Why Are Field Service Costs Skyrocketing?

By Wael Mohammed, EVP of Strategy, Field Nation

At this point, it’s no secret: costs are up across the board in the field services industry.

Virtually every part of the field service space is feeling this cost hike. Travel costs are up. Labor costs are up. Equipment costs are up.

In general, technical resource costs are up 8%, with some variance based on type of work and Service Level Agreement (SLA) turnaround. That’s not great news for managed service providers that depend on skilled labor to provide core offerings.

One factor is an increase in labor costs, which are rising across all industries. According to the U.S. Department of Labor, the average wages of private-sector workers increased by 5% over the course of 2021. Not surprisingly, that rate is higher in the information technology space. In 2021, the wage growth for IT workers who switched jobs was 12.2%. This number aligns with the field service space, where labor costs have risen about 8%.

Higher demand for IT services is playing a role in increasing field service delivery costs, but the dramatic rise is also being driven by the fact that much of this work is maintenance-driven and therefore comes with a stringent SLA. As the SLA responsiveness window tightens, the pay rate goes up.