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Cost Considerations of In-House IT Professionals vs Managed Service Providers

Whether you should source, hire, train and maintain in-house IT professionals, or use a Managed Service Provider, is a long-standing debate. In the end, the decision comes down to your budgets, preferences and circumstances. But getting to that decision point takes a lot of consideration.

The Biggest Consideration: Cost

Of course, any business decision is mainly guided by its effect on the bottom line. And it’s often the consideration around which there are many misconceptions. For example, many companies look at the salary costs of IT professionals and compare them to the costs of contracting a managed services provider (MSP).

Of course, it is impossible for an MSP’s rates to match the salary rates of in-house IT professionals. MSPs have to pay their staff as much or more than end-users because they generally hire more qualified and experienced people.

But there are cost considerations beyond salary versus hourly MSP costs.

The Real Cost of Hiring In-House IT Professionals

Most companies don’t consider all the costs of maintaining an in-house IT team versus using an MSP. The following are just a few of the added costs of in-house versus MSP IT support, in addition to their salary.

  • Sourcing and vetting job candidates
  • Contacting and interviewing job applicants
  • Onboarding successful candidates
  • Training specific to your systems
  • Payroll costs
  • Sick days
  • Holidays
  • Pensions
  • Other benefits costs

The Real Cost Savings of Using an MSP

Similar to not considering the real costs of hiring and maintaining in-house IT teams, many companies don’t consider the cost benefits of using an MSP.

You Only Pay for What You Use

Your MSP may offer different pricing structures, including those based on numbers of users, or flat-rates per month. In any case, you only pay for the service level you need.

Get The Right Skill Sets

Of all the costs of hiring in-house IT staff listed above, none include what happens if your hires are over- or under-qualified. With MSP’s, you don’t have to pay for someone to learn more, or for someone who isn’t willing to do certain tasks.

Scaling is Easy

Business disruption is the new normal. It means boom times for many businesses and realignments for others. Scaling isn’t as easy with in-house IT teams. Yes, you can hire as needed, but you go through all the costs of hiring every time. And downsizing has its own complications. With MSPs, you can scale your IT support capacity with a phone call or email.

Use Your In-House Resources for What They Do Best

Many of the costs of hiring and maintaining IT staff take personnel away from their usual duties in the company. An MSP completely eliminates the need for anyone in your company to divert their focus from their main role.

Use a Combination of In-House IT Professionals & MSPs

Of course, no matter what the bottom-line numbers say, many companies will maintain in-house staff for a variety of reasons. However, if those companies would also like to take advantage of the benefits offered by MSP, they can combine the two.

To learn more about using an MSP, check out our article Should You Outsource Your IT Project Management?

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