Contract Labor Buoys the Bottom Line in an Economic Uncertainty

Outsourced IT support allows cost-conscious companies to address time-sensitive new projects reliably and affordably.

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Finding and retaining specialized personnel to deliver IT offerings such as remote monitoring, help desk, or professional services has never been the easiest task. Yet attached services have long been a high margin source of recurring revenue for solution providers. Considerable opportunities lie in service areas like SOC or NOC operations, for instance. The SOC market alone stands to grow to reach a CAGR of 15.7% by 2026, according to researchers Mordor Intelligence.

As the market continues to transition toward a service-based, cloud-oriented transactional economy, it’s become more crucial to utilize qualified, reliable, and affordable technicians to execute cloud-based services. Yet maintaining a skilled in-house staff is even more challenging when the economy begins to show signs of instability, where many CEOs seek to tighten budgets through reduced staff.

Keeping these resources in-house gets prohibitive for several reasons. Companies must often invest considerable capital into training and certifying personnel to retain the most current, state-of-the art technicians. Plus, today’s workplace culture has gotten caught up in job-hopping trends like “quiet quitting.” In that light, an organization’s training investments may go by the wayside if a technician decides to leverage that newly-earned certification elsewhere.

The IT space is getting tenuous — mammoth organizations like AWS and Dropbox recently announced large-scale lay-offs due to the fluctuating economy. Also, when companies are faced with an urgent project, there is often little time to recruit extra staff. Outsourced IT support allows cost-conscious providers to address time-sensitive new projects reliably and affordably, empowering them to take advantage of fleeting opportunities. This strategy could be a lifesaver when it comes to maintaining the integrity of their brands and boost their revenues without having to invest in additional headcount.

Accommodating the Workplace of the Future

The greater reliance on contracted workers is more than just a cost-effective tactic, it’s a trend that points to the future of the workplace. A survey from payroll company Gusto revealed that businesses view contractors as essential to their success. More than 62% of those surveyed said either that their company’s success was dependent on contractors, or that they found it more difficult to run a profitable business without them. And this phenomenon shows no sign of slowing. An overwhelming 90% of respondents intend to maintain or increase their use of contractors. Data from popular freelance employment platform Upwork supports this claim, revealing that 60 million Americans performed freelance work over the past 12 months, or roughly 39% of the workforce.

Freelancing appeals to the next generation of IT workers and fits their emerging profile. A World Economic Forum report found that 73% of employees now desire permanent, flexible work options. Remote and hybrid work fosters productivity, presents fewer workplace distractions, and minimizes many of the stress drivers that exacerbate “Gen Z” workers’ mental health concerns.

It’s easy to see why the contractor economy is growing in the IT industry. Companies can instantly gain technicians with dedicated specializations and lucrative, targeted skills. This lets companies augment their own capabilities, providing compelling—not to mention high-margin—services offering.Even as it satisfies the work ethics of incoming Gen Z talent, contracted IT services make it that much easier for providers to transparently expand their businesses and grow their profits in a tight economy. If services are being rendered through the cloud, then the end-user has no knowledge as to whether the execution is coming from in-house players, or from a more economical contracted technician.

In this scenario, all that matters is that the business client is on the receiving end of high-quality services.

Sunny Kaila

Sunny Kaila is the CEO of IT By Design, the largest privately owned Master Managed Services Provider in America. He founded the company in 2003, growing it into a global entity with 700 employees serving small- and mid-sized companies across many industries. Today, it generates more than $10 million annually and has offices in India, the Philippines, and the United States.


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Sunny Kaila

Sunny Kaila is the CEO of IT By Design, the largest privately owned Master Managed Services Provider in America. He founded the company in 2003, growing it into a global entity with 700 employees serving small- and mid-sized companies across many industries. Today, it generates more than $10 million annually and has offices in India, the Philippines, and the United States.