MSPs: Freezing Salaries But Still Hiring

MSPs: Freezing Salaries But Still Hiring

glass-half-fullHere's an interesting sign of cautious optimism: Many managed service providers are freezing staff salaries but still recruiting new employees to fill strategic positions -- particularly sales positions. The trend emerged during a CompTIA Breakaway 2009 roundtable discussion involving about two-dozen VARs and MSPs. Here are the implications.

On the one hand, it's wise for MSPs to continually interview new talent and pinpoint new positions that can help fuel growth. But on the other hand, your existing staff may resent a strategy that involves (A) salary freezes and (B) continued hiring. To combat the potential morale problem, one MSP participating in the CompTIA roundtable discussion guaranteed employees zero layoffs for the next two years (though employees can still be dismissed for cause).

Despite having solid recurring revenue business models, I suspect few MSPs are in a position to guarantee zero layoffs. I remain a glass-half-full type of guy and continue to hear anecdotal growth stories from many MSPs. But the harsh reality is many MSPs continue to face delayed or unpaid bills from small business owners that are struggling with their own cash flow.

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