It’s a great time to be an IT managed service provider (MSP). The sector is growing — according to a 2019 survey, 71% of MSPs are planning on hiring in the next year.
But a growing market almost always means growing competition. With MSPs all over the world scaling up to meet demand, it can be difficult to staff up in time, especially in countries like the U.S. that are experiencing record-low unemployment. It’s no wonder 30% of MSPs say hiring good people is one of their top pain points.
“30% of MSPs say hiring good people is one of their top pain points.”
When skilled employees aren’t available on the job market, many businesses turn to outsourcing. But MSPs have a unique business model and uniquely skilled workers — can you successfully outsource work without reducing quality of service or losing customers?
The answer is yes. There are certain functions MSPs can absolutely outsource, and doing so just might give them a leg up on the competition.
Outsourcing MSP business functions
Customers rely on MSPs to provide important and often sensitive IT services, and many MSPs are (understandably) hesitant to move those services to an outsourced model.
Letting outsourced employees handle critical customer requests opens up risks that many managers aren’t comfortable with. Will the outsourced employee handle private information responsibly? Will they have the skills to service my customers? Will there be communication issues?
However, it’s important to remember that when an MSP scales up, the entire business has to scale with it. That means administrative and internal functions will be hiring as well.
MSPs should consider outsourcing some of these non-IT functions. Doing so can make room in the payroll — outsourcing often costs much less than hiring in-house — and can also relieve the pressure on the team members in charge of hiring and onboarding.
Examples of business functions that can be outsourced include:
- Marketing — A marketing agency can support and sometimes even take over marketing duties like website maintenance, paid advertising, search engine optimization, email campaigns, and even event and tradeshow activation.
Not sure where to start with marketing?
Learn proven marketing strategies for growing your MSP.
- Sales — Outsourced sales companies can provide salespeople to source leads and close deals, but they don’t stop there. Many firms can also optimize sales processes and help improve sales technology to reduce the cost of customer acquisition.
- Accounting/bookkeeping — Having a CFO is awesome, but many smaller MSPs simply don’t have complex enough finances to require keeping a team of people on full-time to manage them. Accounting firms can lighten the load on administrative teams and executives by managing taxes, payroll, accounts payable, and accounts receivable.
- HR — It may seem counterintuitive to outsource your people management function, but outsourced HR services providers can be a big help for small businesses, assisting with payroll, onboarding, workers’ compensation, compliance, and more.
Outsourcing MSP IT functions
As we discussed, many MSP leaders are hesitant to outsource their core services for fear of reducing quality of service and losing customers.
However, every MSP reaches a tipping point as they scale, where limiting service to in-house employees actually has the opposite effect: decreasing customer satisfaction.
Take the service desk, for example. Outsource that function and you might have to give up some level of control over customer experiences, risking relationships. Keep it in-house, and you risk long time-to-resolution for tickets and burnt-out employees.
One solution to this catch-22 is to use outsourcing only as needed in a supplementary fashion. There’s no need to replace your service desk team — just give them support when the queue overflows. Outsourcing enables MSPs to scale up and down quickly in these situations, relieving the burden on in-house employees.
You should also consider which tasks and tickets get outsourced. By working with your outsourcing firm to develop a model in which the most urgent, complex, or important tasks get worked on in-house while comparatively routine tasks get sent to outsourced employees, you reduce the risk of service breakdown.
Hidden advantages of outsourcing for MSPs
MSPs turn to outsourcing when they can’t handle their workload and can’t find good employees to fill openings fast enough. However, there are other reasons to outsource beyond talent crunches.
For example, outsourcing can be used to expand service hours. By outsourcing to places like The Philippines, MSPs can service customers when issues occur outside normal working hours, and get additional work done while they sleep (literally).
In addition, MSP staffing companies sometimes offer talent specializing in services that you don’t offer yet, but that your customers are asking for. For example, you could consider adding managed security services using an entirely outsourced team, providing outsourced SOCs or NOCs to your customers via a third-party partner.
Choosing an MSP staffing company
Whether you’re outsourcing a business function, supplementing an internal team, or adding a brand new service offering, outsourcing is an attractive option for rapidly scaling MSPs.
However, you can’t choose just any partner and expect great results.
When researching MSP staffing companies, look for a partner that will:
- Offer highly-skilled employees
- Provide excellent service to both you and your customers
- Cost less than hiring in-house
- Understand how to use your tech stack
- Let you maintain control over onboarding, culture, etc.
When it comes to outsourced security and network services, Bolton Labs is the gold standard. Our MSP customers receive hand-picked, highly-skilled resources, helping them scale their security offerings fast.