The Real Cost Between Outsourcing IT and In-House

Technology is expensive and in this rapidly developing business world, success won’t happen without it. When it comes to managing your IT, making the right decision between directly hiring and outsourcing can be challenging especially for small- to medium-sized companies.

Let’s take a look at the hidden cost associated with hiring in-house and the cost-effective benefit of outsourcing IT services.

Hidden Cost Behind Hiring In-House

There is always an eternal debate between hiring in-house and outsourcing. Some are holding to their in-house IT support because they fear change or are afraid to let go of these people who hold such access to their data.

We’ll break down the unseen expenses businesses deal with when it comes to in-house IT departments for a better understanding of the real cost of in-house:

Cost of Recruitment

Hiring a team of in-house IT professionals is more than just the salaries. The process of recruitment onboarding, training, retraining, and certifications will cost you time and money. Note that certifications are necessary to ensure that your employees are up to date with the latest technology and your company won’t fall behind the curve.

There is also the payroll, health insurance benefits, and other administrative fees related to paperwork. You can also include the cost of procuring IT equipment and additional office furniture.

Turnover Cost

One of the unseen expenses around in-house is the cost of replacing an employee. Research shows that the average job tenure of the rising millennials in the workforce is three years. If your company is looking to hire people with more qualified skills, then the salary package should be competitive.

Aside from the increase in the employee wage, there is also a cost included in decreased productivity. New hires can take time to adapt and get to the productivity level of the previous employee. Additionally, there is a cost of disengagement among other colleagues within the same department that you should consider.

Downtime Cost

Compared to outsourcing from Managed Service Providers (MSPs), in-house IT departments can’t guarantee 99.9% uptime. According to a study, 25% of small businesses said the hourly cost of downtime for their business is around $20,000 - $40,000, which is a significant amount.

Downtime generates business disruptions and decreases the productivity of employees, making it a major challenge for SMBs today. This doesn’t include the possibility of losing important data, failed backups, or security breaches that can happen during downtime.

Hardware and Software Costs

The expenses don’t end once you acquire the necessary computer and software tools to manage your internal businesses. The continual cost of upgrades to hardware and software happens often, not to mention the time spent monitoring and ensuring the effectiveness of these tools.

To have an efficient managed IT system, you are required to have the right toolset and it won’t help if you are under-spending on IT. You won’t be able to retain a competent IT professional if the working environment is substandard and they can’t reduce potential risk proactively.

These expenses can quickly add up and you may find opting for an externally provisioned service more cost-effective and scalable.

Comparison between Outsourced IT and In-House IT

Financial Benefits of Outsourcing IT

Managed IT Services allow your business to have the right resources that provide financial benefits. Aside from improving customer satisfaction and refining your organization’s agility, here are a few more ways an IT Service Provider can bring financial benefits to your company:

Infrastructure Expenses

When you outsource your IT to an MSP such as Uniserve IT Solutions, you can downgrade the amount of infrastructure on-site and move it to your MSP's data centers. This doesn’t only save you cost on hardware, but also on the energy and the space you need to house it.

Additionally, you will realize the money you can save on licensing, consulting, training, and monitoring.

Expert-level Support

We always say this, time is money. Problems with your IT can stall projects, and the time spent on solving these is money down the drain. When you partner with Uniserve, you can have immediate access to experts who can solve your IT problems, getting you back on track in a matter of minutes.

Outsourcing IT brings numerous skillsets to the table, which is beyond the capacity of one or two in-house IT members.

Scalability

When you partner with an MSP, you will be able to scale your business up or down with no complications. As your business grows, so does your IT support structure. So, even if you are hiring an addition of 5, 10, or 20 more people, your provider can still support them.

Managed IT Services allow your business to have flexibility, especially in your business’ early years where there is significant growth and things can change at a moment’s notice.

As small- to medium-sized business owners, you want to make sure that you’re getting the service you pay for. With Uniserve as your partner, you will get proactive support, improved security, the latest software, technology, and more.

Should Your Company Hire Directly or Outsource IT Services?

Every company has a different approach and requirements, and you will have to determine the important factors you value the most when running your business successfully. However, for small- to medium-sized businesses, outsourcing will make more financial sense.

Aside from reducing the hidden cost of recruitment or turnovers, outsourcing IT services can also take advantage of controlling costly downtime linked to an employee whose expertise isn’t always needed. Outsourcing with Uniserve has many advantages, helping your business allocate the right resources in the best possible ways.