5 Hidden Costs of In-House IT
What are your in-house IT services really costing you? It’s not just your employee’s salaries, or even their salaries plus benefits. There are a host of other, hidden costs, that you need to take into account as you consider outsourcing for some or all of your IT needs. Here are five hidden costs of an in-house IT team to keep in mind:
1. Recruiting and Hiring
The last time you posted a position, any position, how many applicants did you have? Recent data puts this number at around 250 on average — and that was before COVID-19 put so many people out of work.
Whether you use a recruiter or not, there is a cost associated with digging through the avalanche of applications to find the few (typically four to six) you want to interview. And when you’ve finally found the right candidate, he or she may not stick around long, putting you right back where you started. The average tenure in IT is five years, with hot markets seeing turnover every one to two years.
2. Training and Ramp-Up Time
The day you finally find the right candidate for your open IT role can feel almost magical! Great background, fantastic personality and the right know-how… you did it! Then reality sets in because even unicorns need time to ramp up. In fact, it can take up to two years for a new employee to become fully productive.
Long after ramp-up is done, ongoing training is critical for IT roles. Information technology and cyber security systems change rapidly, and keeping up with training takes an investment of both time and money.
3. Sick and Vacation Time Coverage
If you are a small company with a one- or two-person IT team, it is very difficult to achieve coverage 24 hours a day, seven days a week and 365 days a year. Even with three or more techs, you run the risk of an illness taking the whole team offline for a while. That’s why in-house teams often use an IT service provider to cover support gaps due to illness, injury, vacation and even burnout.
4. Tools and Technology
An in-house or outsourced IT team needs tools to protect your network and minimize downtime. Tools are needed for:
- Data backup and recovery
- Ticketing system / issue tracking
- Asset tracking
- Network documentation and knowledge base
Purchasing these tools as a company can be expensive. And they can be time-intensive to implement, run, monitor and analyze. MSPs can purchase the same tools at enterprise levels and pass those discounts through to their clients at a nominal cost (e.g., $20-$40 per month per user).
5. Growth and Scalability
Few things are more painful for businesses than missed opportunities. This happens when your systems, processes and support can’t be scaled fast enough to let you grow in spurts. You get a huge order for a new client? Great. But your one- or two-person IT team can’t make the needed changes to your network quickly enough to take advantage. And the time and cost of adding new IT teammates can feel like “one step forward, two steps back” for your long-term growth.
Managed service provider (MSP) costs are usually based on per-employee pricing. So if you need to quickly scale up or down based on market changes, you can do so seamlessly and with moderate and predictable cost functuations.
If you are considering outsourcing for all or some of your IT service needs, don’t forget to consider these hidden costs. Check out this side-by-side comparison of other costs, including salaries and benefits. Or, book a meeting for a no cost, no pressure consultation to get a direct comparison for your specific business needs.
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