Staffing an MSP is hard. You need a winning strategy. Unemployment has reached new lows in the past year. The pandemic we have experienced has driven many people out of the market, leaving a significant amount of jobs unfilled. While the most apparent holes are in the local restaurants, hospitality, and retail; IT services companies have been hit just as hard. Now more than ever you need a staffing strategy.
Everyone wants to find talented people that are willing to work hard, but as unemployment drops, salaries increase. It is a basic economic supply and demand situation. There are less employees so companies raise the amount they are willing to pay to get the talent they need, often pulling that talent from another company that now has to go do the same thing to staff the gap left in their team. This increase in salaries leads to increases in pricing (inflation) as we have clearly seen in the last two years. So how does the Managed Service Provider (MSP) deal with this unprecedented environment?
The first thing you need to do is understand what a winning strategy looks like when staffing an MSP. High maturity MSP’s typically pay just below market pay (on average) compared to other enterprise IT roles within other markets. This helps to keep their cost of salaries from eating all the margins. While you should have a mature price management strategy to ensure customers are paying more each year (to keep up with costs), this can be challenging in fast changing economies as salaries go up faster than clients renew their agreements. The best-in-class MSP’s manage this risk with a staffing strategy that brings in the majority of new staff at the bottom and effectively trains and mentors them to grow within the organization.
Your staffing strategy should be long-term. You may be screaming for help now and want to higher the top tier talent to “plug the holes in the ship,” but until you create a long-term strategy for staffing your situation will not improve. Your strategy must meet the demands of your current situation, but over a long term. Those demands include lowering staffing costs on average while finding a pool of talent that is not currently being pursued.
Career Pathing as Strategy
Read any HR website like SHRM for any length of time and you will find articles on career pathing. This is the idea of outlining for employees what their “path” within your organization looks like over a period of years. Despite where an employee might start, good managers will have a way to outline their opportunities available to them as they grow. If an employee can see where their hard work leads and the opportunity that is available for them to grow, they will stay longer and be more engaged.
So how do we use career pathing to meet the demands of our staffing strategy? It may seem simple, but you need to align your need for talent with what is available in the marketplace. If highly talented technical staff is at a premium, then you need to design a system where entry level talent can be brought in and trained to move up in your organization (via career pathing.) This will provide a valuable service to the entry level employees (by providing a career path) while providing you with an unlimited pool of candidates you can obtain at lower than market rates.
Staffing in Action
To make this strategy a reality you will need to do some prep work. First, make sure you have a good list of job descriptions that describe the roles in your organization. This documentation should include job roles, responsibilities, measurables, as well as possible career paths for candidates. Using these descriptions, identify the paths or levels within your organization. Which ones can be filled by entry level staff? For an MSP this can be computer setups, quick fix tickets, customer service, etc. These roles should be highly process oriented and documented well so employees have a greater chance of success. Once you identify that entry level role it becomes a feeder for other roles.
Next, develop training plans that will help entry level staff to move from one position to the other. What skills may be required for the next level position? How can you provide training to accelerate their growth? Identify expected timelines for candidates to move from level to level and ensure training programs are engineered to meet those timelines. This may not fill your higher-level roles within months, but done correctly, you will create a system that is always feeding you talent from within your organization.
Remember, your teams cannot be successful in ambiguity, much less entry level employees. Our friends at Helix Sales Development had some good advice in a recent blog of theirs titled Sales Culture. The Invisible Hand of Transformation. While directed at sales, the advice is good for all change within the organization.
Leadership teams can increase their odds of success in a sales organization by focusing on three measures. 1. Connect the culture change to the business activity. 2. Assume nothing. Translate the change to the specific behaviors for each role. 3. Create the plan, but expect to iterate.
After implementing a winning strategy, you will find employees are happier, more fulfilled in their roles and highly engaged. Additionally, you will have a set of entry level folks ready to move into level 1 positions, and a group of employees in level 1 positions ready to move into level 2 positions and so on. While not every position can be filled internally (like C-level roles), you will find more than 70%-80% of your positions can be filled internally. Through the use of hiring outside of market to fill entry level roles and the application of career pathing and proper training, your strategy will make you the envy of the MSP’s in your market.
Staffing is hard and hopefully this advice gets you on the right track. If you need further assistance, reach out to us at RedVine Operations and we can assist.