HR for MSPs: Essentials of Critical Human Resources Topics
Most MSPs have little formal training in human resources. Nonetheless, running an efficient MSP HR operation is critical for all but the smallest of MSP businesses. Unless you’re a one-person MSP working for yourself, then you have employees, which means that you need an HR operation to hire and manage them. With that need in mind, this article provides an overview of MSP HR basics.
It discusses the essentials of critical HR topics like hiring, employee onboarding, and employee retention, with a focus on how these processes should work for MSPs in particular.
MSP HR: Where to Start
The best time to start MSP HR planning is before your business becomes large enough that it actually needs HR. Your goal, then, should be to think about your HR requirements and strategies before you begin hiring your first employee.
Questions to consider include:
- Will you outsource HR? Some MSPs outsource hiring and employee management to dedicated HR firms. This is always an option; however, as a general rule, keeping HR in-house will give you more control and makes sense for smaller MSPs, provided you have the time to oversee HR operations yourself, and are willing to acquire the necessary expertise.
- Which employees do you need? MSP HR operations should be tailored to the types of employees you will hire. Determine what the job duties of your future employees will be. Will they be technical roles, or less technical ones, like sales? You’ll need this information before you can start processes like hiring.
- How will you run HR operations? Which platforms will you use to advertise jobs, manage payroll and perform other HR tasks? Explore the options ahead of time, so that you are well informed when it comes time to set up your MSP HR “software stack.”
Further reading Hiring New Employees: 6 Essentials Steps for MSPs
Hiring for MSPs
The process of hiring a new employee may seem daunting if you have little or no experience in the role of employer. How do you find the right candidates? Where should you post job ads? How do you select whom to interview when you receive many dozens of applications? These are all questions that MSPs may struggle with if they have not hired employees in the past.
However, MSP HR is a straightforward process, especially if you think of it in terms of what’s known as the hiring funnel (or recruitment funnel).
The hiring funnel refers to a series of steps that you go through in the MSP HR process as you find and select a new employee. It includes six main stages:
- Generating awareness of your opening.
- Garnering interest in the position from qualified candidates.
- Collecting applications.
- Selecting which candidates to interview.
- Conducting interviews.
- Making a hire.
Using the hiring funnel concept, you can structure your hiring process in an efficient way. You can also establish a timeline that identifies how long each stage should take.
Further reading Hiring Funnel for MSPs: How It Works
Conducting job interviews
Conducting job interviews can also feel like an intimidating task if you lack experience on the interviewer’s side of the table. However, it’s critical to ensure that your interviews allow you to assess candidates accurately, while also conveying a positive image of your company, so that candidates will be eager to accept a job offer if you make one.
The foundation for hosting an effective job interview is preparation. Make sure you are familiar with each candidate’s resume before the interview; this not only avoids wasted time asking questions that are already answered on the resume, but also helps you send a message to the candidate that you are an engaged and organized employer.
Be sure, too, that you know all of the details of the position before you conduct interviews. You don’t want candidates to ask questions about job duties that you can’t answer, for example, lest you appear disorganized.
It’s also helpful to go into interviews with a basic script of questions to ask. However, don’t feel that you need to stick too rigidly to the prepared questions. Sprinkle in follow-up questions based on the candidate’s initial responses to the main questions, or other questions that seem relevant as the interview progresses, even if they are not part of the script.
When assessing candidates’ performance in interviews, keep in mind that the accuracy of their answers to questions is only one factor. Especially in the case of technical questions, a candidate who is put on the spot may not give the best answer, but that does not mean he or she would not be able to arrive at a better response if given more time. Thus, don’t fixate on the accuracy of a candidate’s answers alone, but think also about how they communicate and analyze problems. A candidate who can articulate a solid plan for resolving a problem whose solution he or she doesn’t know immediately may be just as qualified as someone who knows the answer off the bat.
Onboarding a new employee
Interviewing and hiring employees is only one part of integrating them into your team. You must also be prepared to perform an onboarding process to ensure that the employee is able to get up and running quickly when he or she starts the job.
The onboarding process should start before the employee’s first day at work, and should continue until he or she is a well-integrated part of your team. The process can be broken into three stages:
- Preparation: Before the employee’s first day on the job, prepare his or her workspace, complete all necessary paperwork and identify milestones that the employee should plan to complete during the first weeks at your company.
- Training: During the first three months or so on the job, the employee should undergo a training process that ensures that, by the end of the period, he or she is able to perform all required tasks independently.
Further reading On Training Employees: Is It Worth the Risk?
- Review: At the end of the training period, perform the employee’s first formal review. This is a chance to identify any lingering challenges that should be addressed, as well as to emphasize the employee’s successes since joining your company.
Further reading Guide to Efficient Employee Onboarding for MSPs
Because hiring and onboarding employees requires a great investment of time and resources, you want to be sure they stick around. Several factors can help to optimize employee retention:
- Company culture: Whether your MSP business is small or large, strive to develop a company culture that prioritizes transparency, support, communication and other assets that make employees feel valued, while also encouraging productivity.
Further reading How Your Employees Can Contribute to Your MSP Business
- Compensation: Setting the right compensation for employees is essential in retaining them for a long period. Establishing the proper starting salary is important in this respect, but so is creating advancement paths that employees can follow in order to increase their earnings, and gain more prestigious job titles, if they remain at your company for a longer period.
Further reading MSP Sales Compensation Plans — The Catalysts of More Revenue
- Benefits: There is an opportunity for employers to be creative with their benefits in order to maximize employee retention. Don’t think in terms of just the basic ones, like medical insurance, but consider also benefits like gym memberships or funds for personal technology purchases. These sorts of offerings don’t cost you much as an employer and can reinforce the feeling among employees that they are valued.
Further reading MSP Employee Retention: Three Areas of Improvement
If you own or manage an MSP business, it’s probably because you like working with technology, not being an MSP HR specialist. The reality, however, is that any MSP business that wants to grow needs an HR operation in place. And, although key aspects of HR, such as hiring and employee retention, may seem difficult to manage if you lack formal training in HR, they are feasible to conduct on your own, as long as you master the concepts and best practices associated with them.