Even as recent research suggests the outlook for MSPs includes opportunities and growth, recruitment and retention are challenges as they compete for talent with other vendors and organizations.

Businesses turn to managed service providers (MSPs) to augment their bench with technology talent. Still, MSPs are not immune to the challenges their clients face in finding and retaining the right people with in-demand IT skills.

But even as recent research suggests the outlook for MSPs includes opportunities and growth, recruitment and retention are challenges as they compete for talent with other vendors and organizations. Additionally, their success is tightly bound with employee well-being.

Recruiting Tech Talent Is Tough for all Businesses

Even if you’re not an MSP, several workplace trends are affecting IT staffing worldwide, according to a survey released earlier this year by Venquis, a global change and transformation staffing solutions company. It echoes a theme at the recent Channel Partners Expo & MSP Summit 2022: Reliance on technology has raised the role of the IT department and the CIO. This reliance has increased the pressure and stress on employees as the pandemic and the Great Resignation have exacerbated recruitment and retention challenges. However, there is an upside: The move to remote work means MSPs now have access to a greater pool of talent, although a hybrid environment is not without recruitment challenges.

Conducted in collaboration with market research firm Savanta, the survey found that increased dependence on technology during the COVID-19 pandemic raised the profile of IT departments in businesses. By spring 2022, senior technology decision-makers said the IT department had become more important to their business, with more than three-quarters reporting that awareness of the IT department had grown since the pandemic began. Meanwhile, two-thirds said that it had become more respected.

To no surprise, recruitment and retention are viewed as critical to success, and to keep top candidates interested, respondent companies are trying to keep their recruitment process as short as possible. They’re also citing an engaged and motivated workforce as being vital for success, and retention strategies are essential for delivering departmental objectives and reducing attrition.

Flexibility could also be seen as a double-edged sword for anyone hiring technology talent because it is an enticement—but it also makes it easier for employees to interview for other opportunities that no longer require uprooting themselves geographically. Of course, this means businesses have access to a greater pool of talent; 71% of IT decision-makers found that remote working and removing commuting constraints provide access to more talent than before, leading to 86% of businesses looking to hire staff to work remotely.

While businesses can turn to an MSP to take over some functions to bridge the staffing gap, MSPs are ultimately tapping into the same talent pool and grappling with recruitment and retention issues.

Employee Burnout Could Put a Damper on MSP Growth

The increased dependence on the IT department and the rise of the CIO have benefited MSPs, according to a survey just released by Barracuda of 500 global MSP decision-makers and knowledge workers. It predicts continual growth for managed services revenues, but MSPs must address employee well-being, which has been getting increased attention over the past two years.

More than three-quarters of those surveyed by Barracuda admit that significant or notable improvements are required in their organization when it comes to ensuring employee well-being, which could impact the end client. Concerns about employee burnout come at a time when customer expectations are rising. The report said it’s fair to assume that they expect the same level of service they got from their MSP during the height of the pandemic, even if replicating those types of rapid digital transformations and working environment transitions at all times is not possible nor necessary.

As much as bonuses and flexible schedules are crucial to attracting and retaining talent per the Venquis survey, the Barracuda report makes it clear that if MSPs hope to hit their growth targets, they must find a way to guarantee a higher level of employee well-being in their own organization. If staff aren’t able to decompress it will impact their performance and make it difficult for MSPs to adequately address other growing challenges such as security or hitting overall revenue targets, regardless of their recruitment and retention strategies.

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