Service Leadership Inc., a ConnectWise solution, has released the much-awaited findings of its 11th Annual IT Solution Provider Compensation (Remuneration) Report. The report is a preeminent reference, detailing compensation data and embodying best practices amongst top-performing IT solution providers (TSPs).
The comprehensive 400-page report offers invaluable insights into TSP-specific compensation data, enumerating compensation structures, and beneficial incentive strategies as providers grapple with a surge in demand for IT solutions amid constrained resources. The resources available to TSPs are projected to increase marginally from $337B in 2022 to $406B in 2026.
The report underscores some key insights, including the settling down of wage inflation, which touched its peak in 2022 amongst TSPs worldwide. The report projects that the number of employees likely to benefit from top-level salary boosts in 2024 will reduce to a third of those who received similar increments in 2022. This reflects a steady improvement in wage inflation since its peak.
Another noteworthy finding is in the compensation strategies adopted by the TSPs. The report reveals that in 2023, the top performers amongst TSPs had more conservative compensation increment regimes compared to the TSPs that were in the bottom quartile. This discrepancy pinpoints how different strategies are adopted by these organisations based on their performance matrix.
Remote work adoption remains understated in the TSP industry. The report indicates that a mere 8.7% of employees are 100% remote, whereas a significant 42.8% are purely office-based. A vast majority of TSP employees (73%) choose to work at least three days per week from the office.
In the area of employee benefits, the study reveals that the leading managed service providers (MSPs) and value-added resellers (VARs) are less inclined to offer unrestricted paid time off (PTO). On the other hand, MSPs and VARs in the bottom quartile are more generous in this matter. Outside the US, unlimited PTO policies are almost unheard of.
Expressing his observations on the findings, Peter Kujawa, VP & GM of Service Leadership, highlighted the monumental value of the report for TSPs keen on maintaining their competitive edge in the industry. "This report is an invaluable resource that provides TSPs with the actual costs required to recruit and retain employees, which is crucial for achieving success," he stated.
Kujawa also hit upon the silver lining of the stabilising wage inflation. "The projected TAE increases for 2024 are expected to be significantly lower than those of 2023." He further explained that the downturn in wage inflation, a trend that set in after it reached its peak in 2022, is encouraging news for TSPs as they can look forward to healthier profitability figures.
Kujawa plans to delve deeper into the implications of the findings on the industry as a whole at the Channel Partners Conference & Expo and MSP Summit, which are to be held on March 11-14, where he is lined up to headline three keynote sessions.