Internal First: The Most Undervalued Strategy in MSPs

You’ve made a commitment to grow your MSP, so you start breaking it down…

Security is still handled by “the one person who knows it all.”
Your QBRs are reactive and not strategic.
Projects are stacking up faster than your team can deliver.

You sit down with your leadership team. Everyone agrees: this cannot wait.

Someone says the line that always shows up in these meetings.

“We need to hire a senior for this.”

The next week is predictable.

• A job description appears with a neat list of skills and years of experience.

• You debate whether the role should be an engineer, an architect, or a lead.

• You talk to a recruiter and complain about how hard it is to find this talent.

Inside your MSP, at the same time:

• A mid-level engineer already handles most of the tricky pieces when things break in that area.

• Someone on the team has been quietly asking for more responsibility there.

• Another person has been building scripts, documentation, or workflows that are exactly what the new role is supposed to own.

None of that made it into the headcount discussion.

You passed “post the job” before you asked “who do we already have?”

This is not because you do not care about internal growth. It is because you do not have a clear, shared way to see internal capability and bet your execution on it.

Most MSPs do not default to external hiring because they lack talent.
They default to external hiring because they lack clarity.

Fix that visibility and internal first goes from a risky idea to an obvious operating strategy.

Why External Is the Default When Clarity Is Missing

In theory, internal mobility sounds great. In practice, most MSPs behave like this.

A demand shows up:

• Vendor or compliance pressure around security.

• Slipping project delivery, and no one clearly owns it.

• A desire to elevate client conversations and QBR quality.

The leadership conversation goes in a straight line.

• “We need someone to own this.”

• “We do not have that person today.”

• “Let’s hire.”

It feels safer for three reasons.

1. Job descriptions look clearer than your internal bench

You can write a neat list of requirements.

• Certain years of experience.

• Specific technologies or vendors.

• A mix of technical and client-facing skills.

You can send that to a recruiter, search LinkedIn, and feel like you are working on the problem.

Try doing the same exercise for your internal team, and the picture gets fuzzy.

• People do bits and pieces of different roles.

• Titles do not tell the whole story.

• No single tool provides a clear map of skills and potential.

So you trust the clean external description more than the messy internal reality.

2. Labels feel like risk management

External candidates arrive with labels:

• Senior security engineer.

• Cloud architect.

• Technical account manager.

Those labels make you feel like you are reducing risk. You can put them in the org chart and tell yourself, “This is covered now.”

Internally, everyone is some version of engineer, tech, or analyst. You do not see a label that says “this person is your next security lead,” so you assume they are not ready.

3. Internal capability lives in people’s heads

If you ask your managers

“Who could step into this if we really invested in them?” you will get some good names. But the process depends on which managers you ask and not backed by shared data or a consistent view.

When capability lives in a few brains and scattered notes, it is hard to trust it when the stakes are high. So you trust the market instead of your own bench.

External becomes the default, not because it is always right, but because internal is too unclear to feel safe.

How Much Capability Are You Leaving on the Table?

In most MSPs, internal capability is stronger than it looks in the org chart. If you walk the floor, listen to calls, or sit in on client visits, you will see it.

Mid-level engineers doing senior work in the shadows

• They are the ones who get called in when a certain client is on fire.

• They take over parts of projects when a senior is over capacity.

• They are already making decisions that look like the decisions you expect from the role you want to hire.

On paper, they are “System Engineer” or “Level 2.” In reality, they are already halfway into the next role.

Service desk technicians who behave like specialists

• They write the scripts everyone secretly copies.

• They build their own runbooks because the official documentation is behind.

• They coach new hires through tricky issues.

Their title says “Service Desk.” Their behavior says “future automation or platform engineer.”

Emerging leaders without the title

• In incidents, they start assigning tasks and organizing information.

• In client conversations, they explain things in a way people actually understand.

• People go to them with questions even when they do not “own” that area.

The capability is there. It just does not show up in the static views you use for planning and hiring.

Why you underestimate them

You underestimate internal capability because:

• You do not have a consistent view of skills and aspirations for each team member.

• Performance reviews are infrequent and formatted for HR, not for operational decisions.

• Managers keep mental lists that are never compared or refreshed in a structured way.

Over a few years, those mental models drift further from reality.

The story becomes “we do not have anyone who can do this” when the truth is “we do not have a clear enough view to risk giving this to someone internal.”

Why External Hiring Cannot Fix an Internal Visibility Problem

External hiring has its place. There are times when you genuinely need skills or experience you do not have.

But when you are short on visibility, not capability, hiring externally does not fix the root issue.

The expectation

You post the role, believing:

• This person will bring in the missing capability.

• The team will finally get relief.

• Someone will truly own this messy area.

You imagine a before-and-after in which this hire is the turning point.

The reality they walk into

If internal visibility is poor, the new hire lands in:

• A role that exists in a slide deck but not in daily behavior.

• A culture where work is assigned based on who people trust, not on a clear skills map.

• A team where potential successors and adjacent talent are invisible, even to them.

Two common outcomes:

• They get overloaded quickly because anything hard gets routed to “the new senior.”

• Or they stall because no one can agree what they should and should not own.

Your execution problems persist, and now you are paying more for the privilege.

The hidden costs

The extra costs go beyond salary and recruiter fees.

• Existing staff watch yet another senior title appear above them and think, “I guess that will never be me here.”

• People who have been quietly stretching feel like their effort did not matter.

• Mid-level talent that could have been grown into those roles starts to look elsewhere.

You did not just miss a chance to promote someone. You sent a signal to the whole bench about how growth really works in your MSP.

If you cannot see and deploy the people you already have, adding more people tends to multiply confusion rather than reduce it.

What Internal First Looks Like in Practice

Internal first does not mean promoting people who are not ready or refusing to hire outsiders.

It means you change the order of your questions.

When a new need or role appears, the sequence becomes:

1. “Who do we already have that could step into this with 6 to 12 months of focused support?”

2. “What would we have to move off their plate to give them a fair shot?”

3. “What pairing, shadowing, or training would that require?”

4. Only then, “If we still cannot cover this, what exactly do we need from an external hire?”

The culture shifts when people see that internal first is not a slogan. It is how decisions are actually made.

Workforce Orchestration: The Layer That Makes Internal First Possible

Here is the catch.

You cannot run internal first at scale if your view of your people consists of:

• A static org chart.

• Job titles.

• Sporadic review notes.

You need an operating layer that sits between your strategy and your tools.

That layer is Workforce Orchestration.

What Workforce Orchestration gives you

At a basic level, Workforce Orchestration means you have, in one place:

• Skills and capabilities, not just roles.

• Aspirations and preferred direction for each person.

• Capacity and load, who is overused, and who could take on more.

• Work patterns, who gets what, and how it goes.

And you use that information whenever you:

• Decide who should own a new area.

• Decide who should backfill when someone moves up.

• Decide whether you truly need to go to market for a role.

How it changes the internal vs external decision

Without this layer, “internal first” is a guess.

With it, the conversation changes from:

• “Do we have anyone who could do this?”

to:

• “We have two people who are one or two steps away. Here is what they have done already, here is what they want next, and here is what we would need to shift to give them the shot.”

Workforce Orchestration does not replace PSA, RMM, or HRIS. It connects what you already know and what your people are already telling you so internal options are clear and credible.

Execution improves when you modernize how you see the team. This is not a feel-good initiative. It is an execution issue.

Most people on your team are already trying to grow. They are reading, tinkering, and taking on a bit more each time you let them. They are already partway toward the roles you are posting.

If your system cannot see that and act on it, the business pays for it.

What modern visibility looks like

A modern view of your team looks like:

• A living picture of who can do what, and what they want more of.

• Lightweight but regular updates, not a big annual paperwork exercise.

• Staffing and planning meetings where someone can answer

  • “Who is right for this next step?”
    not just

  • “Who has time on their schedule?”

How this shows up in execution

When you have this view:

• Projects get staffed with people who can actually deliver and grow, so you spend less time rescuing them.

• Single points of failure start to shrink because you are always thinking in terms of “lead and next.”

• Training spend turns into capacity because deployment changes when someone learns something new.

Fix how you see your team, and you improve execution, hiring decisions, and culture all at once.

Five Moves to Shift Toward Internal First in the Next 90 Days

You do not need a new platform to start behaving ‘internal first’. You can start with deliberate habits.

1. Run an internal bench review before any external posting

Before you post any new role:

• Identify three internal people who could realistically cover most of that role within 6 to 12 months.

Ask:

• What would we move off their plate to free them up?

• Who could take on their current work?

• What support would they need in the first few months?

If the answer is “no one,” then at least you are going to market with your eyes open. If the answer is “actually, we do have someone,” you have just found a better path.

2. Create a “could be next” list for key functions

For areas like security, cloud, TAM, project management, and team leadership:

• List who is “in the wings” today.

Use input from:

• Service managers.

• Project leads.

• Your own direct observations.

Review it monthly.

• Has anyone earned their way onto the list?

• Has anyone clearly outgrown where they are?

• Where is there still no one in the pipeline?

This gives you a simple, visible internal succession view instead of relying on memory.

3. Link training to specific deployment changes

The next time someone finishes a course or earns a certification:

• Decide up front which work will change for them.

Examples:

• Certain ticket types move to them first.

• They take ownership of a slice of a project.

• They become primary or secondary for a certain client.

Make at least one concrete change within 30 to 60 days.

If training does not change deployment, it will not change your execution.

4. Design one specific shadow and handoff path

Pick one critical role.

• Security lead, cloud lead, senior TAM, or similar.

Name:

• One person as a potential successor or second.

In the next 90 days:

• Have them join key meetings.

• Let them own defined parts of the work.

• Debrief on what went well and what they need next.

This is how you build internal leaders on purpose, rather than hoping they show up when someone leaves.

5. Add an internal first question to leadership meetings

In your regular leadership or service management meetings, add two small questions:

• “Where did we go to the market first when we could have looked inside?”

• “Who did we stretch this month and what did we learn from it?”

When you do this, you are building a habit that your leadership team will adopt.

When internal first becomes part of your operating questions, it shows up in your operating decisions.

Internal First Is the Strategy You Already Paid For

You have already paid for most of the capability you say you need.

You pay for it in salaries, benefits, training, mistakes, late nights, and hard client lessons. The return on that investment depends on whether you can see what you built and are willing to back it.

External hires will always have a role. Some skills really are missing. Some gaps really do require outside experience.

But if every new problem triggers the same reflex to post a senior role, and your internal bench still feels like a black box, you are carrying more cost and risk than you need to.

If you are trying to shift toward internal first and want to compare what you are seeing with what I am seeing in other MSPs, I am always open to that conversation.