Hidden Costs of In-House IT Staff

Hidden Costs of In-House IT Staff

Small and medium business owners are always looking for areas where they can save a few bucks.  Many business owners and C levels look at the expense of in-house IT staff as a cost center and simply live with it.  What they don’t realize is that there are many hidden costs associated with IT that can potentially be avoided.

Payroll taxes and employee benefits

Any full-time employee typically has a benefits package associated with their employment.  Cost of these packages can vary, but in the US, they typically cost between 20-30% of the yearly salary.  With an average salary of around $60,000 for a system administrator, most employers will pay around an additional $15,000 in payroll taxes and benefits.

There are definite benefits to having in-house IT staff that knows your systems intimately.  However, from a cost standpoint in-house IT staff is typically an inefficient way to manage your business network.  Strategic outsourcing of services that are outside of your core offerings in areas such as IT could represent significant savings for your organization.

Potential Labor Waste

One of the areas outsourced IT offers many advantages is in eliminating potential labor waste.  IT is a broad field that requires expertise in several different areas such as helpdesk, system administration, system architects, and potentially some specialists depending on the complexity of your network.

The business benefits greatly from having an experienced system architect give high level guidance and strategic IT planning.  However, those high-level services are only needed a small fraction of the time for most small and medium businesses.  That means that you have a very expensive full-time employee that only uses his knowledge and experience fully a fraction of the time.  The rest of his time is spend doing system administration or helpdesk duties that could easily be accomplished by a less expensive resource.

In addition, your need is rarely equally matched to your team capacity with in-house IT staff.  Typically, a quality helpdesk technician with the right tools can support between 100-150 users effectively.  If you have a staff of 60, you likely won’t have enough needs to keep an IT guy busy.  Alternatively, if you have 180 users you have more than one resource can handle, but not nearly enough work to keep 2 full time technicians busy.  The cost of this labor waste can be significant.

Outsourcing your IT allows you to eliminate labor waste completely.  You have a full staff of qualified technicians at your disposal in the exact quantities that your business needs.  You can have a high-level system architect on your team as well as other professionals, and they devote just the time needed.  This efficiency can translate into significant cost savings for your organization.

Continuous Investment in Training

Another area where we often see hidden costs with IT is in training your IT staff.  Competitive IT skills have a very short shelf-life. Old IT security strategies crumble as cybercriminals develop new attacks. Cloud best practices drastically change in only a brief time. Trying to keep pace with progress requires continuous investment, forcing your in-house IT staff to pick and choose what is a priority.

On average small and medium businesses will spend $1888 per employee on training each year.  In IT the cost of certifications in new technology can be even higher.

With an outsourced IT solution, the burden of training staff and paying their benefits rests squarely on the shoulders of the provider.  They train their people, they pay the cost of employee benefits.  You reap the benefits of their well-trained staff.

Lost Investment through turnover

Another hidden cost of internal IT is realized when your staff turns over for any reason.  All the certifications, conferences, seminars and other costs accumulate over time.  When IT staff leaves your employ, they take their training with them.

In addition, one of the main functions of IT staff is to be “experts” on your network.  They have an immense amount of knowledge about the configurations specific to your environment.  Unfortunately, they are not always good at documenting that information.  When they leave, they take it with them, frequently leaving a mess for the next person in line to sort out.

You can avoid these problems with an outsourced IT solution.  The best IT services providers train their own people, and carefully document your network.  If you ever part ways, they should have a complete set of documentation available for you to ease the transition.

IT Toolset Costs

Another cost associated with internal IT that frequently isn’t accounted for is their toolset.  Smart IT guys will want tools that allow them to automate certain routine IT functions.  They will also want a ticketing system to track progress on open issues, and tools to monitor the network.

All these tools are great and allow your IT staff to be more productive and proactive in their approach to IT.  They also come with a cost.  Internal IT departments can spend thousands of dollars a year on the tools they use.  They’re usually worth the cost because of the labor savings they offer, but it is still an additional expense which is frequently unaccounted for.

With a quality outsourced IT solution, the cost of these tools is built in.  Even better, the cost is spread across a larger customer base.  That allows your IT provider to give you the full benefit of their toolset and automation at a fraction of what you would pay for the same solution yourself.

The Argument for Outsourcing

A quality provider of outsourced IT support will be able to offer you savings in all the areas outlined above.  They can provide a full-service IT department for a fraction of the cost of internal IT staff in most cases.  They can also give you access to a fully qualified team of IT experts with a diverse skill set.

i.t.NOW has been around for 20 years handling IT for small and medium businesses.  We pride ourselves on crafting IT solutions that are fit to your specific business needs to eliminate waste.  Those solutions are scalable and built to grow with your organization.  Most of our clients recognize significant savings, with extreme examples cutting IT costs by over 50%.

We would love to consult with you on your business needs and see if we can help your business put a better IT solution in place and save on IT costs at the same time.