Is it Cost-Effective to Hire an In-house IT Person?

Is outsourcing cheaper than in-house?

Are you considering hiring an in-house IT person? If so, it’s probably due to these two primary reasons:

1: Your company has outgrown whatever IT help you’ve had. Perhaps you’ve gone from a home-based start up to an office, to a bigger office, to your own free-standing building, and the casual or occasional IT services you had before aren’t cutting it anymore.

A lot of businesses have someone on staff that ‘knows some stuff’ about computers, which may be fine when you have three or four stand-alone workstations, but once your company grows – doubling or tripling the number of workstations and adding a centralized server to handle the need for file-sharing and better communication, these individuals quickly find themselves in alien territory and become overwhelmed.

2: You’ve been through the mill with non-responsive outsourced ‘IT guys’ and you want somebody there at all times.

Often, the problem is not that you need an in-house IT person. Many companies, especially from start-up, go with the cheapest options for IT. They quickly find that you get what you pay for. Before you start interviewing IT services professionals for a spot on your staff, take a look at the most critical factors:

How to choose the right candidate: Do you know what to look for - what to ask? The interviewing criteria are subjective for each company, but it may require a little homework to figure out what you need to look for. According to Glassdoor, these are minimum requirements:

• A bachelor’s degree in information technology, Computer Science, Information Systems, or a related field, or equivalent experience
• Minimum 2-5 years of experience working in IT operations
• Prior experience leading and managing large IT projects and rolling out IT infrastructures across various technologies
• An excellent working knowledge of computer systems, security, network and systems administration, databases and data storage systems, and phone systems
• Effective critical thinking and decision-making skills
• Proven project management skills and a strong ability to prioritize
• Thorough knowledge of IT infrastructure and operations best practices

But that’s not all. Along with the above, you should see solid references from their time working in IT. An HR person with no IT experience may need help evaluating their ‘working knowledge’ of all things IT related.

It doesn’t matter how qualified your applicant ‘appears’ to be. Here at ITFIRM.COM, we interview many, many candidates who look ‘okay’ on paper, but fall apart during questioning. It’s a rare IT person who has a thorough knowledge of everything. With an array of talents on payroll, the best MSPs know when your dedicated technician and backup tech need the help of a specialist and assign the appropriate person.

The full cost to employ: This can vary depending on the criteria involved in the calculation, but PolicyAdvice gives the national average salary range for a qualified IT professional as between $75,000 to $100,000 per year.

Consider this seriously: If you are interviewing a candidate that is eager to accept the $40,000 (or less) that you’re offering, it means they are probably underqualified to go after even the average paying jobs in their industry.

But it’s not just about base pay. Next, add any company benefits on top of the salary and everything kicks up a good notch. According to a study by the U.S. Bureau of Labor Statistics, the average cost of employee benefits in 2025 accounts for 29.4% of the total cost of hiring that employee.

Examine the technical setup costs: This can be minimal or maximal - it depends on your size and how much you value employee productivity.

Minimum setup: This usually means no monitoring or remote repair capabilities. Just an IT support person sitting at a desk waiting for something to go wrong (it will).
If you have only fifteen workstations (which doesn’t even warrant an in-house IT person), you may be willing to put up with a scenario like this playing out:

Your IT person gets a phone call from Karen that she can’t access something or can’t print etc. The IT person walks to Karen’s desk, sits down, and starts troubleshooting, at which point Karen’s productivity stops cold, and if she spends the time chatting with co-workers, their productivity becomes impaired as well. Now multiply this by at least a dozen times a day.

Maximum setup: You have enough employees to warrant a true IT person or team, so your IT support is set up like an outsourced MSP. This generally only happens with a minimum of sixty workstations to manage. The minimal scenario above becomes untenable at that point.

This means you are going to need some expensive things: Ticketing systems, multiple data backups (at least one in the cloud), remote monitoring software in each controlled device – with an overriding RMM (Remote Monitoring and Management) suite, several ancillary IT management and reporting tools, licenses, and subscriptions, among others. Even without the best in automation and artificial intelligence (AI) these costs add up quickly.

What are the benefits of outsourcing IT for MSPs?

When considering a Managed Services Provider (MSP), it’s important to find out if they have invested in the best versions of all the tools an internal IT Department needs and has defrayed that cost over their entire client base. You must pay for all those tools just for your own company.

Your MSP’s team is on your account 24/7/365 – even if you have employees that want to work on Christmas or New Year’s Day. The MSP is there for you - no vacations, no sick days, no family emergencies. A far cry from an internal IT person,

Now let’s compare the costs:

The average per-user cost for the entire gamut of MSP benefits runs about $100 to $125 per user per month. Let’s use the $125 figure

15 users x $125 = $1875/mo. / $22,500 per year
60 users x $125 = $7,500/mo. /$90,000 per year

Compare the annual 60-user cost of $90,000 for an MSP to the annual cost of employing a fully qualified internal IT manager:
Salary:                   $75,000
+             Benefits:              $21,726
Total:                     $93,726

And that’s just for ONE PERSON, with vacations, sick days, etc.

And that’s before you get to the hardware/software setup and maintenance costs. Depending on the situation and number of end-users, figure on average between $10,000 to $30,000 dollars for the initial setup and ongoing licensing and subscription costs., and you are paying over $100,000 to $120,000 dollars for ONE person who works 9-5 Monday Through Friday only.

When you choose an MSP, you get a fixed budget for a team that will ALWAYS be on the job – and will know more and be much faster than your internal IT person. The MSP will never take sick, personal, and vacation days off, you will never have EDD unemployment claims, no HR difficulties.

In effect, you become John Connor protected by The Terminator of IT: It will always be there for you and will never, ever stop.

Think of it this way: If you want a donut, you don’t need to buy a bakery.