Founder & CEO
Managed IT vs Hiring? Which is better? We were shocked when we broke down the numbers. Take a look at the real costs of hiring vs outsourcing with our quick guide.
When it comes to something as important as technology, you can’t afford to cut corners. But as a savvy business leader, you also can’t afford to spend too much. And a mistake in the realm of technology can be oh so costly: data breaches, expensive software and systems you never use, burdensome IT contracts.
To avoid costly mistakes, you consider the costs of possible solutions and what those solutions offer your company. Only then can you determine which is the better move for your company. But sometimes those costs are less than clear. They’re impactful but harder to lay a finger on. Managed IT vs Hiring IT staff? Which is better for your company? Is it cheaper to keep IT in-house? And which delivers the best ROI? That’s the question, isn’t it? Here’s a break down of the numbers to consider.
When you keep IT in-house, you’re responsible for all the recruiting, training and human resource management. If you don’t have the right experience in-house, you have to hire. If you lose an experienced employee and have to replace them, that cost is yours.
On average, you’ll pay around 20% of a mid-level employees annual salary to recruit and train a replacement. And if the person you lost was highly specialized, you could end up paying a lot more… 213% of their salary or more. If you have high turnover, it causes more turnover as people feel overworked. This could quickly get out of hand.
When you outsource your IT management, you work with a company that has invested in the broad spectrum of expertise needed. Those people are available to you. You don’t have to hire them or train them. Those costs are on the Managed IT company. You’ll get a greater variety and a deeper level of experience through managed IT.
Managed IT vs Hiring. Managed IT: 1 Hiring an IT team: 0
With employees, on average, you’ll pay around 46% of an employees’ salary on extra benefits. And in the current job market where employees are ghosting employers on the first day, the costs to get and keep good people is even higher.
And let’s not forget overtime. A Stanford study found that employee productivity drops dramatically after 8 hours in a single day. You end up paying time and half for less productivity. If you want to find out how to save on IT services, you can do so by stopping the practice of paying more for less. Period.
With managed IT, these extra costs are on the Managed IT company. And it’s easier for a managed IT company to avoid excessive overtime while increasing 24/7 availability because of the flexibility and scalability of their structure.
And speaking of productivity…
When you hire a team, you must pay them even when there’s nothing for them to do. All businesses no matter how tightly run experience this phenomenon. It’s not easy to perfect staffing for the unexpected.
A managed IT company has teams dedicated to different clients. If one client experiences a dip in need, people can be easily be shifted to deliver better service to a client that is experiencing greater demand. In this way, resources are continually optimized. A managed IT company can manage the day-to-day and develop strategic plans that allow them to scale quickly to meet your unique demands.
The average single hired IT specialist with 5-7 years of experience will cost you around $55,000-60,000 + benefits per year. That’s for 1 person. Your department will likely need 10, 20 or more with a broad range of experience and salary requirements to effectively meet your IT needs.
With managed IT, you generally pay a monthly rate, which gives you access to people with many types and levels of experience. They can always put the best person on the job because of the wide level of experience within a managed IT company.