Causes, Impact, & Best Practices for Mitigation

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

Learn more about MSP automation.

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:

1. “Managed Services Market to Reach $393.72 Billion by 2028.” GlobeNewswire. July 7, 2022. Retrieved on July 19, 2023.
2. “What are the gaps in tech skills in your company today, and anticipated gaps in 2025?” Statista. July 7, 2023. Retrieved on July 19, 2023.
3. “Cyber Security Analyst Demographics and Statistic in the US.” 2023. Retrieved on July 19, 2023.
4. “Colleges Offering a Computer Science Major.” US News. 2023. Retrieved on July 19, 2023.
5. “Information Technology Professional Demographics and Statistics in the US.” Zippia. 2023. Retrieved on July 19, 2023.
6. “Information Technology Professional Demographics and Statistics in the US.” Zippia. 2023. Retrieved on July 19, 2023.
7. “58% of Employers Believe Artificial Intelligence and Virtual Reality Will Be Job Creators.” Manpower Group. June 8, 2023. Retrieved on July 19, 2023.
8. “Reskilling and Upskilling: A Strategic Response to Changing Skill Demands.” LinkedIn. October 22, 2019. Retrieved on July 19, 2023.
9. “Gartner Survey Reveals Talent Shortages as Biggest Barrier to Emerging Technologies Adoption.” Gartner. September 13, 2021. Retrieved on July 19, 2023.

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Bardia is an industry analyst at AIMultiple. His bachelor’s degree is in economics from UC Davis, and his master’s in economics and finance from Bogazici University.

He primarily writes about RPA and process automation, MSPs, Ordinal Inscriptions, IoT, and to jazz it up a bit, sometimes FinTech.