For middle market business IT, the Great Resignation has turned the spotlight on challenges that have persisted since long before 2019—but also on the solutions.
Yes, IT Can Work Remotely
The experiment is over. During the past two years, IT teams have proven that they can work remotely successfully. Ironically, it’s likely that remote work played a key role in causing the Great Resignation.
Before the almost instantaneous switch to remote work, talent struggles were mostly location dependent as businesses relied predominantly on talent they could find in their region. Now, businesses can look for talent anywhere; IT professionals, likewise, can look for career opportunities anywhere. Work-from-anywhere has reshaped the job landscape.
IT Pros No Longer Have to “Settle”
Virtual work has had major consequences. One result is that people have become less connected at work and less willing to accept a bad employment situation. They’re looking for challenging work where they can learn. They’re looking for managers who lead in a way that relates to how they want to be managed. They’re looking for their work and their knowledge to be valued by the business. And many are simply tired of putting in long hours and dealing with the stress of constantly being told to “do more with less.” With remote work, they can look for opportunities across a broader range of employers without the major disruption of relocation.
Commenting on the recent RSM US Middle Market Business Index (MMBI) “Back to Work Special Report,” RSM US LLP Chief Economist Joe Brusuelas notes, “Middle market companies that provide the flexibility and culture that workers demand stand to gain a prominent and lasting competitive advantage, all the more important in an incredibly tight labor market that has shifted the balance of power to employees for the foreseeable future.”
Among “RSM MMBI Back to Work Special Report” respondents who previously did not allow remote work…
77% said productivity was not an issue/only a minor issue
75% said managing workers remotely was not an issue/only a minor issue
Even Temporary Disruptions Cause Disproportionate Pain
Among our RSM clients, we’ve seen that middle market companies have shouldered more of the consequences of the Great Resignation than large enterprises.
Middle market organizations are mostly single-threaded. There’s a critical path. When that path gets disrupted, even temporarily, it can create big problems. And when it’s a permanent disruption, it can be catastrophic. If an enterprise with a large IT department has two or three people leave, it can easily pick up the slack. If a middle market company loses just one person from their IT staff, it could be a third of their team.
You can’t just replace a “position.” When you lose people, you lose all their legacy knowledge. And even if you make fantastic hires, it can take several months to get them onboarded and another six to 12 months before they’re operating at the same level as the people who left. To exacerbate the problem, many IT pros are staying at a job only two or three years, meaning your IT department could be operating at a suboptimal level up to 50% of the time.
The RSM MMBI survey shows that “…the tightened labor market has forced middle market organizations to prioritize holding on to their top performers.” But the Great Resignation is just one piece of the talent puzzle, and talent retention doesn’t fill all the skills gaps businesses face.
Keeping Everything In-House Is No Longer an Option
Middle market IT staff roles are evolving from generalist to specialist, and companies are finding that the two specialty areas where they tend to have the biggest gaps are security and the cloud. But midmarket businesses can’t afford to hire enough staff to cover this increased specialization.
Enter outsourcing and managed services. It can help solve the challenges of the Great Resignation as well as the other talent shortages midmarket businesses face.
It’s All in the Mix
Whatever their goals and wherever their business is in the business lifecycle, there are good reasons why many of our middle market clients are looking at outsourcing:
- Clients can take the same IT budget and tap into the brain power of a team in a fractional or shared model. They get six to 12 specialists instead of two or three generalists.
- With managed services, clients don’t have to train and support people in these specialized areas. The provider can manage everything.
- Clients get the power of the RSM firm. They gain access to specialists who are investing significant time in understanding the industry and how their requirements are affected by industry changes.
- When the managed services provider is the right fit for the client’s business, it can help bring innovation to the client’s company with its broad and deep expertise—and increase the IT leader’s influence in the business.
- Managed services providers aren’t immune to the Great Resignation, but the larger, more sophisticated ones have the team depth to absorb the losses and keep client support at an optimal level.
- Managing people takes a lot of time and effort. Employees leaving just adds to the stress. Having a smaller in-house staff to manage makes an IT leader’s job—and life—a lot easier.
- The client and the vendor hold each other accountable for the agreed-upon work. Outsourcing forces structure on the client’s IT team; it introduces or accelerates the team’s maturity level.
- The outsourcing and/or managed services team can work remotely, too. The client isn’t tied to finding a vendor locally.
- Well-funded start-ups—born in the cloud—want to be up and running fast. And the fastest route is to outsource the entire IT function: “Get it set up in the cloud and manage it for us” is a phrase we’re hearing more and more these days.
Working with a managed service provider like RSM gives companies with the ability to scale up or down, providing flexibility and agility to respond to your ever-changing business environment. Making do with limited resources or fighting turnover becomes a non-issue when outsourcing allows you to get the resources you need, on your schedule. If you’re considering outsourcing, check out our Insights Article, “12 questions to ask when selecting a managed service provider.”
The bottom line is this: Keeping everything in house is no longer an option in the era of the Great Resignation. It’s no longer a matter of simply hiring or outsourcing—it’s about how much and where to outsource.
By: Brandon McMahon and Ross Harmon