Do you remember those lengthy, unrealistic word problems you used to have to solve in elementary school?

Susie Smith has 250 watermelons. On Monday, she wants to give five of her friends 50% of her watermelons. On Tuesday, she wants to give 50 watermelons to people in her neighborhood. On Wednesday, how many watermelons will she have left to bring to the county fair? (The answer? 75.) 

While this example may seem silly, it is a good exercise in taking each step of the problem into consideration prior to reaching a resolution.

That’s what we’re going to do together today, in a much more realistic and, unfortunately, sobering sense. Why? Because managing a successful in-house help desk involves more than simply paying the salaries of your IT support team. In order to not get bogged down by the percentages and costs, let’s meet Brian Smith.

Brian (Susie’s husband, who affords his wife her ridiculous watermelon budget), was just hired as a Level 1 technician by John Johnson at The Midwest MSP, a Managed Service Provider in Indiana. His salary is $54,640, based on the average of Bowman Williams’ seven average salaries within Level 1 job categories (see page 11 here). Brian and John are equally thrilled to have him on board, as the amount of reactive support for common technical issues needed by The Midwest MSP’s customers have increased over the last five years. Brian will help take that load off of his fellow technicians' plates, so they can focus on projects such as migrating their customers from Exchange to M365 and solving system-wide administration issues.

But a $54,640 salary isn’t where the cost of hiring Brian begins and ends. Let’s back up first. 

Recruitment Expenses: Finding the Right Talent Isn’t Cheap

In order to recruit Brian, John had to spend $163,920! Like many employers, hiring a new employee for John costs 3x the position’s salary. And that investment wasn’t without headaches. According to ISACA, 74% of surveyed organizations said they're concerned about attracting and retaining talent. Finding Brian cost John not only money but also time. Time he really didn’t have on top of overseeing his team, expanding to new verticals, and offering new services.

Onboarding and Training: The Loss That Comes With Ramped Up Productivity

Training Brian takes time that is unavoidable. He needs to learn the tools specific to The Midwest MSP, get up-to-date on the latest best practices, and more. The cost of that time? $1,286. To make matters even more costly, John won’t see the return on his investment for months. According to Bliss & Associates Inc., getting Brian to 100% productivity can take 12 weeks.

• In Brian’s first month, his productivity is only 25%, which means that the cost of lost productivity is 75% of his salary: $40,980.

• In Brian’s 5th to 8th week, his productivity rises to 50%, lowering the cost of lost productivity down to 50% of his salary: $27,320.

• In Brian’s 9th to 12th week, his productivity has risen to 75%, meaning the cost of lost productivity is now only 25% of his salary: $13,660.

During those 12 weeks, John’s bottom line is not only getting a hit, but Brian’s fellow technicians are also having to do additional work that Brian is not yet ready to take over.

The Employee Life Span in IT Support

So Brian has reached week 13, and John’s investment has paid off. The work is spread throughout the technicians, with Brian addressing the bulk of those end-user computer issues such as password resets, internet connectivity issues, and email errors. But how long will Brian be content with his position at The Midwest MSP? 

Because he’s only 40 years old, there’s a 77% chance he’ll be ready to move on within two years, according to ISACA. Why? If he’s like 54% of the ISACA survey respondents, heavy workloads. Brian is so bogged down by never-ending Tier 1 tickets, he has no time to invest in gaining new certifications, training to become a Level 2 technician, or increasing his knowledge of cloud computing. Burnt out, he leaves.

Where does that leave John? Based on SHRM research, the cost of replacing an employee can range from 50% to 200% of their annual salary, depending on their level of experience. Because Brian was a Level 1 technician, let’s go with 50%. That means it will cost John another $27,320 to replace Brian.

The Overall Cost of Hiring Tier 1 Technicians

While this can be a never-ending cycle for MSPs, let’s pause here and reach our lengthy word problem’s resolution based on John’s experience with Brian.

• Recruitment: $163,920

• Two Years of Salary: $109,280

• Training: $1,286

• 1st Month Loss: $40,980

• Week 5-8 Loss: $27,320

• Week 9-12 Loss: $13,660

• Replacement: $27,320

John’s total cost? $383,766!

Save Time and Money With Helpt

Do you have $383,766 sitting around to repeatedly hire and retain Tier 1 technicians? Even if you did, is that really the best way to invest in your MSP’s future? The hidden costs of recruiting, training, and turnover add up fast, draining resources that could be better spent on revenue-generating projects. Instead of getting stuck in the costly cycle of hiring and replacing technicians, partner with Helpt. Our 24x7x365 help desk lets you improve business efficiency, increase customer satisfaction, and scale seamlessly–without the overhead. 

With Helpt, experience the cost-effective way to provide support solutions, giving you back time and money to increase cybersecurity efforts, invest in your employees, and improve your business’s tools.