June Tech Job Losses Good Sign for MSPs

Non-technology US businesses lost 90,000 Information Technology jobs in June of 2018, according to a report from CompTIA. The report also went on to say that IT sector jobs rose by 9,600 from the previous month.

Why is this good? Well, it's not really good if you are one of those people who was laid off but it is good news if you are a managed service provider. Let's take a closer look at what this data means.

Why Are Non-Tech Businesses Cutting IT Jobs?

Increased Pace of Change
Although the overall US economy is going quite well, with unemployment at record lows, we must take into consideration the increased level of competition and pace of change facing most businesses today.

Focusing on Core Competencies
This has been a mainstay in the managed services profession for at least 20 years! If it is not your core business then why are you doing it in-house? This is particularly true in a rapidly growing economy. Pressure to maintain focus on core organization goals is even more concentrated when you consider the already tightening labor market.

The Rise in Managed Services Engagements
Assuming the accuracy of this data, this trend should bode well for managed service providers as beneficiaries of a tightening IT labor market. While MSPs themselves have been struggling with identifying new IT talent in recent years, the economics of IT outsourcing are quite compelling when you consider an HR department's reality of identifying, hiring and keeping internal IT staff when it is arguably much easier to source a single MSP vendor.

The key conclusion for me in reading this data is that the MSP sector appears to be quite strong. Economically, there is a lot of demand and as long as supply is kept up, MSPs should be doing quite well.

If you are one of those 90,000 IT workers who lost a job in June, here is a bit of advice: go apply for a job at an MSP company. I know they are hiring!

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