Major annual financial burden

A concerning 22% of IT decision-makers estimate that their businesses incur losses exceeding £100,000 annually due to an ongoing IT skills shortage.

Losses stem from a variety of cost factors, including recruitment fees, expenses associated with hiring temporary staff, the necessity of offering higher salaries to attract qualified candidates, and the investments required to train less experienced employees up to the necessary level of competence.

There’s an urgent and growing need for expert strategies to address the skills gap in the IT sector effectively.

General increases in recruitment costs

Recruitment costs in the IT sector are on an upward trajectory, with 77% of surveyed IT decision-makers reporting increases over the past three years.

Nearly half of these respondents, 45% to be precise, have observed recruitment cost increases exceeding 10%.

Challenges are escalating in sourcing skilled IT professionals, which in turn drives up the cost of attracting and securing the necessary talent to fill key roles within organizations.

Extended vacancy periods

Companies are facing major delays in filling IT vacancies, with 27% of them now taking more than two months to secure suitable candidates. This an increase from the situation two years prior and spotlights the deepening issue of talent scarcity in the IT sector.

Extended vacancies hinder operational efficiency and escalate the costs associated with prolonged recruitment processes and the potential loss of productivity.

The data referenced above originates from a detailed study conducted by Symatrix, which targeted 200 IT decision-makers from large businesses. This research aimed to capture a comprehensive snapshot of the current state of IT skills availability, the associated financial impacts of shortages, and the responses of large enterprises to these challenges.

Costs of managing IT in-house

High monthly expenses

Around 36% of businesses report that their expenditures exceed £250,000 monthly. This outlay is due to the direct costs associated with staffing and equipment and the indirect costs of inefficiencies that arise from potential skills mismatches and the need for ongoing training and development in a rapidly advancing technological environment.

Perceived savings from managed services

A large majority of businesses, 90%, recognize that adopting managed services could yield cost reductions. This is further supported by 61% of businesses that estimate potential annual savings of more than £50,000 if they transition to managed services.

Anticipated savings here stem from the ability of managed services providers to leverage economies of scale, access to specialized expertise, and more efficient resource management.

Adoption and benefits of managed services

Advocating for managed services

Charles Courquin, the sales director at Symatrix, leads the adoption of external managed services as a strategic response to the pervasive IT skills shortages that plague many organizations.

He points out that managed services address the immediate gaps in skills and provide ongoing, proactive support that helps businesses adapt to changing technological needs and derive greater value from their IT investments.

Cost savings achieved

According to the survey, 38% of businesses that have embraced managed services report annual savings exceeding £100,000. These savings manifest as direct cost reductions in operations and indirect benefits such as increased efficiency, reduced downtime, and improved scalability.

Businesses that have yet to adopt managed services also acknowledge the potential financial advantages, highlighting a widespread recognition of the value provided by external IT management solutions.

Comparing in-house management vs. managed services

Potential savings with managed services

A large portion of businesses, 61%, operating their IT services entirely in-house, acknowledge the potential to save over £50,000 annually by transitioning to managed services.

This realization points to a growing awareness among corporate leaders of the efficiencies that managed service providers (MSPs) bring through specialized skills, streamlined operations, and scale economies.

An overwhelming 90% of these businesses believe that adopting managed services would lead to cost savings.

These savings are likely derived from reduced overhead, the ability to mitigate the cost of hiring and training specialized staff, and decreased downtime due to enhanced expertise and faster response times offered by MSPs.

Return on investment from managed services

The investment in managed services shows a clear return, as evidenced by all respondents in the survey who use managed services reporting positive ROI. This unanimous response highlights the value that managed services add in both cost savings and in contributing to business growth and operational efficiency.

Faster realization of investment return can be attributed to the immediate impact of specialized skills and technologies that MSPs bring to the table, which streamline operations and reduce costs more quickly than conventional approaches.

Managed services tend to yield returns faster than traditional in-house management, with a higher proportion of MSP users experiencing ROI within a year.

Tim Boesen

June 4, 2024

4 Min