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MSP Business | May 30, 2017

Your MSP Business Needs To Treat Employees as an Investment

MSP BusinessCurtailing Turnover

Any MSP business will naturally spend more on employees over time than on even the most expensive equipment. Proof positive: there aren’t many servers which will cost $50,000+ annually. Sure, they may cost $50,000 to purchase, $10,000 to transport, $10,000 to install, and $10,000 a year to maintain. But then you have that server for between two and five years. If you get just two years out of it, you’re looking at $45,000 a year. If you get five years out of it, you’re looking at $24,000 a year. Meanwhile, the tech guy you have maintaining that server will be a bottom-dollar bargain if, including training, benefits, and incidentals, you’re only spending $50,000 on him annually. In five years, the server has cost you $120,000. Meanwhile, the tech guy has cost $250,000.

Now certainly, this is a singular scenario with hypothetical numbers. Obviously, you’ll find tech solutions which both more and less expensive, the same as you’ll find tech professionals who are both more and less expensive; but it serves to illustrate a point: your most expensive investment will always be in personnel. And you’re not alone. Companies commonly lose, as a group, over $16 billion annually on employee turnover. But those losses don’t come from the payment of employees or benefits packages. Because what you lose from paying an employee on an annual basis, you gain from the services they provide for your company. A tech individual that keeps your computer network singing could bring your MSP business hundreds of thousands of dollars loss in revenue for the tens of thousands you pay them. No, their investiture only becomes a loss when employees leave after just several years because they’ve been poorly treated.

Protecting Your Investment

You want to protect the investment of tech personnel among your MSP more closely than you protect the equipment you purchase. Moore’s Law predicates that you’ll always be purchasing new equipment, and at regular intervals. But if you hire the right tech people, there’s a possibility they’ll stay with your organization as long as you do. However, if that’s going to happen, you simply must think ahead.

Firstly, you need to consider what kind of employees you want. There’s a huge onus on diversity today, but something to take into account is that diverse hiring gives the tech individual strategic advantage which is impossible to truly plan against. Even if you treat them the best, they could very well leave under the premise that you had mistreated them based on their diversity. The key here is to have a protocol of operations which treats all employees at a certain level regardless of the diversity which they may or may not bring to the table. To that end, you shouldn’t hire based solely on aspects of diversity, you should hire based on skill, and cultivate that skill accordingly. Hiring to fulfill a tax break or something of the kind will cost you in the end when the employee decides they haven’t been fairly treated under some standard you couldn’t have fulfilled if you tried, because the tech person you hired keeps moving the goal post on you.

Educational Opportunities

Next, you want to have educational opportunities available for personnel. Technology is going to transition, and even the well-respected, top-of-the-class technicians are going to fall behind eventually. But if you always provide education opportunities, this is less likely to be the case. So give your employees the tools they need to succeed.

Strategies Consolidated

What you must always remember is that whatever level of diversity characterizes your tech professionals; they are a more important investment than either technology or clients. You want them to have a clear path toward career success, and you want them to feel valued so they can be properly passionate about what they do. So things to remember to reduce employee turnover:

• Provide a clear career path
• Value employees— they’re your most important investment
• Educate employees as possible
• Hire based on qualifications regardless of varying diversity levels

If you can put these principles in practice, your MSP business will be more competitively set and be able to provide better service.

About our Contributor

MSP BusinessNathan Rizzo is Vice President of Rx Technology providing Technology Construction and IT Support with Headquarters in San Antonio, Texas. Nathan served as the Director of Business Development before spearheading the Managed Service Provider team in San Antonio which has turned Rx Technology into one of the premier IT Services firms in San Antonio that provides state-of-the-art cyber security in San Antonio and Texas.

Nathan received his M.B.A. in 2009 from the University of Dallas. Prior to joining Rx Technology, Nathan worked as a managed it services specialist in San Antonio delivering a wide range of offerings for litigation and internal investigations, in addition to government and regulatory requests. He has also been a partner in an interactive web marketing firm.


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