Cost of Internal versus Outsourced IT
There comes a point at most businesses when the benefits of in-house IT versus outsourced IT are considered. Sometimes this point is right at start-up, other times it’s at grow spurts. We frequently meet with business leaders who are re-evaluating their internal approach because a) their current IT employee/team is overwhelmed with tickets and needs additional support, or b) internal staff could be better allocating their time towards more pressing business needs. Cost is always a key factor in deciding what approach to take for managing IT but it’s important to take a closer look at the full costs of internal IT.
In addition to an employee’s salary, employers are responsible for the following costs:
- Canada Pension Plan Premiums
- Employment Insurance Premium
- Health benefits
- Vacation and sick days
- Hiring costs
- Employee training, onboarding and equipment
Add these costs on top of a $65,000 salary and the real cost of one internal employee is closer to $80,000. A Managed IT Service Provider (MSP) generally bases their pricing on the number of users, IT infrastructure, and complexity of the holistic IT environment.
In addition to monthly services, most mature MSPs also charge a new client onboarding fee. Onboarding is treated as a formal IT project and includes a dedicated team to get a new client set for live support.
For your typical small-medium-sized workplace environment, the base cost and onboarding fee is less than hiring an employee internally.
This doesn’t have to be an ‘all or nothing’ approach. Have a solid internal IT team but still struggling on bandwidth and capacity? Well we can step in to work with that internal IT team to deliver a hybrid support model. This gives your team more capacity and access to Nucleus technical resources, in addition to IT Services tools.
Interested in the full outsourced model? Check out more info below.
Other factors should be reviewed when deciding or re-evaluating your approach to IT management. Here’s a list of benefits to consider:
Employee turnover costs: What if your employee quits? You lose out on the substantial investment of hiring onboarding and training that employee.
Silo’d knowledgebase: All IT knowledge generally resides within this single employees head which creates a large knowledge-gap and can also be a concern for security and redundancy. A single person should never ‘hold all the keys to the kingdom.’
It is estimated that an employee with a salary of about $65,000 per year can cost about $12,000 to replace or up to 30% of an employees annual salary. FinancesOnline
Team capacity: A team of IT specialists offers a great deal more expertise and bandwidth than one or two employees.
Coverage: You can have access to a team 24/7/365 in a variety of roles.
Tools and technologies: With an MSP, you have access to a whole range of tools, like next generation antivirus/Managed Security Services (MDR, Managed Detection & Response), enterprise grade backup and recovery solutions, ticketing systems, remote control technology, monitoring/maintenance technology, access to vendor resources, and more.
Scalability: MSPs have more resources to assist with the changes of a growing business. From employee onboarding to office expansions, an outside partner is better equipped to manage these changes.
You get more!: For generally the same cost as one/two internal IT resources, you get access to a full team of IT professionals with different skillsets. You have a full team including resources that can deliver consulting, IT support, network engineering, solutions architecture and design, cybersecurity consulting, account management, IT procurement, and more!
If your business is out-growing your internal IT department or if your internal team needs more bandwidth, please contact us.