The overwhelming majority of MSP customers are so frustrated with their managed service provider (MSP) that they’re looking to replace them within the next year, according to a new report from CloudBolt Software.
With 80% of companies shopping for a new MSP, the report cited two trends for the widespread dissatisfaction:
- Organizations are building increasingly complex and chaotic multi-cloud architectures that they cannot internally maintain. They are turning toward MSPs for skilled, specialized support.
- Meanwhile, MSPs are experiencing substantial internal skill gaps due to heightened employee churn. The one-two punch of the pandemic and the Great Resignation has made it difficult to both hire and retain employees.
Largely, MSPs can resolve these issues through better hiring and retention processes—easier said than done. But MSPs must also acknowledge an omnipresent shift in enterprise needs.
MSP Clients Have Many Cloud Needs
Enterprises haven’t just moved to the cloud; they have aggressively expanded. CloudBolt Software’s respondents outlined the causes of their dissatisfaction:
- An inability to optimize cloud spending (60%)
- Limited or non-existent multi-cloud options (58%)
- Inability to better enable cloud automation (50%)
- Failure to provide visibility into cloud spending (41%)
- Inability to automatically remediate spending inefficiencies (24%)
Luckily, respondents also still believed that their MSPs outperformed them. Even with the above failings, 91% believed that their MSPs increased their agility—and 85% thought their MSPs were more successful at digital transformation than they would be alone.
Further, 97% of respondents stated that they would be willing to pay more to an MSP that could deliver solutions to these problems. These responses indicate that many believe they are significantly overspending on their current cloud stack.
Also read: Top Cloud Migration Services Providers 2022
Demand, Growth Dilute Service Quality
In 2020, ConnectWise estimated that there were 40,000 MSPs in the United States. And the industry hasn’t slowed. From 2021 through 2028, Fortune Business Insights estimates the market will experience 12.6% compound annual growth.
But where does the talent come from to meet this growing demand?
Just as enterprises are churning through MSPs, MSPs are churning through employees. Even during the Great Resignation, employee churn within the tech industry outpaced any other sector—an average of 13.2%.
MSPs aren’t just struggling to cover a skills gap—they also have no assurance that they will be able to retain their talent. Enterprises may onboard with an MSP that provides everything they need, only to discover that a year of employee churn dismantles their support infrastructure.
Previously, we’ve discussed what MSPs should do to differentiate themselves in a quickly changing marketplace: move toward specialization, partner proactively, and invest in their independence.
Specialization protects MSPs from expanding beyond their core capabilities and weakening their brand—while strategic, independent partnerships position MSPs to better compete with larger organizations.
Support Suffers from Employee Turnover
In addition to a lack of technical depth, employee churn leads to communication issues and misunderstandings. When enterprises can’t properly connect with their MSPs, they can’t discuss and address their needs.
One mid-level MSP reported, “We have found most MSP turnover related to poor project communication and a lack of personable support. Most of the competition we are gaining business from takes hours to days to respond to routine support requests and often takes multiple attempts to fix issues.”
In an always-on, rapid-deployment, remote-focused world, communication skills are essential. Terse emails and closed trouble tickets won’t cut it. Unfortunately, in a competitive market, MSPs must lean toward hiring technologically-capable employees rather than employees with soft skills.
How MSPs Can Retain Employees
What can MSPs do to keep their employees—especially sought-after employees, such as cloud and security specialists? On Reddit, MSP employees discussed the most significant factors that led to them enjoying their jobs.
Working for an MSP is unpredictable. A project slated for eight hours could take twelve. A single night on-call could lead to a sleepless weekend. Flex-time, remote work, and generous time-off policies ease the burden on employees and improve work-life balance.
Rather than continuing traditional IT churn-and-burn tactics, MSPs need to invest in employee relationships. As Deloitte notes, the workforce is changing. The IT industry has always skewed younger—and younger employees prioritize company culture, work-life balance, and diversity.
Finally, MSP employees cited everything from free sodas to mileage reimbursement as reasons to stay with their current position. Other benefits listed included: ergonomic equipment, insurance coverage, employee lunches, profit-sharing, and annual bonuses.
Employees generally don’t want to change jobs; they find it exhausting. But they need to feel both respected in their current position and that their employer provides room for growth.
Meeting the Needs of the Changing MSP Landscape
Enterprises are now at nearly 100% cloud adoption—and these cloud infrastructures are constantly expanding. Today, the average enterprise uses 1,300 cloud applications. Modern enterprises will prioritize partners that can manage their inefficiencies, control their spending, and mitigate security concerns.
The demand for MSPs will continue to grow as multi-cloud infrastructures become even more chaotic and unwieldy—creating opportunities for those who can keep up. But MSPs will need to hire and retain talented cloud specialists to meet these shifting enterprise needs.