It’s expected that by 2025, more than 60%1 of organizations will depend on MSPs for their operations and security.
Since managed service providers are being used more, they are feeling the pressure. In the IT department, for instance, 27%2 of all companies – including MSPs – had a skills gap in 2022.
The major implication of a managed services provider lacking tech skills support is a struggle to effectively help their clients manage their business’s objectives. But there’s more to this than meets the eye.
In this article, we will:
- Conduct a skills gap analysis to explain why a talent gap exists
- Explain in more detail its implications
- Offer 3 best practices for MSP to mitigate this challenge
Why are managed service providers facing skills gaps?
There’s a general shortage of IT professionals.
In the US, for example, there are +8,8003 cybersecurity professionals working, but only +20,000 available in the 15 states that need them the most.
Reasons for this disparity include:
1. High rate of technological advancement
One reason for this disparity is the rapid rate of technological advancement. Technologies like AI, IoT, and cybersecurity are growing faster than the number of specialists in those fields (Figure 1).
2. Education system’s failure
Another reason is the education system’s failure to keep up with the evolving demands of the IT industry.
We look at the US again: 6814 universities offer computer science as a major, compared to 995 offering a traditional major like accounting.
3. Aging workforce
The average IT professional is 42 years old5. As more of the current workforce retires, there’s a loss of valuable knowledge and expertise that cannot easily or quickly be replaced.
4. Lack of diversity
The IT sector is male-dominated (77% vs. 23%6). The underrepresentation of certain groups, such as women and minorities, means many organizations, like MSPs, will miss out on potential skilled professionals.
5. Global competition
If we look at the US job market of IT personnel as a representation of the global labor market, we can see how companies worldwide are competing for a limited pool of skilled IT workers.
For instance, 78%7 of IT organizations worldwide report difficulty finding and retaining talent.
How will MSPs suffer from low tech skills support?
MSPs with skills shortages would face the following complications. Note that these symptoms are similar for any company in any sector that lacks sufficient talent.
1. Decreased efficiency
MSPs lean heavily on the technical expertise of their workers to satisfy their clients and customers’ essential needs. Service providers with a talent gap could face delays, errors, and inefficiencies when resolving client issues.
This can lower their satisfaction and discourage them from staying on.
2. Increased costs
If a service provider lacks the skills needed to operate, it will need to hire more staff or outsource tasks to compensate.
This will increase the operational costs, impacting profitability.
3. Limited service offerings
With MSPs facing skills gaps, they will be hindered from offering a wide range of services or adopting new, everyday technology for addressing their business needs.
This reduces their competitiveness and restricts their growth potential.
4. Reputation damage
Failing to meet clients’ business goals due to skills shortage, MSPs will suffer from negative word-of-mouth and online reviews, falling down the pecking order.
5. Difficulty adapting to industry changes
The technology landscape is constantly evolving. More than half (54%8) of all employees were deemed to need “significant” re-skilling by 2022. And IT executives saw talent shortage as the biggest barrier to the adoption of 64%9 of the emerging technologies.
If business leaders do not re-skill and up-skill their employees to bridge the skills gaps, they will have difficulty maintaining their competitiveness.
What are the best practices for MSPs to bridge the skills gaps?
1. Leverage automation and emerging technologies
Reduce manual workloads and enhance efficiency by leveraging automation tools such as:
- Process automation and conversational AI tools, such as RPA, chatbots, and workload automation for automating MSPs’ time-consuming and repetitive tasks
- Remote monitoring and management tools (RMM), for automating patch management, performance monitoring, and integrating remote control capabilities
- Professional service automation (PSA) tools, for project management, time tracking, and reporting
- IT service management tools (ITSM), for automating processes related to incident management, change management, and service request management
- IT documentation tools, for recording, organizing, and managing the data related to networks, software, and processes
- Network management tools, for automating network mapping, performance monitoring, configuration management, and fault remediation
If you are looking for an RPA partner that can help you through out the automation process, download our RPA partner whitepaper, with automation tools costing <$2,000 annually:
2. Invest in ongoing training and development programs
Have your teams attend business development programs to bridge the skills gap. The most common training programs for MSPs include:
- CompTIA Managed Services Trustmark: Provides MSPs with a framework for evaluating their service delivery processes, identifying areas of improvement, and aligning their operations with industry best practices.
- ConnectWise University: Offers online courses, webinars, certifications, and training programs that cover sales, marketing, finance, operations, customer service, and more.
- Datto Academy: Delivers training programs specifically focused on backup and disaster recovery solutions for MSPs.
- ITIL (Information Technology Infrastructure Library): MSPs can undergo ITIL certification programs to gain knowledge about IT service lifecycle management, service strategy, design, transition, operation, and continual improvement.
- Microsoft Partner Network: Offers sales and marketing support, as well as technical training on Microsoft products and solutions like Azure cloud services, Office 365, Windows Server, etc.
- Continuum University: Offers online training courses for MSPs on topics like cybersecurity best practices, remote monitoring tools usage, service desk management techniques, etc.
You can also forge channel partners with universities, colleges, and vocational schools to create internship programs or offer specialized courses. This collaboration can help develop a pipeline of skilled professionals and ensure their readiness for the industry.
3. Embrace diversity
Actively promote diversity and inclusion within your organization to attract a wider range of talent and benefit from different perspectives and experiences. To that end, MSPs can:
- Support ERGs (employees resource groups) that focus on specific communities or affinity groups within your organization for providing networking opportunities, support, and advocacy
- Hire diverse individuals from different backgrounds, cultures, and demographics by implementing equal opportunity policies
- Offer mentorship programs by pairing new employees with experienced team members to foster career guidance and development
- Review policies and procedures to regularly ensure that discrimination is minimized and an equal chance to succeed is given to all employees
For more on MSPs
To learn more about MSPs, read:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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