Written by: Charles Weaver, CEO of MSPAlliance
I have been talking with a lot of MSP executives lately, trying to get their sense of how things are going in these difficult and strange times. The topics of conversation vary, but we always end up talking about the future and what is next for the managed services profession.
One topic that has come up a lot is the impact COVID-19 will have on MSP employment. So, I would like to summarize my conversations with these MSP owners and executives and add my analysis of what we may be facing next.
MSP Employment
I believe MSP employment will remain strong, both during the near term, and long term. Based on explicit feedback, all the MSP leaders I have talked to have reported record spikes in their calls and tickets. No doubt caused by the sudden transition to remote work scenarios, these increases in managed services related support requests have normalized but remain strong.
I see no reason to believe that this will lessen. Once the recovery gets underway, I think this activity will increase, and businesses rebuild and rethink their IT strategies. All good signs for MSPs.
M&A Outlook
If MSPs are holding relatively stable positions, the same is not necessarily true for reactive or break/fix companies. If we experience similar patters as the 2009 economic crisis, non-MSP companies could be facing difficulties as they attempt to survive tough economic times without the benefit of recurring revenue clients.
If this happens, then we could see a shakeup of the reactive IT community in the coming months post COVID-19.
MSP Wages
We now come to the topic of MSP employee wages. At this time, I do not believe there has been any negative impact on MSP wages as a result of COVID-19. Further, based on actual interviews, there is no evidence to date that either layoffs or wage cuts for MSP employees are on the horizon.
It is important to distinguish MSP employees from non-MSP staff. There are many examples of “MSP” organizations that deliver managed services along with many other offerings. These “other” offerings could be getting hit right now, especially non-recurring, non-managed services offerings being sold to retail, hospitality, gaming, food service, and other sectors, could be dealing with wage cuts and layoffs.
Looking Further Out
As we look past these Spring months and into Summer and beyond, we hopefully begin to see a rapid recovery of our global economy and a return to normalcy. The return to normalcy may still leave a path of destruction left by the self-imposed quarantine rules.
As MSPs grow and help their clients during the recovery period, the need for even more MSP staffing is likely to occur. A trend may emerge where MSPs begin hiring from outside the traditional managed services community to fill open positions—for example, hiring someone from the foodservice industry to be an account representative, rather than seeking out someone who has prior managed services experience.
In these scenarios, those new hires may occur at wages lower than the past several years, when the global economy (and the IT) employment market was far tighter.
Overall, and compared to other industries, the managed services profession is doing well. Services are still in demand, and clients are identifying new uses of their IT resources they never had before.
MSP wages should remain stable over the next six months. New hires into the MSP market, especially those from outside the professional community, maybe impacted, but that remains to be seen.
