Source
r/msp•
Yangoose

Why do MSP's treat their employees like shit?

The common thread that runs through the forum is this massive disconnect between how you treat your clients and how you treat your employees.

Over and over again I hear the same mantras:

  • Never low ball
  • You get what you pay for
  • We charge the most and we are worth it
  • People offering $7 RMM are the scum of the earth

Then I see these threads talking about how employees are treated and it's a disgrace.

  • Hiring techs at $20/hour and billing them at $150+
  • Horrible vacation (Seriously, 5 days combined vacation and sick for an entire year is fucking immoral)
  • Requiring 80% or more of time spent billing
  • Unpaid overtime
  • Laughably small investments in training

I used to work for an MSP and I still hang here because I feel a lot of issues discussed here strongly apply to the SMB space that I work in but reading the completely disconnected attitude here has cemented my feelings that I'm never going back to an MSP.

Posted Apr 11, 2017, 7:41 PM UTC

6492
thisisjustahobby•

It really depends on the place. I've seen similar threads you're talking about, but also take my employer for example:

  • 2 Floating Holidays
  • 20 PTO days. Every 8 years you get another 5 days per year. I'm at 25 right now.
  • 8% 401k contribution as long as you put in at least 4%
  • 100% insurance paid (medical, dental, vision) for not only myself, but family as well.
  • Pension
  • Whatever training event I want (more or less) as long as the amount is budgeted.

Now, with that being said, wages aren't the best, but they are not the worst either.

25
microflops•

As an Aussie, a legal requirement for full time staff

9.5% Superannuation 20 days annual leave 10 days sick leave

No health insurance but we have universal(ish) healthcare.

That is the bare minimum.

You guys get screwed over

24
jaikora•

It seems more like the yanks get screwed while other countries are decent.

3
CyrixMXi-233•

We do have it pretty good.

2
keith-michael•

I'm not comfortable posting exact details but MSP I work for has similar benefits, some not quite as good as above. Overall, very good though.

7
rienholt•

Sounds like a dream job.

2
wheres_my_2_dollars•

Your question can apply to all verticals. Not just MSPs.

  • hiring at $20 and billing at $150 - bro, my business costs money to exist. Rent, electric, internet, phones, email, ALL of our tools like RMM and fresh desk, 401k match, insurance...i mean, how do you expect me to stay in business if I bill anywhere close to $20 at all OR if I pay people a higher rate. FYI i pay more than $20 an hour if you have skills that warrant it. Otherwise you're a bit under that as a very entry level 1 guy.
19
LeaningTowerofPeas•

Granted $20 is a bit low but I agree that employees always underestimate the cost of running a business. Employers have to pay out far more than what most employees estimate.

  • Social Security Tax 6.2% of your salary
  • Medicare Tax is 1.45%
  • State and Federal Unemployment Tax
  • Health Insurance (We average about 600 per employee and some families cost 1500 a month)
  • Business liability insurance
  • Workers compensation
  • Equipment such as desks, computers, chairs, phone systems, kitchen supplies, pens, paper
  • Marketing, website hosting, domain names, and advertising
  • Software - productivity, diagnostic, and so on
  • Internet and any services
  • Rent, electric, gas,
  • Training

That is just a small drop in a very big bucket of costs. We also have to pay out the software vendors prior to us getting paid by the clients..and we also have to manage cash flow to make sure that all of the above gets paid. Plus, we still need to set aside money for savings.

Sure most MSP employers make a decent amount of money, however, we take on the responsibility, the risk, and debt that comes along with the job.

19
jroe6352•

I 2nd all of the above. Also, the reason shops required x% billable and tracked is because TIME is a service businesses inventory. Just as an electronics store needs to track every TV a service business needs to track it's service professionals time. That being said there are businesses that treat service employees well and others that treat them poorly. Some of those treated poorly are intentional because they don't respect them and others out of necessity due to cash flow or other factors. Bottom line is: if the MSP you're working for is one of those that treats you poorly there are many that are better - go find one or find another IT position. Just bear in mind that ANY msp that is making enough money to pay employees well and provide good benefits will be requiring you to track your time and have a min. billable percentage.

10
brbATF•

General rule of thumb that I've gotten from everyone I talk to in the HR world is that payroll is half of the expense per employee, eg your total cost is double what your paycheck says it is

3
LeaningTowerofPeas•

That used to be the hard and fast rule. It doesn't cover your operating costs. You also have the cost of new computers, phone, training, parking reimbursable, association fees, paid time off and so on.

1
GoToMSP•

I think his point is that if you are billing $150/hr and requiring >80% utilization then you can probably afford to double their $20/hr no overtime salary.

6
WhiskeyRider69•

If you're making $20/hr you should be paid overtime. If the employee is >80% utilized then the company isn't healthy because they have no bandwidth to deal with vacations, sick days, emergencies, etc. Not disagreeing with you, quite the opposite in fact, just clarifying a bit.

2
scordell•

California has some of the strictest labor laws. If a tech professional makes under ~$48 per hour then they must be paid hourly and must be paid overtime when worked. There are a few loop holes but who wants to mess around with the labor department? Not me.

There was a new federal law that went into place last year that raised the minimum salary requirement to about $47K per year. Anyone under that must be paid hourly and are subject to over time pay.

2
antdude•

So, not required for $48.01 and over? :(

1
bosstechnologies•

All I have to say is that this applies to ALL BUSINESSES.

All industries have companies that either treat their employees well or like shit. MSP's are not immune to this. There are good ones and bad ones. Not much more to it than that.

18
Pablohere•

This guy gets it. Stop working for bad companies, they exist in every industry.

12
Tim_Theory•

TL DR

3
spinkman•

Join us up north neighbor!

http://www.huffingtonpost.ca/2016/03/13/ontario-will-test-idea-of-a-guaranteed-minimum-income-to-ease-poverty_n_9451076.html

3
Tim_Theory•

I was going to comment about the girlfriend's Seasonal Affective Disorder, but it looks like most of Ontario gets 3x as much sun as the Midwest!

BRB, renewing my passport!

2
BreakFixBill•

We treat our staff awesome, in return they treat their clients awesome..

If anyone here thinks they're the only rockstar at their MSP/Consulting firm, direct message me.. we pay $50hr+ (technically its salary so its $100k/yr+), free medical/benefits (with no deductibles), clothing allowances, meal allowances, pay for mileage, laptops/tech allowances, the list goes on.. in return for you working here we'll give you awesome clients to work with, stability and opportunity at growth.

You'll be the third person in the last year we've hired through this path, one of which moved across the country for the opportunity and 'loves it'.

17
brownjl_it•

What area are you located?

10
BreakFixBill•

Bay Area!

5
dastylinrastan•

$100k in the Bay area is minimum wage. No thanks! :P

10
BreakFixBill•

Pay is only about 20-25% higher here than say Minneapolis. Cost of living is much higher though. But by no means is 100k struggling in the Bay Area.

4
djgizmo•

Do you mean San Fran bay?

Because there's Tampa Bay, Green Bay...

2
RhombusMcBerry•

Bay Bay's Chicken...

4
BreakFixBill•

San Francisco.

3
LikeARock47•

Would you by any chance need an automation/proactive engineer to, and heres is the kicker, work remote?

MCSE, CCNA, VCP, Powershell scripting expert, 6 yrs exp, 4 at msp.

Time difference no issue, i work second shift now and love it.

2
BreakFixBill•

Culture is a really big thing to us and we've invested heavily into our offices and collaborative environment so we're really at this point requiring people be local, or we're relocating them. Sorry! :(

3
ThrowBroom•

Haha... $50 an hour in Silly Valley is minimum wage. Do you also find housing for your relocated techs? There are probably a few 3bd/2ba apartments with 4 or 5 40yo dudes living there. You could introduce them to your clients and their new stinky housemates the same week! =)

BTW, our agents are still on 20 or so machines from an account you took over from us a while back. Might wanna have a look-see at those machines and remove the agents. Not that we're going to do anything. I just find it comical that someone who seems to quite pleased with himself has agents from a previous MSP sitting on their client's endpoints.

But then again, you guys just do hourly break-fix so I suppose it doesn't matter. =)

4
MSPinParadise•

I find it odd that you don't remove your tools when a client cancels their agreement with you. It says more about you than them.

3
BreakFixBill•

Two things.. noone in the bay area calls it "Silly Valley" .. no one. Also, he's talking as if he doesn't live here himself.. so I find that odd. Lastly, you're right.. him not removing agents would be just as negligent as us not removing for them (which we do.. via automation.. ).. we're also a security focused firm so we take that stuff very seriously. I'm not sure who or what firm he's thinking of but there is more than one firm in the bay area that would match my description of ours 'on paper' .. aka breakfix in the $150+/hr range.. its a very common (if not the most common) structure for firms out here.

3
BreakFixBill•

I think you might be thinking of some other firm, we do take clients from plenty of MSP's locally but I can't think of any instances were we didn't immediately rip and replace the machines with properly spec'd laptops or immediately cleanse the machines of Labtech and or Kaseya. Yes, we do also provide corporate housing for those relocating until they're acquainted with the area. It's very accommodating.

Edit: Confirmed. You're thinking of someone else.. you wouldn't have heard of us.. we don't do sales or marketing, or craigslist job ads, etc. Report shows Kaseya only on 1 machine from a client we took a month ago, and Labtech on 7 machines that we just decommissioned on Saturday night and haven't checked in since on a client we just took earlier last week.

2
RhombusMcBerry•

Is the guy you hired that moved across the country named Ed?

2
BreakFixBill•

Nope, Scott was our most recent, from Florida.

2
RhombusMcBerry•

Hey Ed's from Florida too.

3
antdude•

Do you have online remote jobs?

1
WhiskeyRider69•

  • We probably hire techs at $20/hr and bill then out at $150, but that's standard in any service industry. When I was a copier repairman many years ago, I made about $10/hr and billed customers $98 for my services.

  • We give it guys 17 days of PTO from day one

  • We require 90% time accounted for and look for our guys to be about 70% billable out of that 90%

  • Every single one of my engineers is hourly and gets paid overtime. We even pay them 2.5x their normal rate on holidays, which include things like President's Day and Columbus Day.

  • My guys are required to do studying on their own time, but they are provided with training materials and test costs are covered by the company.

How are we doing?

13
Axxidentally•

You're employee satisfaction and or turnover, along with your bottom line, is what decides how you are doing, not u/Yangoose.

Personally, I don't think what you describe are good working conditions for a sysadmin or engineer. But, it's totally fine for entry level techs and helpdesk types. These are positions that, like fast food, should be rungs on a ladder and not career destinations.

What you describe sounds fairly standard for many MSPs.

15
WhiskeyRider69•

You're employee satisfaction and or turnover, along with your bottom line, is what decides how you are doing

That's a bingo!

Which leads to the next step in the logical progression. Companies screw their employees because they can. If no one will work for them because they offer crappy pay and benefits the company will improve the pay and benefits to get employees.

I totally understand that sometimes we all get desperate for a paycheck and take a crap job just to feed our families, but ultimately companies will offer the minimum necessary to get the man power they need. It's up to us as the collective man power to raise the minimum. It took me a few years to find a company that actually valued it's people. Sometimes their hard to find, but that's because once guys find companies like that they don't leave, so vacancies are rare. ;)

7
BreakFixBill•

That's exactly what we gauge our 'success' on. Retention of employee's and clients.

1
rienholt•

Pretty good from my perspective.

2
TheBuffman•

I fail to understand why your negatives are so negative. Personal friend is a lawyer, makes $300k+ and is coming up for partner where he will make $400k+. I never see him. His family never sees him. He bills $800 per hour, thats a cool 1.6 mil if he bills 40 hrs a week x 50 weeks buuuuuut he bills 50 hours and doesnt get paid overtime.

So 50x$800 = $4000x50weeks = $2mil. So thats 1/7th roughly? About the same ratio that you just put up.

All the other things basically apply - bill or be fired, no vaca, etc etc. I think there is a difference that he has his own office, his own secretary, and a great benefits package. He never leaves his office and spends more time there than his home or with his family.

Idk man, its super competitive all over and many different careers have shit sides and good sides. You gotta start by shoveling shit no matter where you begin.

11
MSPbyMSP•

Two things:

  • NO one is stopping you/anyone from making yourself more valuable to your employer than $40k per year or better benefits.
  • NO one is stopping you/anyone from starting your own business.
10
CyrixMXi-233•

No one is stopping you from starting your own business.... Guess not.

But financial constraints for a lot of people probably are. Especially those with families.

When I started out this was the biggest roadblock for me and I had to find other sources of income to allow me to survive while my business got to a stage where I could support myself financially.

10
MSPbyMSP•

Right, and congrats. It's not easy, takes a lot of sacrifice, and everyone thinks they should get a piece of the pie b/c they show up to work in the office you/me/others busted our tails to provide.

I know you didn't say this, nor did you suggest it, but guess what; nearly every single person that started a business had financial constraints at the beginning.

8
bosstechnologies•

I agree. I made another comment but to elaborate....

Some of us worked a day job while building up the business, some have saved hard earned money to do so, some have taken expensive loans out as well. If you think you are underpaid do something to help contribute to the company to make your value greater and don't think because you have some knowledge that the company owes you something. There are a ton of Level 1 techs out there.

2†
MSPbyMSP•

Well said.

2
GoToMSP•

There are a ton of bad ones though. The ones that are very dependable, excel at consulting, and have technical skill are much less common. Get one of those and you better pay them well or they're going to the competition.

You haven't built a mcDonalds where you can just plug in minimum wage employees who will follow your pre-written procedures and you can call it day.

2
CyrixMXi-233•

^This, the whole notion of "you pay me $20 an hour, but charge out $150 ph" is so short sighted and ignorant.

Now if they treat their employees like shit genuinely, that is a different story and unfortunately quite common amongst MSPs.

1
vPock•

So, we are not an MSP by definitions. We are a VAR/Consulting firm. But we do recruit a lot from the "competition" in the area. MSPs and break-fix with poor benefits for their employees often have the same problem : Started by a geek/multiple geeks, and they never took the time to train themselves or get help to run a business.

I see firm in our area, with guys, like you said, getting paid 20$ an hour, getting billed 120//130$ an hour. And the owners are lamenting that they can't break even. These guys usually don't have a clue about the cost of doing business. Their costs, like what do the tech actually costs. It's not just the 20$. It's not just the 20$ + benefits. It runs much deeper. And they can't comprehend that.

We had to hire a business consultant for this. After a year, we had a much better understanding of our costs. We know what every one of our consultants costs. So if we quote for a job, we know exaclty how much it costs us, and the margin we are running.

6
Bologna_Ponie•

Man I wish I had 20 bucks an hour... Tier 1 help desk that also has to build and maintain various VM environments for 12.50

6
WhiskeyRider69•

Wow! Just... Wow! $12.50? The guys at the gas stations around here make more than that. You should really shop around.

4
Bologna_Ponie•

I've tried, lol. Unfortunately there's not many options locally and I'm not in a position to relocate.

They will pay for any certs I take though which is nice. Well, except they actually don't pat for the full thing.. We pay out of pocket and they reimburse us on our checks, except it gets taxed..

1
cytranic•

No it doesnt get taxed. You just dont do your taxes correctly. You can write off expenses you paid bro.

1
Axxidentally•

What area are you in?

1
infusednz•

As an owner, im lucky if I get a week off a year. I know, it's my problem. Mainly because I decided to have our own datacenters.

I do try to treat my employees much better though. NZ law is 4 (or 5, I forget) weeks off. I give training days off and $$ against training.

We have free redbull, water, food here (water in a bottle, makes a huge difference).

I think you can make some very small changes in a company that has a great effect on employee wellbeing.

My guys are all paid from 50k NZD to 120k NZD salary. On call is a set amount per day + callouts.

6
Coriron•

I don't know how you guys survive. In the UK the "norm" is 20 days paid holiday + public holidays rising to 25 days with service. Our pay is about the same for entry level techs.

5
SS_Mike•

The leave policies are really bad. A lot of states do not require leave to be given to employees at all. Personally I feel like that should change but I don't see it on the horizon.

5
WhiskeyRider69•

True, and sadly it's in the business best interest to be generous with leave. Employees are a resource, just like anything else. If a company had a server that was 100% utilized at all times they'd add an additional server to spread the load out. It's truly amazing that a lot of companies don't understand that.

1
sethcalkins•

I like your analogy.. A company I've recently been employed at does not have paid vacation.. however I do enjoy their "time worked is time paid" they don't mind when I take time off.. I think that's a great compromise for very small shops and makes business sense

1
tehgoatboi•

"A lot of states" There are NO states that require any paid time off at all. there is no law in the US that states any paid time off has to be given to anyone.

1
SS_Mike•

I put it that way because I thought some states had passed legislation but I just went back and looked and you're sort of right. Some states require paid sick leave, but not vacation leave. Since a lot of employers lump those together that could be construed as mandatory leave.

1
SS_Mike•

Employee mills exist in every sector. Some MSPs suck, some don't, and some are just awesome to work for. I do a lot of things differently than you described above and do my best to be one of the awesome MSPs to work for.

I've worked for one of those terrible MSPs. They're profitable but they have a high turnover and earn a bad reputation. We pride ourselves on our service, diversity of services provided, customer retention, and our employees. I've not had an employee resign since I changed my management style, which was a hard habit to break given the mentors I had working for that terrible MSP.

The funny thing about training is that a year ago I told all of my techs to pick any course they want and I'll pay for everything and I still haven't had a single training request, despite reminding them several times. I do a lunch and learn every Friday though (company provided lunch) so maybe they feel like they're learning enough from that. We just go over best practices in several areas that myself and my senior tech have developed by doing this as long as we have.

Long story short - you had a bad experience but no two MSPs are the same. Some people just don't know how to run a business.

5
andrew867•

Do you have any recommended reading for your current management style? How did you learn to change and how have you changed?

1
mark_west•

This is what really helped me becoming better manager. https://www.manager-tools.com/ They have great podcasts and a starter set for people that don't know where to begin. Once I implemented even some of the items, I started seeing big improvements in my relationships with employees and also work being done.

2
0fsysadminwork•

The funny thing about training is that a year ago I told all of my techs to pick any course they want and I'll pay for everything and I still haven't had a single training request

Wow, that's odd, I would jump at that and would have as a helpdesk tech. Maybe they are afraid they will have to do it on top of their work? IDK. I still would haha.

It would probably be beneficial to your business to get them some training, maybe find a course and time and ask one of them or tell them, they are doing training this week. Might get them talking about it?

1
iamgeek1•

There is an MSP in my area that starts their techs at $13/hr. I don't know how they stay staffed.

3
tehgoatboi•

i work at that msp (probably not the exact one, but one like it). we don't stay staffed. only reason ive been here 4.5 years is because i clawed and scraped and bled to get 20$ an hour, when i began at 10.

3
iamgeek1•

I went in for an interview with these guys. The whole time the guy was complaining about his turnover rate (kinda a red flag in the first place). When he got to money he offered me $10/hr. I was like hell no, I made $14 as an intern at a state agency (my state government has some of the worst paying jobs around). He's like "highest I can go is $13". I did not accept the offer.

1
growingMSP•

I debated answering your question because it goes against: Don't feed the trolls. That being said, I feel you're genuinely interested in the question, so I intend to provide an honest answer. (I feel that lumping all the negatives together into a single list isn't reasonable, because it's unlikely an MSP is committing all of them, but at the same time, I understand you're citing some recent examples from posts, particularly the question about vacation days.) To get to my point, benefits vary based on the maturity and revenue of a company. New companies prioritize differently than mature companies. It's also tough to comprehensively discuss the challenges of running a business unless you've done so personally. As the owner, I take the lion's share of income. Of course, that also means I put in the most hours, regularly take risks others don't, accept all the liability of the company and employees, and bring skills to the table others don't have. I'm sure we'd all love to model the Google benefits package from the outset, but I'm content with increasing benefits over time as my organization grows. Thoughts?

2†
YangooseOP•

US-based. All employees annually receive 5 days PTO for vacation or sick, their discretion. We don't pay for holidays, but are closed on 5 or 6. Do you guys pay holidays?

I honestly don't know how you find people willing to accept that.

I totally get that being a business owner is very high risk high reward. I get that you deserve to reap the majority of the benefits from your success. No argument at all here.

But it works exactly the same way for you as it does for your customers. If you take the low-ball MSP with super low rates you almost always regret it. The quality of the work is shit, the speed at which work gets completed it shit. The work is sloppy and requires a ton of fixing. It almost always ends up costing you more in the long run. This is EXACTLY the same thing you get by hiring super cheap employees and offering them shit benefits.

When you treat your people right and pay your people right you find you have a team of skilled loyal people you can count on. When you treat your people like shit you find yourself spending 80 hours a week herding cats.

9
growingMSP•

Well stated. I suppose much of the conclusion to this question is subjective. I feel my team to be high-quality and engaged. Our area is generally an employer's market, meaning, there are more candidates than positions. For a small company, I work to create a culture of appreciation. I take my people out to lunch frequently, keep the office stocked with snacks, and have established a track record of building increased benefits consistently as the company grows. It's my hope that as we all pull in the same direction, we'll all benefit from the growth. Bottomline: Not everyone is looking for the same things. To some, money and benefits are less important than working somewhere where the owners appreciate them and care about their well-being. So, until the money and benefits catch up, I'll keep at it. :)

3
lsitech•

This. Pretty much every decent employer wants to pay more for better employees but running a business is tough. Believe me I would rather pay enough to never have to worry about turnover and hiring again. We have made great progress but we're still not where I want to be.

2
infusednz•

Also, people here thinking paying 20-40 an hour, and billing @ 150 is a rip off are missing some business sense. You are not billable for all your hours. Including downtime, expenses etc, you will find your actual charge out rate much lower. Employee's don't see it this way though.

2
jkeegan123•

I found out that I another msp that an employee came from was charging the employee mote than health insurance was costing so that the were making money off of the employers health plan, or maybe just subsidizing the owners plan. Disgusting.

2
LVNeptune•

Have them immediately contact the employment department of your state. There is so much wrong here.

1
OIT_Ray•

Simple answer: I don't. Like anything else, there are good ones and bad ones. The bad ones typical get the most attention. But it doesn't mean they all do it, or even most of them. I used to work somewhere I had great friends, but the environment was rough. When I started OIT I decided that my office would never be like that. We don't pay top dollar, but we're competitive. Honestly, the employee is never going to earn near $150/hour. Complaining about it is ridiculous. But we also do plenty of other things to show appreciation. I.e. tons of paid time off (both whole days and partials), paid vacation, paid sick time, insurance, free food (breakfast, lunch, snacks), toys, training (online and in person), car washes, and anything else I can think of.

2
Pablohere•

Sounds like you have worked for some really bad companies. My company pays more than what you mentioned to our L1 staff alone. We have an unlimited paid vacation policy, work from home 75%+ of the time, rarely work on weekends (unless by personal choice) have direct access to talk to upper management about any issues or things that we think can make the company work better and management is only interested in delivering a great user experience (instead of counting hours worked) and our management team is not afraid to go tell customers that they need to open their wallet if they want good technology.

Our customers are super happy and in the last 2 years we have only lost one customer because they went through an acquisition and were given no choice.

TLRD: if you have talent, you are working at the wrong places.

1
vofgofm33•

Msp I work for treats us great, 2 weeks vaca, benefits, matching 401k, great work environment, etc.

1
prothirteen•

Out of curiosity, do you - or have you ever - owned an MSP?

Not trying to be overly aggressive, I'm honestly trying to see where your perspective is shaped.

We're based in Canada, so prices and policy reflects that.

Yeah - we charge four times what we pay for our techs, but that price also reflects the costs of doing business. Those costs, like vehicle maintenance, gas, insurance, business insurance, licensing, rent, services, training and paid time are costs we simply can't afford to give back to the tech. We do, however, try our best to give back in other ways.

We provide 2 weeks vacation to start - which I think is policy in Ontario, but one more week per year if you've spent a year with us. 4 paid sick days too - one per quarter. We have a benefits package too - from dental to gym memberships.

We do as much extra curricular as I can afford - in the summer, that means a biweekly BBQ at the shop. Next month, we're headed to the Tech Leadership conference in Waterloo - all of us - to learn more about IT sales and security.

I guess it varies based on the shop - I've seen plenty of shops cracking the whip, so to speak. Your company's culture will be directly reflected to the client. Once you're stable, it's the first thing you should work on.

1