Significant worldwide improvement on wage inflation projected for 2025 in most regions
Service Leadership Inc., a ConnectWise company, today announced the early findings from its highly anticipated 12th Annual IT Solution Provider Compensation (Remuneration) Report™. The comprehensive report delves into compensation insights for over 50 key positions within IT solution providers (TSPs), offering an authoritative resource that enables TSP leadership to benchmark, strategize, and optimize their compensation strategies for their businesses.
A record number of TSPs worldwide participated in this year’s survey. The report provides insights on target annual earnings (TAE), projected raises, bonuses, and compensation across management, sales and marketing, and technical roles including service desk, field technicians, security, project, and network/systems engineers. This data offers insight into market pay rates for each role and measures inflation’s impact on said rates.
Early findings from this year’s report, to be released in March 2025, show wage inflation peaked in 2022, with TAE increases materially decreasing in 2023 and staying relatively stagnant in 2024. In 2025, TAE increases are planned to be lower than 2024 actual increases, suggesting a return to historical norms.
“Our findings from the compensation survey show a material improvement is projected in 2025 for wage inflation for TSPs in most regions worldwide,” says Peter Kujawa, EVP & GM, Service Leadership & IT Nation. “In 2024, there was improvement but not to the degree we saw in 2023. 2025 is projected to improve the most since 2023.”
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Additional key findings on wage inflation and TAE worldwide, include:
- Best-in-class TSPs (top 25% most profitable) are planning on roughly 3x less as many employees (9.9%) receiving top-level increases of over 6% as the bottom quartile profitability TSPs, who are planning top-level increases for approximately 29% of employees. Best-in-class TSPs are also planning 31% of their employees to receive increases of 3% or less.
- Value added resellers (VARs) are anticipating even lower increases than managed service providers (MSPs). Best-in-class VARs are planning on nearly 41% of employees receiving increases of 3% or less.
- Wage inflation is proving to be more stubborn in Europe. It stands out as the only region not planning on more than a 50% decrease in employees receiving top-level increases of over 6% in 2025 versus 2024. However, Europe is significantly increasing the percentage of low-level increases by 3% or less from 31.6% to 41%.
- The US and AUS/NZ (Australia/New Zealand) lead the way with the largest planned increases in the 3.1% to 6% tier, with 63.3% and 57.0% employees respectively. For AUS/NZ, this is almost 16% more than in 2024. These increases in mid-level raises are due to declines in top-level raises in both regions.
- Canada stands out as the region with the lowest planned increases of any region, with only 7% of employees receiving increases of 6% or more and 42% receiving 3% or less.
As a resource for TSPs to remain competitive and foster transparency across the industry, the full report will also shed light on the staff-to-management ratio of top profitability of TSPs by business model, the allocation of incentive pay for each position and seniority level, and the earnings of owners based on specific business models and company sizes. In addition, new for the 2025 report will be details on full-time employee churn rates for all positions.
The Service Leadership Index Annual IT Solution Provider Compensation (Remuneration) Report is widely recognized as the leading source for TSP-specific compensation data and compensation strategies of top-performing TSPs. The final report will be available for purchase at a price of US $1,999 in March 2025, but as a token of appreciation, those who took part in the survey will be the first to receive a complimentary copy upon its release.
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