Do I need to hire more staff?

When you challenge your service team to improve you're likely to be met with this response.

"We're too busy, we need more staff."

This is an understandable response, but it's often not the right answer. The service manager views this as a simple input vs. output issue. "If you want us to do more, we need more people to do that."

Instead of viewing the solution as needing to do more, you should look at this as a challenge of doing less!

The Source Of Your Problem

The big question is: why are you overworked? While it may be true that you're understaffed, this isn't often the case. Typically, the root causes include underpriced service offerings, a lack of standards for technology management, limited documentation, or spending time on low-value work.

Taking a lean approach to your workload and working to eliminate low-value tasks can be a great start. Here are some tips to help your team identify waste in their workload.

Do more, by doing less

Time Audits

Conduct a detailed review of timesheets to classify how staff time is spent. If that feels too cumbersome, consider using tools like RescueTime, or have team members jot down their activities every hour.

Review the outputs from your time audit: how much time is dedicated to service work vs. other activities like communication, meetings, or wasted time? Focus on questioning the value of every task.

The value doom loop

We often get trapped in a cycle of work that loses its connection to value. Hours spent on tasks that no one would miss if eliminated create unnecessary waste.

Rank The Work

To eliminate waste, consider conducting a high-level review of the team's overall workload. This involves analyzing ticket loads and categorizing ticket types and sub-types. How is time being allocated across the team? Are there processes or areas that consume significant time yet provide questionable value?

For instance, I've observed many teams dedicating 3-4 hours weekly to proactive network reviews. However, if the outputs of these reviews aren’t acted upon and the clients don’t recognize their value, the question arises: should this effort continue?

Another common scenario involves spending 10 hours a week on statements of work (SOWs), particularly when the close ratio for these proposals is disappointingly low. This represents a significant waste of time and resources.

Identify and assess the low-value activities that are consuming substantial time. By eliminating or streamlining these tasks, you can free up valuable resources for high-impact activities that drive real value for your clients and your business. 

Efficiency

To determine if your team truly needs additional resources, you must rely on objective data regarding utilization rates. If the team reports being overwhelmed, but your data shows that most members are operating at around 70% utilization, with some at 30-50%, this suggests there may be inefficiencies to address first. A thorough review of workloads and processes can help identify reasons for low utilization. Before concluding that hiring is necessary, focus on optimizing the team's efficiency to ensure everyone is performing at their full potential. This foundational analysis is critical for making informed staffing decisions.

Productivity Metrics 

Here are some metrics to gauge your team’s productivity:

• Utilization: Aim for at least 70% on average across resources.

• Tickets per Tech:

• T1: 10-20 tickets per day

• T2: 5-10 tickets per day

• T3: 3-5 tickets per day

• SLA Compliance: Measure your SLA compliance to identify friction points.

Dig Deeper

When the service team feels overwhelmed, the instinct is often to add more staff. Before you do, review the steps above with your team and identify areas for improvement. There's always potential to enhance efficiency by eliminating waste and focusing on the right priorities.

KPIs for team growth

Utilization can also help project your team’s capacity. If you have 4-5 staff, these metrics can serve as growth indicators. As you scale, consider the following KPIs to proactively determine if you’ll need more staff:

Now, let’s look at a couple of other example KPIs that you can use to determine if you are going to need more staff in the future so you can hire more proactively. 

• $10K in MRR: Generally, for every additional $10K in MRR, consider hiring another staff member to manage the increased workload.

• Tech-to-Node Ratio: This is the number of workstations/servers under management relative to support staff. A good ratio is around 250-300, aiming for 400. Ratios below 150 indicate inefficiency.

• Gross Margin: Being transparent with your team about how you measure business performance is key. For instance, if a service manager requests additional staff, having data on gross margins can guide the conversation about hiring.
  
  

You would maybe say, “We can’t afford that.” 

Instead, you could say, "We can't hire right now. Our margin for the last 3 months has been 53%. We are shooting for 55%. If we hire two new T3s, we’d sink to 38%. Can we chat through some other options?" 

They may not like the decision and think budgets be damned, but having an objective measure to point to vs. them just thinking you're being cheap helps to smooth the discussion. For reference, you should be targeting between 50-70% margin on your MSP services.

Lean out the work on the service desk

Many teams have legacy tasks that are unclear in terms of value. Review what occupies your team's time and prioritize client requests above all else. If certain tasks are crucial enough to justify hiring, consider them, but often, low-priority work can go unattended without consequence.

You can also listen to this episode: ERP088 - How MSPs Must Adapt to WFH for strategies to enhance your operations in a remote work environment.

I hope this helps if you want more info like this to help you be a best-in-class service manager. I built a course that trains owners and managers on exactly this type of stuff. You can check out the course here.