is important for MSPs because most SMBs don’t necessarily know what the right solution is, and that presents an opportunity for MSPs to pivot and have those crucial conversations about cyber risk to help them solve the most relevant problem that would positively impact their business.

Likely, the SMB market doesn’t fully grasp the difference between legacy antivirus and endpoint detection and response (EDR). They are mostly concerned with their level of risk and that they can mitigate it. Potentially being the target of an attack in the next six months is worth talking about. The fact that SMBs are starting to listen and pay attention to what’s going on in the world is great for SMBs, but we still need to expand the conversation.

SMBs are starting to take responsibility for their own security. They know to protect the assets they care most about, they need to choose a provider to help them. Once MSPs understand what the conversation is, they can pass on that knowledge to their end clients. The SMB is looking for confidence in its MSP, and at the end of the day, it’s all about education.

This worldwide labor shortage is reaching all kinds of global businesses, regardless of size or location. Although these shortages are impacting the entire tech industry, specific sectors have been hit harder than others. Cloud technology experts, cybersecurity professionals, and IT generalists are all scarce in the current tech job market.

MSPs: Part Of The IT Talent Gap Equation

Recent research outlining SMB opportunities for MSPs revealed some startling stats and interesting findings:

  • Increasingly, MSPs are competing against global tech firms for talent, and about 20% of MSP providers said it’s a struggle to retain quality talent in the space.
  • Additionally, 25-30% of MSPs say they struggle to keep up with clients’ needs and expectations due to poor customer visibility.
  • MSPs occupy a unique space in the greater IT conversation. Many major firms rely on MSPs to avoid having to build out internal IT teams.

Even though it would appear there’s a lot of opportunity for MSPs, they’re still struggling with their own talent gap issues. As time goes on, MSPs are forced to go up against giant IT mega-firms for talent more and more. The work environment MSP staff are forced to operate in may also be contributing to this phenomenon.

A growing trend in the industry shows the productivity of MSP teams being undermined because of workplace tools. MSP employees either don’t have enough tools or don’t have access to the right ones. Fortunately, this trend is starting to pop up on MSPs’ radar. According to research, 30% of MSP professionals reported that they’re currently taking the necessary steps to prioritize improvements in their staff’s efficiency. This effort may help slow the exodus of employees from MSPs to the more prominent, corporate IT firms.

For MSPs, the IT talent gap is coming at a very critical time. Business owners are pushing their MSPs to provide a broader range of services since more of their customers use a mix of online and offline channels. Privacy, data security, and compliance needs are also forcing MSPs to increase or improve the cybersecurity services they offer.

How MSPs Can Begin To Tackle The IT Skills Gap

To tackle these issues, MSPs may be forced to look inward for productivity improvements. Managed service professionals may need to employ innovative tools like PSA (professional service automation) and RMM (remote monitoring and management) to improve and refine existing tech stacks. To improve productivity, it’s also prudent to constantly revisit and update best practices – both internally and for the industry at large.

A recent study suggested a sweet spot for the number of endpoints a single IT solutions provider (TSP) has to service - ideally keeping the number of terminals between 1,000 and 1,200 per technician. Another interesting insight is that the average TSP has a lot of room to grow in terms of productivity. On average, TSPs have 45 customers per technician, but this could go as high as 75 if the correct productivity regimens are in place. Cross-selling is a key factor here, allowing for more revenue without adding more endpoints.

These are just a handful of the possible solutions for MSPs and TSPs facing hiring and retention challenges during the current IT Skills Gap crisis. For more research findings and innovative solutions, view the full report here.

About The Author

Pete Sorensen serves as the Vice President of Strategic Initiatives at ConnectWise – the world's leading software company dedicated to the success of IT solutions providers (TSPs) through unmatched software, services, community, and marketplace of integrations. Pete joined ConnectWise in early 2018 and before that, he held several leadership positions during his 10-year tenure at DuPont Pioneer.