Information Technology spending is certainly a more complex affair than many other business purchases, with a host of options and pricing systems. Let’s break down your options, the headline figures, and the forgotten factors that go into the real costs.
In-House IT Staff
Full-time salaried staff may seem the simplest option when it comes to cost, though salaries vary greatly with experience and location. As a guideline figure, Glassdoor reports an average median salary of $78,201 for all IT staff roles nationally.
Hiring site Indeed breaks it down to show how costs vary with the job title (which usually indicates experience). The closest thing to a standard salary is $66,416 for an “IT technician” which is almost identical to “IT specialist” on $67,537 but again, these figures are a national average.
At the lower end of the scale, a “support worker” attracts an average salary of $49,406 while an intern averages $30,288. If your IT department is big enough to have its own hierarchy, you’re looking at $84,045 for a manager and $112,705 at director level.
Don’t overlook the additional costs beyond salary. Between federal and state payroll taxes and workers compensation premiums, you can usually add around 10 percent to those salaries, plus any benefits you need to include in a package to attract staff can add another 22%. You also need to consider the costs of covering staff absence for vacation or sickness.
Freelance and IT Support Companies
When using external services rather than in-house staff, one common option is what’s known as an on-demand or break/fix mode. Whatever you call it, the idea is that you only pay when you need a problem fixing, using an hourly or day rate for the actual work done. Prices vary significantly around the country, but as a rough rule of thumb an individual freelancer will often cost you around twice the equivalent hourly rate of a salaried employee.
It’s unlikely you’ll get an IT freelancer for less than $75 an hour, and $150 or more is not uncommon. If you contract a business that uses the ‘break/fix’ model, $100-150 is more likely. Remember that with most of these set-ups, you’ll have to pay any equipment repair and replacement costs on top of the hourly labor fee. Not to mention the fact that the freelancer may not be available in the future should the issue reoccur.
Managed Service Providers (MSPs)
A MSP is a company that effectively acts in place of an internal IT department. It can manage the IT services in your premises (remotely or with in-person visits), at your off-site servers, or both. You pay a fixed monthly fee that covers any work that needs doing.
A survey of 900 MSPs by Kaseya found that 34 percent charge a flat rate per covered device, 18 percent charge a flat rate per user, and 48 percent either base their charges on a combination of user and device numbers, or simply charge a flat fee.
As a guideline, the Kaseya survey found that 39 percent of MSPs charge the equivalent of $125 or less per device each month, with 20 percent charging between $126 and $150. Prices gradually increase among the remaining MSPs, with 12 percent charging more than $250.
To put that into context, $125 per device per month is roughly equivalent to having one in-house IT specialist (paid the average $67,537) a year for every 45 devices used in your business.
These figures don’t cover every factor however. For example, using an MSP can give you access to a wider range of expertise, experience and specialist knowledge about specific aspects of IT than your in-house staff can bring to the table. Many MSPs can also offer enhanced cybersecurity, auditing and other preventative measures that reduce the chances of downtime or damage from malware. Compared with the break/fix model, this can mean higher up-front costs that still represent far better value when you consider the potential loss of productivity while waiting for a problem to be fixed.
If you are interested in discussing the type of IT Services that you need, and their related costs, feel free to give us a call or schedule a consultation.