The surprising reasons why IT staff is often costlier than a service provider

The surprising reasons why IT staff is often costlier than a service provider

Business owners like to hire people smarter and more capable than themselves to do the jobs they can’t do well, if at all. It’s considered a good investment to spend money on human resources that will ultimately produce greater value for the company.

Related article: In-House IT vs. Managed IT Services: Pros and cons

Outsourcing IT services follows the same logic: What you spend on a managed IT services provider or MSP ultimately reaps greater value than if you spent your IT budget on internal staff. Here are five hidden costs that in-house IT incurs that can surprise business owners:

1.) Employee benefits and payroll taxes

If you’re a non-IT company, snagging your very own in-high-demand IT specialist is very difficult. Ever seen what top-tier IT companies such as Google and Facebook do just to attract and retain talent? Of course, nobody expects small- and medium-sized businesses (SMBs) to match the benefits those behemoths provide their IT staff, but even regular employee benefits are nothing to scoff at.

Health plan benefits, paid leave, and payroll taxes such as pension contributions and workers’ compensation are but some of the costs that come with full-time staff. In fact, according to the Conference Board of Canada, employee benefits alone often total an average of $8,330 per full-time staff member.

By partnering up with an MSP, you get to tap the expertise of IT staff without having to pay for their benefits and payroll taxes alone (i.e., all costs attributed to MSP personnel are dispersed across all of the MSP’s clients, making the overall cost lighter for everybody). Since MSPs guarantee minimum levels of service via contractual agreements, you end up getting service on par with a full-time staff for less money.

2.) Never-ending skills investment

Since IT develops at a rapid pace, IT specialists must set aside time to upgrade their skills and update their working knowledge of their field. Letting in-house IT staff learn on the job is common practice, but this means less time devoted to producing value for the organization.

Related article: IT problems only an MSP can help you resolve

Additionally, since IT is so expansive, in-house staff will be hard-pressed to keep up with every development that’s relevant to their jobs. Prioritizing learning some advancements means missing out on others, creating technical “debt” that only grows over time.

MSPs, on the other hand, have the capacity and resources needed to keep ahead of the curve in the IT landscape. Even if cybercriminals develop new malware and other nefarious strategies, MSPs are equipped to respond to them more quickly and much more effectively than undertrained and overworked in-house IT staff.

In fact, firms of all sizes have turned to us whenever their IT teams couldn’t resolve issues such as data breaches and network misconfigurations. This means that not only did they incur costly downtime, they practically paid double for IT staff — once for theirs, and once more for ours. It’s simply far more cost-efficient to partner with an MSP.

3.) IT hardware and software

Beyond salaries and other employee expenses, you must also spend on their equipment and software. IT staff need the latest, most powerful gear and tools to do the job properly, plus you must factor in maintenance and repair costs. Then add in initial license and renewal fees, updates and upgrades, and migration costs for when applications and systems reach end-of-life and are replaced with new ones.

MSPs spare you from much of this expense and effort so you can focus on managing your actual business.

Related article: Things to consider when setting an IT Budget

4.) Employee departure means lost investment and disrupted operations

Imagine spending so much of your resources on employee benefits, skills training, and certifications, then watching your investments walk out the door as they move to other companies. And if you failed to have them sign non-compete clauses, they may very well be poached by competitors who’d love an ex-insider’s view of your operations. (*all XBASE employees sign a confidentiality agreement that prevents them from sharing any customer data or information)

Replacing staff is a costly and time-consuming endeavor — you have to attract, screen, and onboard them — and still carry the same risk of investment loss. Furthermore, the time it takes to turn over responsibilities to new staff can mean disrupted operations.

An MSP mitigates such losses and disruptions by assigning many support staff to every project. That is, the provider never relies on only one person — there will always be technicians with intimate knowledge of your requirements who’ll ensure operational continuity for your business.

5.) Constant IT support and overtime

Many businesses run round-the-clock or require 24x7 support. This means that firms must either implement soul-crushing rotating twelve-hour shifts or have at least three employees do rotating eight-hour shifts. Either setup is usually too expensive for most SMBs.

Additionally, there will be instances when IT staff must work overtime, such as during and after data loss-inducing disasters or severe cybersecurity breaches. Even if you're paying employees overtime rates during these extended periods, morale will eventually sink and feet may head for the door.

Related article: What to Include in your RFP for Managed IT Services

Unlike in-house IT departments, reliable IT services providers such as XBASE Technologies confidently offer 24x7 support as their major selling point. Our team of experts is ever-vigilant, ready to address any and all IT concerns, whenever they may come your way.

To learn more about how XBASE can save you substantial IT costs, drop us a line. We’re ready to help your business level up with Exponentially Better™ IT services.