Jason Knight (00:08)
We've actually had quite a few clients where we've fundamentally changed our business because we've put in place the 30, 60, 90-day program, the daily disciplines.

encourage huddles and on video and it's changed the culture. And it's been fun to see that. But unless they're willing to adopt those types of practices, there's a good chance it's going to fail.

Andrew Moore (00:31)
That was Jason Knight, one of the founding partners of Scaled. They provide outsourced and staff augmentation to MSPs using South African resources. Jason is a pioneer in the MSP space. Jason has participated in building many managed service support companies. He's helped in coaching and mentoring managed service business owners and operators. He's a successful coach in the Evolve systems. And today he's going to talk to us about how to implement

staff augmentation into your MSP using international resources successfully.

Andrew Moore (01:04)
All right, getting started today. Today I have Jason Knight. Jason Knight is with Scaled. He's one of the founding partners of Scaled.

Jason Knight (01:16)
Correct.

Andrew Moore (01:18)
Love that. ⁓ And ⁓ he's going to be joining us today to talk a little bit about outsourcing with your MSP, what that looks like, how to use third party folks in order to put talent on your service desk, your projects team, all different parts of your MSP. So Jason, thank you for being here. where does the podcast find you today?

Jason Knight (01:23)
it.

Yeah,

So I'm in far southwest Texas near Big Bend. So we're going to talk about remote resources today. And I'm about as remote as you can get in the US. So out in a very remote area of Texas and come to you via Starlink. So yeah.

Andrew Moore (01:57)
All right, if we see any strange pixelation in your video or whatever, we'll know that no, it's Elon's fault. Blame Elon. ⁓ How did you get to this point in your career? Give us a little bit of background on you. How did you get here?

Jason Knight (02:02)
Yeah, that might fall.

That's right.

Yeah, so ⁓ Andrew, you and I have run into each other in the past, but I had an ITSP kind of pre-MSP days serving medium to large enterprise. ⁓ We did have an MSP element of it, and the Houston area expanded out to other parts of the country. And Andrew and his former team was also in Texas, so we were actually ⁓ cooperative competitors.

whatever the competition word we use, right? So we worked together quite a bit and sold that in front of me, there you go. then, yeah, so sold that company off and ran that role for a brief time and then ⁓ retired from that and started coaching and working on other things, including skills.

Andrew Moore (02:48)
Frenemies.

You

It's fantastic. ⁓ yeah, you know, Jason's been fantastic with some work we've done on coaching with our other MSPs on top of the work that he's been doing with Scaled. So it's just been a wealth of knowledge. I'm excited to pick your brain today about this and many other things if it goes in that direction. ⁓ So I wanted to start things off. So I'll kind of prompt us here.

Jason Knight (03:20)
You bet.

Andrew Moore (03:27)
I was one of those MSPs ⁓ where I had started.

Jason Knight (03:32)
Okay.

Andrew Moore (03:33)
doing MSP in the early 2000s, right as everybody was kind of moving towards outsourcing off offshore in a lot of the bigger businesses and they were building service centers and stuff in different countries around the world. they, know, follow the sun and all that sort of thing. And I saw a lot of quality issues at the time in the early to mid 2000s and

Jason Knight (03:44)
Yeah. Yeah. ⁓

Andrew Moore (04:02)
I really, as an MSP operator, I steered away from it because of my inability to control some of that and just the bad taste in my mouth that I got. then our market, there was a lot of folks that were just like,

if they picked up the phone and they got somebody on the other line that didn't sound like an American, so to speak, right? Yeah. Then there was an issue there. So a lot of that's changed, right? In the last...

Jason Knight (04:15)
Yeah.

Andrew Moore (04:30)
four or five years since the pandemic, can you kind of walk us through like, the quick history of like, where out-sourcing was and how we got to today and why it seems to be a little bit more viable than it was 10 years ago, 15 years ago?

Jason Knight (04:30)
Yeah. Yeah. Yeah.

Well, first off, want to

use the word outsourcing does kind of imply something different too. So we do staff augmentation, which is dedicated resources to your environment. So it's no different than hiring somebody ⁓ really in another part of the country or up the street. They're dedicated to your environment working for you. Outsourcing kind of implies that you've got this remote support desk that we roll over to at night or we are outsourcing our

a portion of our support too. And that's not what we do. These are individuals that you interview, you select, and they're dedicated to you. So we'll talk more about how that works. part of the reason that it became more viable was in part the globalization. The pandemic did push everything remote and really got to a point to where it didn't matter if they were in South Africa or if they're in Kansas. know, by and large, they're working remotely.

with your clients. So the locale was less relevant. Now it's about let's find the best resources we can and potentially save some money. But it's really not just about the money. We'll talk about that too. But it's kind of unlocked the potential for sure. So we do have some clients that have in the past done outsourced remote support desk and it's like a call center rollover. And I've definitely found that clients

don't respond well to that. And I'm one of them, right? If I call and I get ⁓ someone who doesn't sound local, immediately I'm envisioning there's a call center somewhere that really has nothing to do with the company I'm calling that's not really going to be able to help me. And this is kind of the opposite of that. This is someone that, yes, happens to be, in our case, South Africa, but they're fully a part of your organization. ⁓ we find that the client experience is very different.

than a support desk.

Andrew Moore (06:41)
So in the old model where, I guess you'll call it the early models of, you're doing staff hog, but in outsourcing for those old models, where did this new model kind of start to shift in? Where did you see that the opportunity existed in order to drive value versus what people had kind of seen as being something that was going to be a cost savings, but not necessarily result in higher client satisfaction?

Jason Knight (07:02)
Yeah, yeah.

Well, and I'll tell you what we typically tell to our prospects and our clients, don't bring us in purely for cost savings. Bring us in because you need great technical resources. And that is a reality, right? We push great technical resources primarily, and it just so happens they often are lower cost, 60, 70 % of the cost of a local resource. But we also say, you can hire local, hire local. But once you've kind of exhausted that,

then give us a call and we'll be able to share some great resources that might be a match. The reality is you do need local resources. You still need hands on the ground and be able to ⁓ go serve your clients in person. But there's a real case for the remote team to support most of what we do. So it's a hybrid blend of our clients that are most successful with it still have

US-based resources, and we highly encourage that, but have supplemented it with remote resources. And backing up a little bit on the why here, in my coaching experience, I've been coaching MSPs for a long time, 10 years or more. And through that, and Andrew, I know you've seen this, there are really two big things that hold back MSPs. And one is

sales engine that works and the second is operational capacity. I looked at both of those and said I'd love to solve them both, but I'm going to start on the operational capacity side and scale was kind of born out of that. We chose South Africa primarily because ⁓ you have English as the first language. You've got ⁓ very similar cultures. They listen to the same music. They watch the same movies. All the things that you would expect.

to, you know, for a team to gel well together, the cultures do mesh very, very well. And that's not true with every, every culture out there, right? But for the US culture in South Africa, they fit pretty well together. So we started there and found that we were really good at identifying level two, three, and four technicians. We don't source typically lower level like admins and L1s out of South Africa. We typically are focused on the

the ⁓ higher level, higher capacity ⁓ technical resources there. And I can share more about that too, if you want.

Andrew Moore (09:38)
Yeah, no, I'd like to dig into that because I think a lot of folks think that they want to have escalation tiers in their stable locally. But it sounds like there's an opportunity to look at bringing escalation tiers on in these other markets. Like, why would you decide to go down that road? Is it strictly financial for your business or is it?

Jason Knight (09:55)
That's one.

Well,

part of it is financial, but before financial, it's finding those resources. And I hate to say it, but finding a local resource with a talent that's not going to get poached, that wants to do the work, that's willing to work the way that you need them to and the hours that you need them to. We're finding that in the US, it's harder to find those resources. They're in high demand. They definitely often get pulled into

the enterprise space and to other markets, holding on to a really strong L3 and an MSB can be difficult. And we find that it's less so when we pull them in, we give them the opportunity, we pay them really well, we treat them well, and they tend to stay. And so it's not about one or the other, it's about we need a great resource, where is it to come from? And like I said, once you've exhausted, Moeck will give us a call and we'll...

we'll start looking at remote. For most escalation positions, L2, L3, L4 work quite well remote. Now, if you have project requirements, ⁓ we need to talk about what that looks like and how to supplement that with local resources. But we definitely have clients that have South African project resources and they do really well.

Andrew Moore (11:20)
why not the Philippines? Why not India? I is it is it I've seen other companies that are doing that. I know that you guys are focused in. You talked a little about about culture and and language. I mean, is that kind of where it's at? Or are there other pockets of places or outsourcing around the around the world that provide opportunity?

Jason Knight (11:32)
Well, sure, there are. Yeah,

there definitely are. And those markets are great markets also. ⁓ I would say the Philippines and India are markets that probably we don't understand as well, which is partly why we're not there. really understand the South African market, the employment laws, everything else that go there. But it's also about finding someone who has the problem solving ⁓ culture.

that matches well with your needs. for instance, I always say this, but if I give you a problem, are you going to ask me, how would you like me to solve that? Or are you going to tell me this is the way I'm going to solve that? Well, in an MSP, especially the higher tier, I don't need someone, an L3 to be asking me, how do you want me to solve this? I need someone with the initiative that's going to go do it, right? Or understands what's needed and knows how to pull together with the team to make it happen. Culturally, we're finding that

Our South African team tends to ⁓ be more of that, here's how I'm going to solve that. ⁓ Certain other cultures around the world, you definitely get more of that, how would you like me to solve it mentality? And it's certainly not across the board. It's vary greatly, but in general, that's what we've experienced. So that's part of the reason for ⁓ that. Now, I will say that ⁓ we've seen clients that have great experience

and the admin level and L1 level and even L2s with Philippines. ⁓ And those roles fit really well with the way they prefer to work. ⁓ But there are definitely time zone challenges and other things that come into that as well. But certainly, seeing great success in the Philippines also. Just like anything else, though, it's a matter of going through enough interviews and talking to

the team member really vetting them well, not just for technical capability, but the cultural integration. I ⁓ probably said culture 20 times already and culture is the core of the success here. I've absolutely seen guys that are just rock stars that have got great experience and they've got incredible ability and capacity, but there's not a culture fit there and it just blows up. And so we vet heavily for culture first.

And then we look at technical after that. And it doesn't matter where they are, local or not, that should be your approach.

Andrew Moore (14:02)
Well, in

Yeah, no, and that makes that makes sense. back to your point, like we're not talking about hiring people to to perform tasks. We're talking about integrated folks, right, which I think kind of boils down where the industry it's shifted from.

task based outcomes to team integration is does that? Yeah.

Jason Knight (14:26)
Yeah. Right. That has a lot to

do with it. Yeah. So if you think about when you think about outsourced help desks and call centers, it is very task oriented. It is pick up the phone. You you've got a script. There's a limitation of what you can do before you escalate. And in the MSP world, obviously, we don't we don't live by that. In fact, one of the reasons we also don't place a lot of L1s, I personally am a big proponent of

first call resolution. So if we can get an L2 to answer the call that has the ability and the initiative to solve the problem right there, the client's going to be much happier. We have fewer escalations. Operationally, we're more streamlined. That tends to be, in my opinion, better than a lower level L1 that is really just receiving the call, doing basic triage and passing it on to somebody else.

Andrew Moore (15:19)
Yeah, and I do want to at some point in later on in this conversation, I want to get into cost analysis on this because I think what you're saying sounds fantastic in theory, but I do want to dig into it a little bit. Not that I'm asking you guys to, you know, get into directly about your pricing, but just generally what, yeah, I want to dig into that. But before we move down that road, you know, we've started to talk about operational integration and

Jason Knight (15:35)
No, happy to share that.

Andrew Moore (15:46)
⁓ culture fit. And one of the things that I keep thinking about is how if I'm an operator, if I'm a service manager, how do I integrate people into my team that work in another country? Like, how do I manage the schedule, their time, their accountability? Like, what level of maturity do I have to have as a service manager in order to make sure that they're doing a good job and that I'm clear with what I'm seeing from them? Like,

Jason Knight (16:01)
Yeah.

Andrew Moore (16:15)
How do you overcome that when you're dealing with staff or an outsourced resource from another location like that?

Jason Knight (16:20)
It

is a great question. And it's true of not just StaffOgg, but if you hire somebody remote, you have a remote team member, you're going to experience a lot of the same things. So I'm a huge proponent of video always, always on video. And so there are lot of companies out there that we've worked with that will even do interviews with video off, right? That's just on audio. And it really ⁓ tells us a little bit about their

their maturity when it comes to remote teams, because reality is it's really tough to manage and engage a remote team member without some face-to-face. You've got to be able to read their expressions and see what's going on and have conversations. So first and foremost, video always on. Fully involve them in your environment, right? We have clients that ⁓ the team members are part of their Christmas party. They'll pull them around on an iPad or they'll bring them in some other way.

They're conferencing them in. They give them gift vouchers for, you know, go have a meal and they participate in their incentive based pay. just treat them like a team member, giving them the not just impression, but the understanding that they are fully part of their team. They just happen to be remote. And when you start kind of breaking that down to where they really are operating as part of your team, you'll find that your clients

really don't have an issue with them. You're talking to Johan, who just happens to be in Cape Town versus in Chicago, right? But it's easy to say, he's part of our team. He just isn't physically in our office. And they get over it really, really quickly. In fact, we have clients that ⁓ they prefer our team. know, the accent actually, in some cases, is a positive. They like talking to them. And so anyway, it can absolutely be done, but intentionality around

Andrew Moore (18:12)
Yeah.

Jason Knight (18:18)
integration, ⁓ you got to be careful not to forget about them. I do have a client that they were really hesitant about bringing us on. had a ⁓ resource in India they literally had forgotten about. went weeks without talking to this guy. And it was very much out of sight out of mind. But they were the type of environment where they were never on video. They didn't have huddles. They didn't have the type of engagement. They just had issued tickets and

assume things were getting handled. So we do some coaching and we highly encourage that you treat them like they're in a cube down the hall there. Just make sure that you're engaging with them virtually as much as possible.

Andrew Moore (19:00)
Well, I've seen two and some of the coaching engagements that I've done and some shared coaching engagements that we had together. And just in talking with the MSP space in general, I think there is a level of maturity that is required of companies that have remote workers, regardless of whether their staff or their local, so to speak, W2 employees. ⁓ I feel like.

having, you know, we've talked about this a lot together, you and I, these daily disciplines, weekly one on ones, measurement of outcomes from each individual and how they contribute to the team and to the company. I feel like if folks aren't doing that, they're like if you haven't done that yet internally, even like with your own service desk, if you haven't brought on a remote person, that needs to be something that you get nailed down before you bring on your first remote person, let alone

Jason Knight (19:31)
Yeah. ⁓

Andrew Moore (19:56)
somebody that you might bring on that staff hog in a completely different country like it or or am I off base like you were like nah man you can just jump in

Jason Knight (20:02)
No, you're

spot on in the sense that those are absolutely required. And I will tell you that when we first started the scale, we were really open to, hey, do need a resource? We've got a resource. And we found some common themes of failures. And what you just described was very high on the list. And so we actually vet clients more closely now in that if they are unwilling to adopt those practices,

we'll tell them, we need to be careful here. In some cases, we've actually said we're not going to place somebody there. And it's in part because we know the probability of success is low if you don't have those disciplines in place. Now, it may be an opportunity to create those disciplines and get them off the ground, and we'll coach you through that. We've actually had quite a few clients where we've fundamentally changed our business because we've put in place the 30, 60, 90-day program, the daily disciplines.

encourage huddles and on video and it's changed the culture. And it's been fun to see that. But unless they're willing to adopt those types of practices, there's a good chance it's going to fail.

And again, this has nothing to do with Philippines or South Africa or India. It could be anywhere. It's more about engaging a remote team.

Andrew Moore (21:17)
So all that sounds great until I realize that South Africa is six hours ahead of us or however many hours we're in central time here, like eight hours. So A, how do I deal with that? Do I have to do some sort of shift overlap? What do you recommend to people? Do they work on central US hours? How do y'all?

Jason Knight (21:24)
Seven right now, yeah. For me.

Well.

Yeah.

Andrew Moore (21:40)
If I'm looking

Jason Knight (21:40)
I can't speak for.

Andrew Moore (21:41)
at it as an MSP operator, what questions do I ask somebody like you to make sure that I don't fall into a trap where that bites me?

Jason Knight (21:43)
Yeah. So I know

that that's exactly right. Right. So that is one of the first questions that anyone asking, they should ask. And our team members, I can't speak for one out there, but for hours they work in the US hours. They work the clients hours ⁓ and they work the US clients holiday schedule. So a scale, we actually buy back the South African holidays that they end up working because they're on your schedule. So they get paid double time for it. They're happy to to ⁓

work those days. But it's something that's important to understand. South Africa has a lot of holidays compared to the US. We may have five to seven that are recognized. They may have 35, right? It's drastically different. We encourage you to be strategic about it. So we have quite a few clients that will actually have the team members start at

4 a.m. our local time to start triaging, prepping, do server work, to do things that off hours that make sense. And now you've got a strong technical resource that can get the day started and then hand off if needed or continue to work on it throughout the day. And they just simply end a little bit early. So ⁓ the time zone ⁓ can either match yours or you can be strategic about it and leverage it to your advantage. Not everyone can do that, but

But many, many do.

Andrew Moore (23:05)
Do you find that it limits the pool of available resources if you're like, you need to be on my eight to five schedule because I live in Chicago?

Jason Knight (23:13)
Not so much for us because we specifically vet for that. we are, if you give us a job description, we don't go look for that person. we know what a great MSP resource looks like. We're constantly vetting for them. And we have a bench that we provide for interviews and to kick it off really quickly for you. But all of those people know going into it, these are working US hours, working US holidays, they know what to expect.

We have had a few that we had to have conversations with. For instance, if they were a company in Alaska and another one in Hawaii, the time zone was so far off that we needed to figure out a smarter way to handle it. ⁓ typical four time zones, ⁓ you're in good shape there.

Andrew Moore (24:01)
So ⁓ I'm an MSP and I got a bunch of government contracts I FINRA, FDIC, like I've highly regulated things that I focus on.

Jason Knight (24:12)
Yeah.

Andrew Moore (24:13)
Is this a fit? Is there some sort of enclave that can be done? Like, what do you, what do you do when you're in the process of talking like I'm an MSP and I want help? Do I need to bring that up? Do I need to, it a problem? Like, how do I approach that when I'm looking for a partner to do this sort of work with? Like, what does that look like?

Jason Knight (24:30)
If that's 100 % of your business, it's going to be challenging. It's rare to run across an MSP that that's all they do. usually they'll have one or two contracts or a handful of contracts. The local teams will take those. The remote teams will take everything else. And so there's absolutely ways to handle that. But if that is your business, then it's going to be challenging to be remote, primarily because of the local

background check fingerprinting, the process you've got to go through for clearance is local. Now we do do background checks on all the team members, criminal and identification and financial, but obviously they're not going to come over here to fingerprint. So if that's a requirement, it can be a challenge, but we find that the vast, vast majority it's a non-issue or they have a strategy to deal with it.

One other thing with that, ⁓ we encourage you to make sure that they're working off company equipment. We provide equipment for our team members. ⁓ you're working with someone that doesn't do that, then by all means, either give them equipment or put them in a ⁓ VDI environment. We encourage you to keep your data local, right? So they're connecting in our local systems. And so from a data

standpoint that nothing's leaving the US. And so that addresses most issues.

Andrew Moore (25:54)
That's a really good point. you know, having to figure out, ⁓ you know, how to create certain geographic rules within your office and security stack, making sure that the right, you know, tools and equipment are sent over there in a timely manner, right? Like, what do you do if they have some sort of an issue with their hardware? I guess those are all logistical things that MSPs will want to consider before they move this ball forward.

Jason Knight (26:18)
They are. Yeah, but.

And I would be work with your provider on that. So for us, we buy equipment, local and country. If you ship something over, no matter where you ship it, if it's Philippines, India or South Africa, they're going to pay a premium and VAT taxes and customs and all that. So we actually had a client that sent a bunch of ⁓ branded wear swag to the team member. They were super excited about having on my board.

and the team member had cost them like $480 to get it out of customs. So it was a surprise, like, oh, that's quite a surprise. so we covered the cost on that and had a conversation with the client. Please use us for that. So we actually have teams that will work with you in all the brand and where and get it printed locally so that there's nothing getting shipped back and forth. We can buy YubiKey's, we buy whatever hardware you need, we can get it in country. So there's no

back and forth, but it's a real consideration. You got to be careful not to ship equipment. It'll bite you in the end.

Andrew Moore (27:23)
Yeah, no, that's good. I thought when you said we had a team, I thought you just had like mules. You had like dudes that had like big suitcases and they would like, we're like every, every month we mule a bunch of stuff over for our clients.

Jason Knight (27:29)
That's right. We know how to. Exactly.

Put it in the overhead van and the airplanes. No, it's bought in country. That's the easy part.

Andrew Moore (27:38)
Yeah.

Nice. what is the kind of the challenge that you hear from a lot of MSPs on eating the elephant, like how to get started operationally. Like they've made the decision that they want to explore this, but like, where do you see where they come to you guys and they're like, okay, I want to get started with this. What do I do? Like, and you're like, okay, hold on.

outside of culture and some operational process around managing that person. Like where are they starting? Are they doing this on projects teams? Are you saying, let's get a resource on the service desk. Let's start with the knock. Like where do you typically tell them this is how we're gonna start this procedure with you so we can get this right and be successful?

Jason Knight (28:20)
Yeah, almost

always we start with an L2 tech. Now, keep in mind, if I asked 100 MSPs what an L2 or an L3 tech is, I'm going to get 100 different answers, probably get 1,000 different answers. But we've defined what it looks like for us. You need to define what it looks like for you so you know what you're looking for. Put together a job description just like you would with any other role so you're clear on what it is you need. But we typically suggest you start with an L2, someone that

You've got infrastructure in place to manage them already, most likely. They're going to fit into a team, into a well-established process. It's not overly creative. It's making sure that you're clear on what the needs and expectations are. An L2 is an easy fit for that. If you want an L3 or something that's a little more dynamic after that, and after you've gotten your feet wet with an L2, then let's have a conversation on that. But start with an L2. Start with someone that

has someone to report up to that they've got a mentor assigned to them. And by the way, the mentor is not the person with the most time in their hands. It's the person you most want to replicate. If you give it to the guy with the most time in the hands, you're going to get two of those people. You don't want that. You want someone you want to replicate. But yeah, give a mentor. Make sure you have huddles. Make sure you have camera on. Make sure you understand the cultural integration, what that should look like. And then a 30, 60, 90 day plan.

is super critical. In fact, we won't place anybody without it. If you don't have one, we'll help you build one. But it's imperative because we've seen people that's like, hey, Andrew, welcome to the team. ⁓ Here's the ticket board. Go. And it blows up. No surprise, right? So the plan will help get them onboarded successfully.

Andrew Moore (30:06)
That makes a lot of sense. ⁓ If you can overcome the operational hurdles, which I feel like sometimes wind up, I think the operational hurdles are probably, in my opinion, the more difficult part of the process, which is just really figuring out how to integrate them and make sure they can be successful. ⁓ I think where a lot of operators get their hair on the back of their neck stands up as their boss, somebody will go back to a conference and they'll come back and be like,

we're going to start we're going to start working with people in South Africa, we're going to bring in some Philippines resources. And your first thought is like, my god, what do I do? Right? And we've addressed a lot of that. So I do want to circle back to why do the owners get so excited when they come back from a conference talking about that they're gonna they're gonna bring in outsource resources there. The staff hog folks, why Why is that a thing? Like, is it

Jason Knight (30:40)
Yeah.

Andrew Moore (31:02)
Like is it a cost thing? it is it a ⁓ plug and play thing? Like what what are you telling people at it nation to get them so excited about coming back and messing up my it operations? Like what what are you saying?

Jason Knight (31:03)
What?

Yeah, it's a bit more.

Yeah, by the way, we meet with the SCPG, which is an evolved group, which the service leaders and they get equally excited by the way. It's not just the owners, but we are a bit of the easy button. If you've ever gone through a recruiting process, you understand how arduous it is, right? Going through thousands and thousands of trash resumes, people who are not qualified for the job to find the diamond in the rough. And we, we do all the heavy lifting. We say we do three things really well. We provide.

highly vetted level two, three and four technicians. We do make it simple. We take on all the HR, the backend, all the employment stuff that is really not fun and all the recruiting and management side of it. And then we do it with integrity and legally, meaning that we employ them legally as employees. They're not contractors to us, they're employees and are placed on a contract to you. But because they're employed by us, being directed at your environment, it gives you the opportunity to

leverage them fully as a technician. If you contract them directly or you bring them on from someone else that's a contractor, there's employment classification laws and all kinds of things that become really sticky. So the fact that we do it the right way is, by the way, it's probably the least profitable way to do it and the hardest way to do it, but it's the right way. And that's something we stick by. But it's critical. ⁓

And if you were to bring on someone remotely yourself, it gets really tough.

So unless you hire a recruiter or you've got time and energy to do it, ⁓ you're going to need some help. But that's part of it. The other is finding a qualified resource that's ready to hit the ground running ⁓ is

is pretty rare. And then of course, cost, in some cases, not every market is the same, but it's 60 to 70 % of the cost of a local resource. So we said we're going to talk briefly on cost. share a little bit of that with you. It tends to be like an L2 is about $32.50 to $42.50 a month, a flat rate. Again, that's a South African resource. L3s are in that $4,000 to

5,000, 6,000, depending on their qualifications. So it's not a, ⁓ there's not like a standard price for every single person. get priced based off of their, their skillset and compensation levels, but it is a fixed cost to the, to the client. So there's some, attractiveness to that too. It's, it's, again, it's the easy button. We can add people to the team that hit the ground running, predictable cost and tend to be lower cost than ⁓ local resources.

Andrew Moore (34:04)
Do they, ⁓ so do they impact the, the balance sheet or anything differently because they're, you know, you know, or from, from a P L perspective, they're not labor against W two. Like, do they look better? Like if you're in the process of trying to drive valuation for your business, do you want to try to use outsourced contracts like that? Or is it not negligible? Does it make a difference?

Jason Knight (34:04)
That's the big point.

Yeah. Well, it

no, no, it is beneficial on a few, a few senses. One is ⁓ turnover. It's if you can get a stable resource, this longer term looks positive cost wise. Obviously, if it's 70 percent of the of the cost of a local resources, there's some there's a bit of gains there for sure. ⁓ Now, I'll tell you that it can go the opposite, that if you are contracting them.

without doing it the right way, I have seen buyers who have actually come in and said, you got to clean that up before we're willing to talk to you. So it's imperative that you go through the law and do it the right way, use an agency or some way to do it legitimately ⁓ if you're going to bring in a remote resource because that can potentially impact ⁓ a deal.

Andrew Moore (35:22)
Say more. want to

understand what you mean by not contracting the right way. What is the pitfall for people who are contracting that may not know that they're doing it the wrong way?

Jason Knight (35:34)
If you're paying the resource directly, that for sure is you're basically paying a contractor as a contractor, but treating them as an employee. So their employment classification issues, both in the U.S. and in the country that they're coming from, most likely. There's tax issues, there's potential penalties. There's lots of things that you don't want to go down the path. So first off, how are you paying them? How have you brought them in? ⁓ The second is the agency you're working with.

Are they employees of that agency or are they also contracted them? In which in case you may also have a similar issue. So it's really just making sure you're doing it the right way. can use EORs similar to a PEO. You can use an agency like Scaled. But paying them directly is most often a flag that, hey, this has not been handled correctly. Treating them

as an employee paying them as a contractor is a problem. That's true locally as well.

Andrew Moore (36:39)
Is there any,

is that any different, like you're doing it based on, you know, I'm only paying them 10 hours a month versus I'm paying them full time and I expect them to be available all the time. Like, mean, what's the, what's the balance there?

Jason Knight (36:47)
Sure, yeah,

if you're genuinely bringing them on as a contractor, in other words, you're not directing their work, you're not requiring them to use your systems and your tools, you're not telling them what to do, you're giving them a task and they go do it and come back with results, right? So if ⁓ they truly are acting as a contractor, it's...

less of a concern. It's those that are bringing them in and they're dedicated to their environment, working alongside of your team. That's a different situation.

Andrew Moore (37:22)
All right, that's good to know. I was unaware that there was, figured however you wanted to pay people is how you wanted to pay people. I wasn't sure from that perspective, what's your contact.

Jason Knight (37:31)
Yeah, no different than here, right?

You can't, you can't, you could not bring in a technician and say, hey, I want you to work on our connect wise and our environment and, and use our tools. I want you work in eight to five, but I'm to pay you as a contractor, right? The, the, start running into tax issues and, and, again, employment classification problems by doing that. And again, no different internationally other than now you've got two, two countries that are going to look at you in particular to be issues.

Andrew Moore (38:02)
All right. That's that's good to know. ⁓ And then like what I mean from an ownership perspective to like it seems like the easy button ⁓ where they get very, very excited about it. You know, what owners also like about it. Does it I mean, I guess when you're talking about it being like $5,000 a month, like let's really get into the nitty gritty of

what it costs to keep an employee in the United States if you're going to hire them W-2, like you know, you're talking about healthcare, all that, like is all of that factored in, you guys are handling that for the employee on the other side, but like when you're talking about $5,000, like that's it, it's a service fee versus like all of the administrative back end, like just kind of break that down a little bit for people who may not be following.

Jason Knight (38:31)
Yeah, it is.

Correct. ⁓

Correct.

Yeah, so if the resource is five grand, which would be an L3, ⁓ the US equivalent tech, whereas that's a 60k a year, think of it in those terms, that's all in, fully burdened. A local L3 of similar ⁓ capabilities would probably be in the 90 to 100k range. It depends on your market, some cases more, maybe a little less, but probably not much less than that. Fully burdened, you can assume another 15 % on top of that. Yeah, there's cost to having

employees, right? Whereas with this model, they're as fully baked in. Now, we encourage you to treat them like your team. So it's very common for them to receive bonuses and incentive pay and those kinds of things. Those are on top of that. But those go straight to the team member. At least for our company, don't take a slice of that. We just convert it and put it on the payroll. those would be above and beyond, but that would be anyway.

So from a cost standpoint, again, that's where we see that around 60 % to 70 % of the cost of a local resource is about right, depending on the market. Sometimes it's a lot more, sometimes it's a little less. But that easy button also plays into the fact that bringing somebody on can be very quick, but also releasing them can be fairly quick also. So we don't.

We don't provide people for short-term projects. They need to long-term engagements. But if they're not working out or you just lost a big client, depending on the state you're in, it can be very, very difficult to let somebody go. With us, 30-day notice and they're done and they roll off. Or if it's for cause, obviously it's immediate termination and we deal with the back end issues around what a termination looks like. You don't have to mess with that. So the HR side, we do PIPs. We handle all the challenges.

When I say easy button, it really is not just easy button of bringing them on and off boarding them, but also in between. You've got an HR team that helps you manage that resource if needed. So that's typically why they come to us. Yeah.

Andrew Moore (40:51)
And I guess one of the questions.

Jason Knight (40:53)
We can bring them on easily if we need to release them. We can release them easily. It's predictable cost. we've got back in support to to make sure we're doing it right and offload some of burden. So it it's the easy button. Side of it, I think that gets the owners excited. So that was your question. I think that's.

Andrew Moore (41:12)
Yeah, that's really helpful information. guess the question that I've got is something I wanted to touch on before we start to wrap up here is you talk a lot about what we call visible work, which is the stuff that you do for a client that is right in front of their face, patching and automated tickets and those sort of things are

the bread and butter of kind of the service delivery work that happens in the background, they're not necessarily visible. You talk about visible work. Can you break down visible work for those who aren't familiar with the term that you've used? ⁓ And then once you've finished talking about it, I wanna kind of poke around the edges of how you see the staff augmentation working on...

Jason Knight (41:49)
Yeah. ⁓

or do you think that's a good work mean, I that's way to the business, because it's whole different conversation, and it's not just business. Sure, yeah, and pretty obvious, right? I mean, within an MSP, you've got a lot of back-end stuff that the proactive side of the business tends to be less visible, right? The reactive is very visible. It's work that you're doing, working directly with a client, and communicating with them, engaging with them directly.

Andrew Moore (42:04)
with the service delivery team in regards to like the delivery of visible work right so can you just talk to us a little bit about what visible work is.

Jason Knight (42:31)
⁓ Those are the things we tend to get credit for. We don't often get credit for the less visible or the ⁓ proactive side of the business, right? So, ⁓ you know, making sure that obviously you've got the right resource that communicates well, that's going to ⁓ follow procedures well, that those are defined, that the client experience is going to be consistent on that, the visible side of what we're doing. so,

Obviously, you don't want the slide the pizza under the door kind of guy typically handling that type of engagement with your clients. You want someone who's got a client facing personality that's engaging, that ⁓ is ⁓ able and willing to follow process and procedures. It is typically a different resource. And so we often vet for where they're to fit and making sure that the job aligns with who they are, not just they've got the technical. ⁓

experience to do the job. more to it. So don't know if that answers your question there or not.

Andrew Moore (43:32)
Yeah, no.

Yeah, and maybe it poked around the edges of it. think what I'm trying to get to the root of here from an operations standpoint is when you're bringing on a staff aug there are certain things like new employee onboardings for your client or important projects that are going on within their client organizations. Do you feel like those staff aug resources are

Jason Knight (43:53)
Yeah.

Andrew Moore (44:01)
the right folks to be a part of that sort of delivery or they better served working kind of around the edges of those things? Are they spearheading that? Like where do you see them get placed where you find the most success?

Jason Knight (44:15)
Well, I want to say for our team, it's across the board. And we have team members that are ⁓ client facing. In fact, a lot of our clients have shifted the first line call answering to our South African team. it is nothing, no issue there with that very visible direct engagement with the client.

Onboarding, offboarding is something that you and I have talked a lot about. That's something I know for a fact that MSPs lose clients over that. We'll put a coaching hat on for a minute that we tend to, if you ask your technicians what the most important things to our clients are, I bet you they would default to answers that are not what your clients are thinking. Yes, uptime, infrastructure, all those good things that we expect, those are kind of keep the lights on, but the things that they recognize are

timely onboardings or timely off boardings,

So I think to answer your question, I think there's not a kind of pigeonhole for remote resources necessarily if assuming you vetted them for the right culture and the you ⁓ know, the right job that they're fitting into. Nothing wrong with client facing engagements.

tell me what you're, how you're defining visible work.

Andrew Moore (45:34)
⁓ so for me with visible work, it's, it's the stuff that gets you fired. Like, I mean, I guess I could, I could try to make it sound better, different than what it is, but it's the stuff that gets you. Yeah. Yeah. It's, it's. Yeah. Not getting it to a VIP ticket. It's, ⁓ you know,

Jason Knight (45:45)
Yeah. No, no. Okay. Well, then we're on the same page there. It's direct engagement. Yeah. Exactly. Well, ⁓

Andrew Moore (46:00)
somebody that shows up ⁓ looking like a slob, it's ⁓ not answering the phone and it rolling over to voicemail four times in a row. It's the stuff that when somebody is looking at you, they're like, I remember that. It's not, we didn't get a backup last night. It's all the other stuff.

Jason Knight (46:10)
Yep.

Exactly. Well, ⁓ so briefly on that, I do know ⁓ remote resources, just like local resources can be great at that or terrible at the visible work, right? It really comes down to do you have clear processes? you you set clear expectations? And is it the right person to do that job? And that's not a geographic answer. It's really an individual answer.

We want to make sure we vet for that. But those things do keep clients and those things lose your clients as well. And I can't emphasize enough how often I see onboarding and offboarding as a non-priority, just another ticket in the queue. I can take a quick example of that. There was a client I was speaking to that on the coaching side, none of the staff oxide, where a ticket came in for a new onboard.

It got kicked around. They didn't get the PC set up on time. Monday morning was a new CFO starting for the company. So the CEO was ⁓ very aware that they had a new CFO that they had sold on the idea of coming to work for him. He shows up and now the CEO is embarrassed because they don't look like they have their act together. Well, where does that roll down to? It rolled down to the MSP because they didn't prioritize that ticket correctly. And it really came down to they just saw it as another

task to be done and not one that was business impacting. I ⁓ will say partly it's the resource to make sure you have the right person. But in part is making sure you've got an internal culture that prioritizes that visible work and that you really, really emphasize how to handle those tickets. ⁓

Andrew Moore (48:03)
Yeah, that makes total sense. What is the one thing that you want everybody to kind of glean from your experience in providing these services to folks?

What do you want people to think about? What do want them to know?

Jason Knight (48:14)
I think. ⁓

That's a tough one around staff aug specifically. I think in part, don't think of it as staff aug. Don't think of it as an outsourced partner as much as bringing on great talent into your environment. It doesn't matter where they're from or how much they cost. That should be your priority is do they fit who we are and are they the right person? And the second is kind of has a little bit of a counter ⁓ answer to this and that.

As much as we would love to give you great resources, before you go and add resources, this is something Andrew and I talk about a lot, is making sure you fully understand your utilization, your capacity. Is there automation or are there opportunities for AI and other tools to streamline what we're doing to create capacity before we hire somebody? The answer shouldn't be just hire somebody. It should be, how do we create capacity? And in doing that, how do we serve our clients better? If you've done that, you've exhausted that.

We know for a fact we need a better resource, then great, let's bring them on. The second part to this is when you know that you're not picking from the best of the worst, that's one issue that we see a lot of MSPs are reluctant to manage their people because they know this guy may not be great, but if you lose them, we're stuck. It's going to take us six months to find a good replacement. When you know you've got a pool of talent that is ready and waiting,

It allows you to be more directive. It allows you to be ⁓ a little stricter with implementing policies and procedures. Make sure that you're operating at the level that you should be. So you're pursuing excellence. You're not accepting mediocrity. And that's something we've all fallen into, that he may not be great, but he's better than not having somebody. And if you find yourself in that type of mentality or thinking,

make sure that you know you've got an out and allows you to manage people the way you should.

So there you go.

Andrew Moore (50:21)
No, I love that. That's great. That's great

advice. That Jason, thank you so much for your time here on the on the podcast.

Andrew Moore (50:28)
All right. So let's get started with our five questions. What is the best book that you have ever read that helped you with business? So it can be a fiction book. It can be a nonfiction book. It can be like it could be.

Jason Knight (50:41)
Yeah.

Andrew Moore (50:42)
It could be Harry Potter and you're like, got this great lesson out of this book. Like what is the, your favorite book?

Jason Knight (50:47)
You know,

I kind of go through cycles where I like them all, you know, good grades. Obviously, everyone's read that. And Making Money is Killing Your Business and all those books that kind of reinforce some of same principles. Right now, I'm kind of nerding out on financial history. So I'm reading 1929 about the Wall Street crash. And that's been fun and a little terrifying. And yeah, it's good stuff.

Andrew Moore (51:08)
Yeah

Jason Knight (51:14)
Yeah, if you like history at all, and if you're interested in how the financial system works and you kind of get into the nitty gritty of how things kind of came apart, that's a great read for sure.

Andrew Moore (51:28)
You're a very, I would say, Puritan is not the word I want to use, but I would just say that you're a very humble man. And I have yet to hear many bad words come out of your mouth. But if you had to pick a bad word and you don't have to say the whole thing, because I know sometimes it comes out. What's your favorite one that you use in whatever context? What's your favorite bad word? What's your favorite curse word?

Jason Knight (51:52)
I'm a pure it in there for no pure it in for sure. You know, I don't curse very often. So when I do it has ⁓ it's got got some punch behind it. So I'll drop the F-bomb occasionally when I do it. ⁓ They know that I'm serious about it. So I reserve it for appropriate use. I think if we cuss all day long, it kind of loses the impact.

Andrew Moore (51:52)
You have one?

I'm like...

Jason Knight (52:22)
I like to reserve it for the right moment.

Andrew Moore (52:23)
That's That's

fair. I've had a guest on that uses it ⁓ somewhat like I do more as like salt and pepper. And so it doesn't nearly have the oomph that it would. But I like holding it in your back pocket. think that's a good I think it's a good move.

Jason Knight (52:36)
I

dropped an F-bomb the other day when I was not happy about something specifically and everyone's eyes got huge and it got really quiet. So that's the impact I'm looking for.

Andrew Moore (52:50)
Yes.

I love it. I love it. No, it's great. And like I said, I just, I've never heard it come out of your mouth. So that's why I was like, I don't even know if he, he may not even know bad words.

Jason Knight (52:54)
That's okay.

Well, if you do, then

we have something to talk about.

Andrew Moore (53:03)
Fair enough. That's good to know. All right. What's your favorite? I should say band or artist, musical artist, favorite band or musical artist and why? You have one?

Jason Knight (53:15)
I'm a child of

the 80s, growing up in high school and junior high and in the 80s. So all the 80s rock and Bon Jovi and all that, I love. I still nerd out on that. I love Michael Jackson's and the classics and Motown and all that too. I will tell you though, it's really embarrassing. I've been nerding out on AI cover of classic rock and different rock music.

Andrew Moore (53:27)
Okay.

Jason Knight (53:44)
And it's really good. I've got a list of AI did it better. And it's pretty amazing. So like country version of Michael Jackson songs or Eminem and Motown versions of it. It's just fun to Something completely different.

Andrew Moore (53:50)
⁓ s-

Yeah.

No, it's I listened to so for my generation, I'm more of a 90s guy. And so Stone Temple Pilots, somebody did there's a guy on and he's like, if Motown did it and he does all these covers and there's a version of Interstate Love song that the guy does and it's awesome. It's so good as if it were a Motown song. Yeah.

Jason Knight (54:17)
Yeah, that's what I'm talking about. That's exactly

what I love it. I love it. So yeah, again, embarrassing to admit, that's ⁓ lately I've been listening to a lot of AI music, which is probably not good for the artist or anybody else, but still.

Andrew Moore (54:27)
Yeah, well.

It just, it's somebody keeps sending me this like a meme. It's like, this is why like Ram is so high. It's because of like Sora and, and yeah. Yeah. Yeah. Yeah. For sure. ⁓

Jason Knight (54:33)
Bye.

Yeah, right. All the crazy videos and just nonsense stuff.

Andrew Moore (54:48)
what is your worst sales call client meeting, ⁓ personnel meeting that you've ever had in

Jason Knight (54:56)
You have lots and lots of interactions with with business owners and employees and not too many of stand out. A few do, but they're not like super, super impactful. But there's there is one that back in the late 90s, I had a tech that worked for me and a sales guy that worked for me. And both were, I'd say, kind of slobs.

Both were smokers. The tech had a Suzuki Samurai with a trashed out rag top. He was a phenomenal tech, he was a little loose with his ⁓ organization in hygiene. And they went to go meet a client. I wasn't there, but I got to hear afterwards from the client and from those two. They show up to the client late. They pull into the parking lot, pick the only open spot they could find, and they...

They ⁓ start walking in and unfortunately the tech, I guess he threw out a ⁓ candy bar wrapper on the ground, which mortified that they even did that. But they're walking in, both smoking, they're late. They pulled in, he just trashed, threw trash in their parking lot. And he walks up to the door and the ⁓ client's office is, unfortunately the conference room they were meeting in, everybody was waiting for them, were all sitting there with glass windows.

looking out them and they see you met him at the door and said first off you're late second while you parked in my parking space third you just you just littered in our our parking lot turn around and leave and so apparently they they turn around they leave and they get in his Suzuki Simirai and it won't start and if you know anything about Suzuki it's it's like a little tiny four banger really light car so they have to push start his stick shift Suzuki Simirai in the parking lot with everybody watching

Andrew Moore (56:30)
You

Jason Knight (56:47)
Anyways, needless to say, we didn't win that deal. We did not look good in that situation. But may forget story afterwards. So it might have been worth it.

Andrew Moore (56:48)
That's us.

my God,

that's fantastic. That's fantastic. Yeah, I love that. I wanna feed that into AI and see if it can make a video of that.

Jason Knight (57:07)
make a video of it.

I'm sure he could. Absolutely.

Andrew Moore (57:11)
We might, we might try that. I might try that. All right, last question is if there was somebody that you thought was really, really, really awesome in the MSP space that should be on the podcast, that would be worth a fresh take, somebody worth talking to. ⁓ Is there a particular person that you know of that you might make the recommendation that we try to reach out to?

Jason Knight (57:13)
haha

Yeah.

You know, obviously, ⁓ Reid Warren, you and I both know and his team, Greg, to talk about ⁓ R &D tax credits. I would definitely suggest that. That would be a good direction to get it down. ⁓ Operationally, there's a few folks that Bobby ⁓ Soder is one that

Andrew Moore (57:47)
Yes.

Jason Knight (57:54)
that has worked with a company that went from five to 10 to 20 to 40 million. And he served in multiple roles, but most recently in the sales leadership role. And he'd be good to bring on as well. And I'm happy to get you connected there. yeah, and now he's actually helping coach sales teams. And so he can share with a little about what he's seeing there as well. plenty, plenty out there to choose from.

Andrew Moore (58:11)
Yeah, that would be great.

I love that.

Jason Knight (58:24)
So I love working with folks that have been there and they can reflect back on what got them through that and the lessons that you as business owners or senior owners need to understand to get to the next level. So I'm with you. I love talking to ⁓ great resources in this industry. There's so many to choose from, but some have been there and done it and are willing to share their secrets.

Andrew Moore (58:51)
Yeah, it's been a great ride that I've been on for the last 20 something years. And I could not be more excited about you being on the podcast and you sharing your information with the team out there on what it means to be it's been an honor to work with you and it's been great to have you on the podcast. I just want to say thank you and I look forward to continuing our conversation offline.

Jason Knight (59:08)
Likewise.

Sounds great. Thanks for having me. And if anyone wants to talk more, let me know. Happy to help them out further. ⁓

Andrew Moore (59:20)
we will make sure that we get all your information up so people have a chance to reach out. So thank you again, Jason.

Jason Knight (59:24)
All right, thank you.