Wage Inflation Trends, Remote Work Insights, and Retention Strategies for MSPs in 2025 with Peter Kujawa
Peter Kujawa from Service Leadership discusses the findings of the 2025 Annual IT Solution Provider Compensation Report, focusing on the trends in wage inflation and employee retention within the managed service provider (MSP) sector. The report reveals that wage inflation peaked in 2022 but has since improved, largely due to the cooling off of the remote work trend and significant layoffs in the tech industry. This shift has led to a more stable job market, particularly in the U.S. and Australia, while Europe continues to experience stubborn wage inflation.
The conversation also delves into the current state of remote work, revealing that only 9.6% of employees are working fully remotely, while 42.6% are exclusively in the office. Kujawa notes that hybrid work models are likely to persist, especially among national and international MSPs. The data indicates that companies that maintained remote work longer faced more challenges when transitioning back to the office, highlighting the importance of flexibility in modern work environments.
Retention rates are another critical focus, with the report indicating that employees with one to three years of experience have a significantly higher turnover rate compared to those with eight years or more. Kujawa emphasizes the importance of structured onboarding and mentorship programs to improve retention, particularly for new employees and managers. He points out that investing in training and support for new managers is equally crucial, as their turnover rates are alarmingly high.
Finally, the discussion touches on the relationship between employee retention and profitability. The report shows that the best-performing MSPs tend to pay lower salaries but offer higher performance-based incentives, creating a more enjoyable work environment. This trend suggests that MSPs need to rethink their compensation structures, focusing on performance pay and aligning incentives with factors that employees can control, such as productivity and customer satisfaction, rather than broader financial metrics like EBITDA.
All our Sponsors: https://businessof.tech/sponsors/
Do you want the show on your podcast app or the written versions of the stories? Subscribe to the Business of Tech: https://www.businessof.tech/subscribe/
Looking for a link from the stories? The entire script of the show, with links to articles, are posted in each story on https://www.businessof.tech/
Support the show on Patreon: https://patreon.com/mspradio/
Want to be a guest on Business of Tech: Daily 10-Minute IT Services Insights? Send Dave Sobel a message on PodMatch, here: https://www.podmatch.com/hostdetailpreview/businessoftech
Want our stuff? Cool Merch? Wear “Why Do We Care?” - Visit https://mspradio.myspreadshop.com
Follow us on:
LinkedIn: https://www.linkedin.com/company/28908079/
YouTube: https://youtube.com/mspradio/
Facebook: https://www.facebook.com/mspradionews/
Instagram: https://www.instagram.com/mspradio/
