Written by: Daniel Haurey on 09/06/10

Perhaps you feel that the time has come.  You’ve been outsourcing your IT operations to a local IT company or Managed IT Services Provider.  But after looking at the annual cost for IT services, suddenly there are feelings of ambivalence.  And it’s at that very moment when many important facts are inadvertently ignored.  You just can’t help but think “for what we’ve paid to our IT company, we could’ve hired our own IT person!”

Many small businesses have faced this exact scenario.  Why have part-time or per-diem IT support when you could have someone at your disposal, full-time?  Think hard and consider these facts, which are based on our real world experiences.

1.Most small businesses owners and managers simply aren’t qualified to hire their own IT staff. 

Do you know exactly what skills to look for and how to separate a truly seasoned expert from a well-spoken imposter? Experts say that a bad hire can cost as much as 2-3 times the annual salary of the employee.  Here’s a handy calculator from ADP that you can use to estimate bad hire costs.

2.It’s way too risky. 

Typically, most small businesses lack formal documented systems and processes.  Undocumented IT systems are a disaster waiting to happen.  The most likely result of your new IT hire is that he/she will soon become the only person on the planet with the background to keep your organization’s IT systems functional.  This is not a good place to be.  What happens when this person gets sick or decides to move on?

3.It is highly unlikely to find a good IT professional that is going to last very long at your company.

Average tenures in the IT field are much lower than that of other professions.  This is because salaries are highly commensurate with experience and skill set.  Solid IT professionals will desire to continue on an upwardly mobile career trajectory.  Unfortunately, your small business IT environment will offer very little in the way of career growth, making for an uninterested staff member looking for the exit.  See No. 2 above – It’s too risky!

4.It’s probably more expensive than you think.

Back to hard dollars and cents.  When looking at hard costs, are you really performing an “apples to apples” comparison?  In addition to the payroll taxes, benefits, retirement savings match and paid time off, have you considered the other costs involved in adding new headcount?  For example, how will you keep your new IT professional trained and certified?  A one-week technical training class can cost as much as $3000. Don’t forget to allocate more cost for training time off.  Your new IT pro can’t be at work and training simultaneously.  Real estate space, laptop, cell phone and accessories are other items that should be included in your analysis.

5.It is highly unlikely that you will find the IT jack-of-all-trades. 

Your IT infrastructure is likely comprised of several areas, each requiring different skill sets to support, manage and maintain.  Your hiring budget is probably going to preclude you from hiring all of the skill sets needed to maintain your IT systems.  For example, you may find someone that is very good at managing and supporting your Microsoft Windows servers, but that same person shudders at the thought of working on routers or firewalls or has no experience whatsoever supporting the database or e-mail server platform that your company uses.  This means that you will likely still need to maintain and pay for outside IT consulting services, in addition to the salary and other aforementioned costs.