Are You Spending Too Much on In-House IT?

As a business owner, it’s a top priority to ensure you’re making the most of your IT budget. Services like cybersecurity and IT support are critical to functioning day-to-day, so this isn’t a topic you should take lightly.

If you have an existing IT department, you may not be aware of the unnecessary expenses you’re incurring on a monthly basis. Are you leveraging  your budget effectively? Are you paying more (or less) than you should for critical functions? To help you answer these questions for yourself, here’s a guide on what in-house IT should typically cost and why.  

How Much Does IT Support Cost for a Small Business?

The cost of your IT staff will depend on several factors, including:

• Your geographic location
• Your benefits package
• Your budgetary flexibility
• The current job market and other influences
• Remote work vs In-person flexibility

According to the Bureau of Labor Statistics, the average annual wage for an IT professional (including job titles like “Computer Network Support Specialist”, “Database Administrator”, and “Computer User Support Specialist”) is in the ballpark of $100,864.55.

Hiring Costs of Bringing on In-House IT Staff

When you bring on staff, the upfront costs of hiring vary from business to business. You may choose to offer a sign-on bonus if you’re urgently hiring. After the pandemic, many IT professionals prefer to work remotely, so some companies offer remote work stipends for home offices.

In addition, it is wise to invest in company-owned devices for greater cybersecurity, as Bring-Your-Own-Device policies put you at high risk for cyberattacks. If you have an established work from home model, this is especially true for video conferencing.

To read more about the dangers of allowing staff to use their own devices to remotely call into meetings, check out our blog: Bring Your Own Device & Video Conferencing: Don’t Jeopardize Your Data.

Salary Expectations of IT or Cybersecurity Professionals

The BLS lists the following job titles and average annual salaries for IT professionals:

This information can be accessed via the Bureau of Labor Statistics website here. Some markets may vary, and ultimately you decide what pay your IT staff. However, if you want to find the best of the best talent on the market, it’s best to be prepared to offer competitive pay unless you want less experienced candidates.

Benefit Costs Associated with IT Employees

“Benefits” are defined under the following categories and corresponding percentage of employee compensation that they cost employers:

• Paid leave – 9.2%
• Supplemental pay - 5.3%
• Insurance – 6.6%
• Retirement & savings – 3.4%
• Legally required benefits – 6.3%

Some legally required benefits you’re likely aware of include social security & Medicare (6%) federal unemployment insurance (.1%), state unemployment insurance (.3%), and workers compensation (1%).

Assuming an average benefits rate of 31% of total annual wages, benefits costs ranged from around $19k to $42k. This brings the total annual cost of one IT employee to around $131,930.83.

These numbers are approximate, and are meant to give you a general range of what to expect when hiring an in-house IT employee.

Cost-Benefit Analysis of Hiring In-House vs Managed IT Services

IT support is as crucial as an HR representative and as indispensable as a department manager. This is because they lead your technology innovation while securing your business from mounting cyber threats. In this way, your business is only as productive and secure as your IT department allows.

This means IT is a worthwhile investment. However, if you have only one or a handful of professionals managing your technology in-house, you’re limited to their personal areas of expertise. This pokes a hole in their ROI, especially since finding candidates with multiple crucial specialties can be difficult.

Not only are these unicorn candidates hard to find, they can be difficult to retain due to the competitive salaries other companies offer.

Technical support providers, on the other hand, charge per user per month. This makes these services ideal for smaller businesses with fewer seats. In addition, many companies specialize in small business managed IT services.

To read more about IT service plans and the benefits of managed IT services for small businesses, read our blog: How Outsourced IT Services for Small Businesses Are a Secret Weapon For Success.

As for MSP pricing, expect a per-user cost ranging from $150-200 per month. To learn more about the ins and outs of managed technology services and their cost-effectiveness, read our blog: How Much Does Managed IT Support Cost?

When Are Co-Managed IT Services a Good Fit?

Some businesses opt for a “hybrid” IT strategy that involves their in-house IT department collaborating with a managed IT provider. This is a good option if you want to keep your IT department but still want access to the resources of an IT management company.

To read more about the similarities and differences between in-house and outsourced IT, and how they can work together, read our blog: Outsourced Managed IT services VS. In-house IT support.

How to Get the Most Out of Your IT Budget

When you’re planning your business’ technology, you should include items like a technology roadmap to keep your tech stack up to date. After all, the costs of outdated or faulty IT are exponentially higher than both an in-house tech or outsourced IT services.

If you’re ready to level up your It strategy and catch any discrepancies that could be weighing on your budget, click the button below to speak to an expert about your business.