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escapekeyLooking at ramping up for the 2010 recession breakout? What should be the most important area of your business to focus on for the coming year? I would suggest looking at the most important commodity you have, your people. Understanding that a managed services company is in the business of providing SERVICE! Service comes from people and employee management is critical to a 2010 rebound. Many companies can automate areas of service delivery, but the bottom line is that clients are looking to develop a trusted relationship with their IT service providers.

Understand that many employees have been hanging tough through the recession. With little pay increases, bonuses or employee perks over the last 18 months, many employees have cabin fever. After the snow begins to clear, many employees will begin to see that the market bears more for their services than you have compensated them over the last year.

Understanding that turnover is a financial killer, many MSPs should see a cost savings by implementing some much needed employee programs. If this philosophy is coupled with a clear understanding of who MSPs hire, then the programs can become very clear.

How much does turnover cost? According to an article in Inc.com (http://bit.ly/8OYD95), turnover for a service employee can cost over 3 times their annual salary. There are many online calculators online to help understand real cost for turnover.

Who are MSPs hiring and building a company for? Information Technology is a business for younger employees by nature. The people in the field will typically be between 22 and 35 years old. Born from 1977 to 2002, Gen Y employees are looking for a great job, not for work to be their life. They are looking for a blended life, where work and home are more intertwined. USA Today has a great article on Gen Y (http://bit.ly/4wm3rT).

If we put the pieces together, we have a recession that looks like it is thawing, which means more companies are going to be looking to attract good talent. We can also see that MSPs are hiring Gen Y employees for support and service positions and that turnover costs can kill profit for any business.

2010 should be the year of happy employees! Over the next few weeks, I will look at specific areas where turnover can be mitigated. But to give some ideas, MSPs should be considering 9/80 schedules, work from home opportunities, company volunteer programs for community involvement and special programs. Special programs can be anniversary recognition, catered lunches, happy hours and dinner or weekend gift cards.

Applying focus on employee retention will create happy employees, lower turnover costs and will increase customer service and client referrals. All of this will increase profitability!